End of life planning: Considerations as you and your loved ones age

by Badgley Phelps | Jul 06, 2017

As financial planners, we know it’s important to engage in end of life planning for yourself and your aging parents as early as possible. But as sons and daughters, fathers and mothers, we know it’s not always an easy topic to bring up. That said, an awkward conversation now is better than the stress of trying to decode a family member’s wishes while grieving over a loss. Following is a walkthrough of how to approach end of life planning – and what topics you should discuss now to help ease the burden later.

Hold a family meeting

Instead of relying on one-off discussions between smaller groups, or worse, avoiding the conversation altogether, consider planning a family meeting that involves all family members at the same time. Questions raised by one family member could be shared by others, or prompt a discussion that might have otherwise been left unsaid.

Here are some topics to start with:

  • Share and discuss family values and goals of individual family members
  • Raise the issue of providing home health assistance, should it be necessary, and determine how it’ll be handled
  • Discuss how parents will maintain social relationships and activities
  • Talk about expenses to cover end of life arrangements

Be sure to allocate enough time to allow the eldest members to share what’s important to them and their goals and wishes so that everyone in the room has a clear understanding.

Name a personal representative

The personal representative is the person responsible for managing the administration of a deceased individual’s estate, also known as the estate executor or administrator. The duties of the personal representative include:

  • Identifying and protecting estate assets
  • Determining date-of-death valuations
  • Managing creditor’s claims of the estate
  • Filing all appropriate pleadings with probate court
  • Filing all the appropriate tax returns
  • Distributing the estate assets

It’s a good idea to discuss with your personal representative the designation of other financial surrogates, who can assist an aging client with financial matters. These could include: a Social Security representative payee, a long-term care insurance alternate payee, an agent for funeral decisions, the person who will receive Durable Power of Attorney and Healthcare Power of Attorney, and the person who has access to bank accounts. In some cases, the personal representative may also fulfill some or many of these roles.

Address administrative tasks

When considering end of life planning, organizing administrative tasks is of utmost importance. Here are several areas of focus:

Review the financial inventory

Walk through the family member’s financial inventory and make sure you know passwords to all accounts. It can be difficult and time consuming to gain access later.

Consider tax and portfolio implications

It’s important to know what will happen with taxes and portfolios after death. An income tax return will need to be filed on behalf of the deceased. Estate taxes will need to be filed on behalf of the deceased’s estate. And investment portfolios can be transferred easily to a beneficiary – as long as one is designated.

Create, review or update critical documents

Make sure the following documents are in place and up-to-date:

  • Durable Power of Attorney: person assigned to make financial decisions on your behalf in the event of your incapacity.
  • Healthcare Power of Attorney: this person is empowered to make healthcare decisions on your behalf should you become incapacitated.
  • Will/Trust: helps to ensure that property is passed according to an individual's wishes. Wills should bequeath property in the same way that other documents do, such as your retirement account or insurance policy. The will should also include guardianship designations for your minor children.
  • Beneficiary designations: identifies who will receive your assets. Some assets, like retirement accounts, can pass along after death without being included in a will.
  • Letter of Intent: outlines your wishes for your assets.
Near-death planning

When someone is close to death, there are a few measures that are important to ensure the smooth transition of assets. Your financial adviser should:

  • Scrutinize the investment portfolio for assets that have declined in value and determine if the capital loss should be realized
  • Consider whether it makes sense to gift depreciated stock to a child or spouse before death – this is most effective if a parent is not required to file Form 706 (estate tax return)
  • Review titling of investment accounts
Living wills

People are living longer. Because of this, approximately 25 percent of all U.S. deaths occur in the long-term care setting, and this figure is projected to rise to 40 percent by the year 2040 (http://www.transitionalcare.info/).

Planning ahead and creating a living will reduces the confusion or disagreement about the choices you would want people to make on your behalf. For your personal representative or other designated financial surrogates, a living will helps them understand your thoughts in order to facilitate conversations with others about medical and end-of-life care, and financial transitions.

When creating a living will:

  • Consider your values
  • Discuss your wishes with your primary physician, family and friends
  • Make end of life care decisions
Additional Items to Consider
  • Keep a list of financial accounts including account numbers and contact information
  • Annually update a list of contact information for professional service providers including your doctors, tax-preparer, estate attorney, and wealth manager
  • Make sure your family members know the location of your estate documents, insurance policies, etc.
  • Document a list of your social media sites and email addresses with access information

As author Haruki Murakami wrote, “Death is not the opposite of life, but a part of it.” While end of life planning is not an easy topic to think about now, careful planning by you and your loved ones will help ease the burden of loss when the time comes. 


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