End-of-Life Planning: A Matter-of-Fact Guide to Preparing for the Inevitable - Part 01
A friend recently shared with me that a colleague of hers had suddenly passed away. “He was in his mid-fifties; he wasn’t sick. He had a wife and two kids. They weren’t prepared,” she explained with pain and fear in her eyes. It was easy to see that she was having a hard time processing the surreal feelings that come with losing someone, especially so unexpectedly.
As death often does, it prompted her to contemplate her own mortality and confront the fact that this could happen to her—to anyone—at any time. It also made her realize that neither she nor anybody close to her had done anything to prepare for the end of their life. “It’s like we all think we’re going to live forever!” she said incredulously as she blamed her Hispanic culture. But, from where I stand, this issue is not so easily contained by cultural boundaries.
The sobering reality.
According to a couple of studies and surveys published within the last few years
67% of Americans do not have a will[1],
Only 1/3 of adults in the U.S. have an advance directive[2], and
54% of Americans do not have any type of life insurance[3].
I mean, who wants to think about dying? I certainly don’t—and didn't—until two years ago when my dad, who had just turned 65, went from “not feeling well” to gone in literal months. Three months later, my grandfather passed away, and not long after that
Two people within my very small social circle died without warning, one of whom was middle-aged and (seemingly) healthy.
A shooter took the lives of 3 innocent people at the very time and place I had parked my car to take a walk with a friend, and
My sister was in a bad accident that, in addition to her many serious injuries, left her in critical condition and caused a stroke that almost took her life.
Every person except one was caught completely unprepared. Probably because they hadn’t expected anything would happen—especially to them—especially so soon.
What about you? If something were to suddenly happen to you, would your family be financially prepared to carry on without you?
If you’re like the majority of Americans, your answer is no.
I get it. You’re young. You’re healthy. You’re busy. “End-of-life” feels so far away. But the sobering fact is life is unpredictable. We have no idea what the future holds for us except, ironically, that someday it will be our time. Not one of us will avoid death. Yet somehow, after all these years, we, as a human race, act like it isn’t a reality we all face and isn’t something for which we should all prepare.
Will & Trust
The first thing someone typically thinks about when they hear “end-of-life planning” is a will. The second thing they think is: “Those are only for the wealthy. I don’t have enough money to need a will.” In truth, a will is for anyone who wants to make sure that what’s important to them is cared for after they’re gone.
Living Will and Testament
A will allows you to specify how your assets and liabilities should be distributed and/or managed when you die.
“Assets” and “liabilities” are just fancy words that mean the things you own (house, car, jewelry, furniture), owe (credit card balances, mortgages, loans), and/or are responsible for—including your children, adult dependents, and fur babies, too.
(Ir)Revocable Trust
An irrevocable or revocable trust (an optional add-on to a will) is a legal arrangement whereby one person (the trustee) holds and manages assets for the benefit of someone else (the beneficiary) by following the specific instructions laid out by the person who created the trust (the grantor).
This option is typically more expensive to set up but, for some, is worth it because
It’s not accessible to the public,
It gives you a higher degree of control and, most notably
It can help skip long and expensive probate procedures.
Having a documented plan that spells out your desires and intentions is important for anyone but is especially important for business owners like you, who have invested years—or even decades—building your business and want to make sure your legacy is protected, and your vision is carried on.
Proper estate planning can reduce the amount of taxes your beneficiaries will have to pay, keeping more of your wealth for your heirs. Plus, if you have financial obligations related to your business, such as loans, leases, or contracts, end-of-life planning helps prevent them from becoming a burden on your family or the business itself.
If you do not have a will in place when you pass, your estate will be distributed according to the laws in your state. This means your business’s (and possibly your child's) fate will be left up to a (hopefully) impartial—but also uninvested—judge. A judge who wouldn’t and couldn’t possibly know what was most important to you or the decisions you would have made yourself.
There’s no reason for this to be the case. There are too many affordable resources out there not to have executed a Last Will and Testament.
Put it into action.
The complexity of your estate and individual circumstances may influence the cost and type of services needed, so it’s wise to start by assessing your estate planning needs. Robert Steen, Ph.D., CFP at USAA, breaks down this pivotal (and often overlooked) first step into five easy-to-understand categories in the article “5 key pieces for an effective estate plan.”
When you’re ready, schedule a consultation with a local attorney who specializes in this area. They will work with you to establish your assets, select your beneficiaries, and help you identify any specific requests that should be included. The attorney will then draft the documents based on the information you’ve given them, confirm they accurately reflect your wishes, and schedule a signing appointment with a notary and witness to make it official.
If you’re concerned about cost, consider exploring legal aid organizations and pro bono programs offered by law firms or attorneys. For example, LawHelp.org is a national collaboration of nonprofit legal aid and pro bono organizations that provides free legal information, resources, and assistance to individuals who do not have easy access to legal services. Check out their Find Help by State page to see if they can be of assistance to you.
If your needs are straightforward, you could consider online legal assistance services like LegalZoom, Rocket Lawyer, or products like Quicken Willmaker & Trust, but be aware of their limitations. Legal professionals play a crucial role in crafting a sound and effective will and trust tailored to your unique circumstances and ensuring compliance with relevant laws. Generic, off-the-shelf templates geared toward the masses can only do so much.
If you’re not feeling the DIY vibes, schedule a free session with Whitespace Consulting. We can provide you with access to low-cost legal services that will help you get these vital documents in place in no time at all.
Up Next: Two More Crucial Steps for Comprehensive End-of-Life Planning
Now that we've explored the importance of a will and trust, it's time to turn our attention to two other crucial areas that are often overlooked. In Part 02, we’ll dive into how an advance care directive can give you peace of mind about your medical wishes, and why life insurance is essential for providing financial security to your family after you're gone. Click here to dive into these two crucial steps for comprehensive end-of-life planning: End-of-Life Planning: A Matter-of-Fact Guide to Preparing for the Inevitable - Part 02.
[1] Caring.com survey in 2021.
[2] 2019 study published in Health Affairs.
[3] 2020 study by LIMRA.
Whitespace Consulting and its authors are not responsible for any actions taken by readers based on the information provided. Readers are urged to exercise their discretion, judgment, and due diligence when making decisions related to end-of-life planning, legal matters, financial planning, healthcare, or any other topics discussed on this website.
