Understanding Estate Planning and Advance Directives

By Julie Hayes, Tiffany TaylorJune 6, 2019

As we age, we may grow concerned about the possibility of no longer being able to make decisions for ourselves, and how we will provide for our family financially after we pass away. If we are caring for an aging loved one, encouraging them to begin preparing for the future through estate planning can provide us all with the peace of mind of knowing that their health care and financial wishes will be respected, and their loved ones will be taken care of. Estate planning can help a loved one:

  • Control their property while they are still alive
  • Express the type of care they would like to receive, and who can make further health care and financial decisions for them if they become unable to make their wishes known
  • Provide for their loved ones after their death
  • Lessen the stress of decision-making on their caregivers

Our loved ones should consider preparing the following advance directives while they have the capacity to express their wishes:

1.Living Will

A living will can give a loved one a say in their health care if they become unable to make their wishes known. This document is limited to end-of-life care concerns, such as whether or not our loved one wishes to receive CPR, have their life sustained through mechanical ventilation or receive certain treatments such as dialysis. Before the living will is created, a loved one should discuss these medical decisions with their doctor to assure they fully understand their options. A living will goes into effect if a loved one’s primary physician states they are no longer able to make health care decisions on their own.

2.Durable Power of Attorney for Health Care

A Durable Power of Attorney for Health Care allows a loved one to appoint a person they want to make medical decisions for them if their physician determines they cannot make these decisions themselves. The power conveyed by this document covers all health care decisions, other than what has been outlined in their living will, so an individual should make sure the person they name is comfortable with making these decisions.

The individual our loved one chooses to receive power of attorney will be able to:

  • Enforce their health care wishes in court
  • Hire and fire doctors and medical workers seeing to their treatment
  • Have access to their medical records
  • Have visitation rights

3.Durable Power of Attorney for Finances

Durable Power of Attorney for Finances similarly allows a loved one to name the person they want to make financial decisions if their physician determines they are no longer able to make these decisions on their own. These decisions may include:

  • Payment of a loved one’s bills
  • Payment of their medical expenses
  • Investments made on their behalf
  • Collection of their retirement benefits
  • Application for insurance benefits such as Medicare and Medicaid on their behalf

4.Living Trust

A living trust allows a loved one to provide detailed instructions about the handling of their estate, and to appoint a trustee who will hold the title to their property and transfer assets to their beneficiaries following their death without the intervention of probate court, the legal process of dividing assets after death. Benefits of having a living trust include:

  • Avoidance of the expense and delay of going through probate court
  • Faster distribution of assets to beneficiaries
  • Greater privacy, as unlike other wills, a living trust is not made public upon our loved one’s death 
  • Reduction or elimination of estate taxes

5.Do Not Resuscitate Form (DNR)

A DNR order instructs a loved one’s health care professionals not to perform CPR through chest compressions, a defibrillator, artificial breathing tubes or special drugs if their heart stops or they stop breathing. We should talk to our loved one about whether or not they wish to be resuscitated in the event of an emergency, and be sure that they inform other family members or friends of their decision so that medical staff can be properly notified of our loved one’s wishes when responding to a health emergency.

6.Last Will and Testament

A Last Will and Testament indicates how a loved one’s assets and property will be distributed upon their death. It includes detailed instructions that can account for various arrangements, including:

  • Care and guardianship of minors
  • Division of assets such as bank accounts and heirlooms
  • Formation of trusts to manage the estate
  • Funeral and burial arrangements

We should keep in mind that after our loved one passes away, unlike with a living trust, their Last Will and Testament will be filed through probate court as a public record, and a judge will be involved in distributing assets and property to beneficiaries.

A loved one should review their advance directives every three to five years. They should also consider making changes to these documents if they get divorced, married or have a child.

If you are unsure of how best to go about creating and notarizing these advance directives, there are resources available that can help. The National Academy of Elder Law Attorneys can help you find a lawyer to meet your loved one’s needs, and the U.S. Administration on Aging’s Eldercare Locator can also identify legal services for older adults in your area. Some employee assistance programs (EAP) also provide documentation for advance directives and referrals to legal services. If you are working for a company with an EAP provider, check with your provider to learn if you have access to these benefits.