There are some topics that probably come easily when talking with clients, like diversification strategies, catch-up contributions or simply catching up on life.
And then there are those less pleasant conversations.
End-of-life planning involves more than just drafting a will to designate beneficiaries and how a client’s assets will be distributed upon death. A strategic approach to estate planning also addresses how to handle assets and end-of-life decisions in the event a living client becomes incapacitated.
Starting with the basic facts can be an important part of legacy planning with your client.
Living Will Talking Points for Advisors
People generally have strong feelings about how to handle end-of-life decisions and the type of care they will receive. Yet they often go unsaid and, more importantly, undocumented. If a person becomes incapacitated and is unable to express those feelings and wishes, it may create a lot of heartache and uncertainty among loved ones and the medical personnel providing treatment.
The Difference Between a Will vs. Living Will
Will = documents what is done with assets after someone dies
Living Will = documents client’s wishes while they’re still alive, but incapacitated and unable to make decisions
By having a living will, a client can clearly define and document which medical treatments should and should not be administered to keep them alive. When speaking with a client about the topic of living wills, it may help to ask questions that outline some of the following scenarios.
- CPR — In the event, their heart stops beating, would they want to be resuscitated?
- Ventilator — Should one be used if the individual couldn’t breathe on their own? If so, when and for how long?
- Feeding tube — Have they determined whether they would want to be fed intravenously or via a stomach tube, and for how long?
- Dialysis — If their kidneys will no longer function on their own, when and for how long should dialysis be performed?
- Palliative care — Which interventions should be used to manage pain and keep a patient comfortable?
- Organ donations — Should a patient’s body, organs or tissue be donated to science or other individuals in need?
Helping a client identify their core values surrounding end-of-life decisions may be influenced by their values surrounding finances. Your client should provide a copy of their living will to their primary physician. It’s also important for clients to provide a copy to loved ones so they can be fully aware of one's wishes.
Durable Power of Attorney for Finances Talking Points
A durable power of attorney (POA) is a legal document separate from a living will that grants someone your client trusts with the legal authority to make decisions on behalf of the client when they’re unable to. While these distinctions may be common knowledge among financial professionals, your clients may not realize the differences.
Two Types of Durable Power of Attorney
Health Care = A document that names a health care proxy or agent to make medical decisions for someone who is unable to do so
Finance = A document that names someone to make financial decisions when someone is unable to make them on their own
As the name suggests, a durable power of attorney for finances allows an agent to make important financial decisions for another person who is incapacitated, such as paying bills, preparing and filing taxes, and managing investments.
Assigning a durable power of attorney to handle finances in addition to a living will adds an important layer of protection for a client, and can also help alleviate potential conflict. This step is especially important if an individual doesn’t have a spouse who is familiar with the person’s finances. Emotions can run high and there may inevitably be conflicting opinions if multiple children, a partner or close friends are left to collectively determine next steps.
You may also want to encourage your client to introduce you to the person they designate as their durable power of attorney. In the unfortunate circumstance that the durable POA needs to contact you to discuss your client’s financial decisions, they’ll have already had the introduction and feel more at ease making the call.
There are other aspects to legacy planning that can be included as part of your conversation. Access our Elevate Advanced Planning Resources to help your clients navigate these and other types of complex situations. Simply click the link below.
Written by: Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™
Marshall is CUNA Mutual Group's Advanced Planning Expert and has more than 25 years experience in the insurance and financial services industry. He consults Financial Advisors on advanced retirement planning concepts for retirement and wealth management clients.