How to Prepare for Legal End-of-Life Wishes as LGBTQ+ Older Adults
As an LGBTQ+ financial advisor, the number one issue that comes up in my financial planning discussions is missing or incomplete legal documents and end-of-life care directives.
For older LGBTQ+ individuals, planning for end-of-life decisions can be even more stressful. The lives of some who identify as LGBTQAI+ can often find themselves in lonely moments where they may not get much support from family or friends—caregivers that aren’t necessarily legally recognized, such as a partner or chosen families.
For example, the time to have insurance is before you need it. If you don't have health insurance, and then you get into a terrible accident or become seriously ill, it's too late.
If a loved one should have life insurance because you're dependent on their income and they pass away, it's too late.
If you haven't created an estate plan or completed your legal and end-of-life documents and died, it might be too late for your loved ones.
Lately, my office has received many calls from people who finally felt sufficiently motivated to check their beneficiaries or inquire about important legal documents they should have such as a health care surrogate, living will, power of attorney, etc.
Everyone should ensure that their legal documents are in place and that their end-of-life wishes are followed through. If all of a sudden an accident comes about where you’re incapacitated or die without your legal wishes being up to date, then legally those decisions and ownership will fall to “next of kin” – which could be a legal spouse or blood relative. This could lead to the living partner or a chosen family being shut out from medical directives, burial decisions, inheritance, or their home.
Here is a checklist of legal documents and end-of-life planning to consider to ensure that your legal, financial, and medical decisions are followed through as you wish.
How does a beneficiary designation work?
A beneficiary designation names a person or an organization as a recipient of a life insurance policy, cash, property, investments, or other assets after the account holder’s death.
This can be advantageous to someone who’s LGTQIA+ and isn’t legally married but has a long-term partner or someone they consider chosen family rather than a blood relative. Here are a few things to address when signing a beneficiary designation:
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Name both primary and contingent beneficiaries in case the primary beneficiary predeceases you.
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Name beneficiaries to avoid probate and ensure your intended recipients get the money.
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Regularly update your beneficiary designations for life events.
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Read and understand the beneficiary designation forms.
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Coordinate beneficiary designations with your will and trust for a cohesive estate plan.
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Consider how naming individual beneficiaries for separate assets might lead to unequal distribution.
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Avoid naming your estate as the beneficiary to bypass probate and potential tax issues.
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Be aware of the tax consequences of beneficiary designations on certain assets.
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Consult a professional before naming a trust as a beneficiary, especially for retirement accounts.
What’s the difference between a living will and an advance directive?
An advance directive is a written letter defining an individual's future medical care wishes and preferences. The combination of a living will and power of attorney make up an advance directive. They are in place for whenever you become incapacitated under certain conditions such as being in a coma, having a stroke, suffering from dementia, having anesthesia, or being ill that has left you unable to communicate properly.
A living will is a a type of advance directive, written or verbal statement that legally expresses your medical care wishes; including procedures, treatment, and life-prolonging decisions if two medical professionals state that you have a terminal illness, end-stage condition, or are in a vegetative state.
Without a living will, some hospitals may not acknowledge hospital visitation rights for unmarried couples. According to the National Institute of Aging, some exclude unmarried partners and friends from making decisions like funeral directives, palliative care, do-not-resuscitate (DNR) orders, ventilation, or whether or not to use a feeding tube.
Coordinating with your medical and legal professional to discuss the recommended living will you wouldn’t think about is important.
There are no strict rules for the content of advance directives. They can be broad or specific, outlining your preferences for simple procedures or detailed steps. The distinction between will vary on which state you reside in. In some cases these terms can be interchangeable, to ensure you have the necessary documents.
Consult your state's laws regarding having advance directives or a living will.
What is the difference between a will and a trust?
Think of a trust as a way to manage assets for someone else's benefit. A person you choose, called a trustee, holds the assets and follows your instructions about how and when to give them to the beneficiaries. You can design a trust in many ways to fit your specific goals. There are benefits of having a trust like your wealth, and terms and conditions can be stated on how your wealth can be distributed.
An example is a revocable trust, meaning the usual next of kin or spouse is supposed to inherit your wealth and can be excluded from the trust. This is available in case of complex relationships between blood relatives or legal marriages that wouldn’t be approved.
To be enforceable, your will must be signed by you and two witnesses who cannot be your spouse or a blood relative. Additionally, it is recommended to have the will notarized.
What are the different types of power of attorney?
A power of attorney (POA) is a legal document authorizing one person, called the agent or attorney-in-fact, to act on behalf of another person. The POAs’ authority can be broad, allowing them to make decisions about the principal's property, finances, and medical care, or it can be limited to specific tasks. A crucial feature is that a durable power of attorney remains valid even if the principal becomes incapacitated. This ensures their wishes are carried out even if they can't make decisions for themselves. Consider these different types of POAs to carry out specific tasks on their behalf:
Health Care Proxy
A healthcare proxy allows an individual to have the power to make any decisions related to health on their behalf. This document can also be referred to as a healthcare POA (HCPOA). An HCPOA can give someone you trust the authority to make medical decisions for you if you are unable to communicate. The HCPOA loses the power of decisions when you can make decisions on their own.
Financial Power of Attorney
A financial power of attorney can be divided into four categories:
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A general power of attorney allows the agent to be authorized to make decisions relating to selling property, managing bank accounts, signing checks, handing assets, and filing taxes for the principal.
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A limited power of attorney that will act on behalf of the principal in specific events or circumstances. This type of POA can be authorized for a certain amount of time – up to two years.
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A durable power of attorney (DPOA) only addresses financial matters within a contract. In Florida, with durable power of attorney, an individual can fulfill a contract on your own behalf, but cannot act in personal ways like voting, revoking wills, making affidavits without the principal’s knowledge, or exercising to be appointed as a fiduciary or trustee.
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A springing power of attorney is a type of DPOA that only becomes active when a specific condition, like incapacitation, occurs. This document ensures your chosen agent can only make decisions on your behalf when you truly need them to.
After you’ve gotten your legal documents completed and your end-of-life wishes written, what’s the next step? Secure them in a safe place like a safe deposit box or on a password-protected personal computer, right?
That's the worst possible place for those documents because they may not be available to the right person when that person needs them.
There are e-storage systems where you can upload copies of important documents and input account information, write out your wishes, and name “deputies” to receive these documents at the right time to “leave a trail of bread crumbs” so that those who you have asked to help you have the information they need when they need it.
I share several online tools with our clients, including AdviceWorks, Everplans, and Docubank. If you prefer to keep a paper copy of your important information, you can download a complimentary copy of my Survivor’s Guide here.
For writing and sharing your end-of-life wishes, there is a wonderfully comprehensive resource called The Conversation Project, which is dedicated to helping individuals start conversations with family and friends about what is most important to them—and to ensure that they get the care they want. These guides are posted on our website and I am happy to share them with you.
One of the best gifts you can give yourself and your loved ones is to take some time to review your important documents and make a plan to complete and store them properly.
Do you need personalized advice and referrals? Team Treece is here to help. Schedule a time to chat here.
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Please note that this may vary from state to state and you should review this with your financial advisor or legal attorney before finalizing a decision.
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