It’s not uncommon to want to shy away from discussing end of life planning. The thought of losing a loved one, or facing our own mortality, can be emotional. Sometimes this stress causes us to postpone these conversations until we are faced with a pressing situation that leaves us no choice but to make decisions we may not feel prepared for. A spouse may receive a terminal medical diagnosis, or a parent may suddenly have increasing end-of-life care needs that are best met in a nursing home. Without prior end of life planning that provides a clear structure for transition and support, loved ones may feel pulled in many directions while trying to sort through health care planning, and a multitude of financial and legal hurdles. We can do our part in helping to minimize the difficulties our loved ones may face by working with a professional who can guide us through the steps of end of life planning.
When it comes to end of life planning, indecision IS a decision.
Depending on your circumstances, you may feel that this isn’t something you need to prioritize at this point in your life. You might be tempted to stick with what you already know and put the whole thing off for some other day. The problem with that is that time doesn’t slow down for any of us, and if you delay this important end of life planning, you or your loved ones can be left with a much more difficult situation than if you had prepared.
End of life planning is something that each of us will need at some point, but what does that exactly mean? Is it just writing a will? Is it estate planning? Is there a difference between will and estate planning? Is it having advance directives in case you or your loved one need to go to the hospital in an emergency, and are unable to communicate your preferences for medical care? How do you know what end of life documents you need?
End of life planning is all of these things, and more. It allows us to make decisions about our health care and express how we would like to have our final wishes carried out. It gives us the opportunity to make sure our loved ones will be financially protected in our absence and that our assets will be distributed as efficiently as possible. And with the help of a professional, end of life planning can help prepare loved ones for new roles and responsibilities.
How can a financial advisor help with end of life planning?
A financial advisor is an ideal professional to turn to when you are ready to address end of life planning. You may think of a financial advisor as someone who is focused on managing your money and assets so that you can meet your goals, which is one component of their services, but there are so many more ways they can support you and your family throughout this process. End of life planning is deeply personal, and the only way to ensure that your specific needs are met is to work with an advisor who takes a holistic financial planning approach. They will work to understand all aspects of your family dynamics and learn about what is important to you.
- Do you have a spouse or child who needs additional financial education and ongoing support so that they can move forward with stability in your absence?
- If you were the one who always handled financial decisions, how can you find reassurance that everything you’ve worked so hard for will continue to be responsibly managed if you are no longer able?
- Have you experienced recent life changes that merit updates to your estate planning documents so that they accurately reflect your personal wishes?
- Are you facing health challenges that are going to require extended medical care and need an optimized financial plan for covering these costs?
- Do you own a family business that will need succession planning along with someone who can coordinate responsibilities and communication between heirs?
- How can you be sure that your assets will be protected and transferred according to your wishes?
No two people have the same exact circumstances, and the variables are as unique as each individual. But a financial advisor who is experienced in end of life planning and uses a holistic approach will learn about your life, your family, your work, your finances, and your goals so they can develop a customized plan and provide you with the guidance you need.
A financial advisor can help you with:
- Estate Planning. They can review any estate planning documents you may already have or help you to determine which legal and financial documents might be best for you. They may suggest including a last will and testament, a trust or trusts, a financial power of attorney, a healthcare proxy, a living will, beneficiary designations, a letter of intent, and asset titling. They can help you create an estate plan that minimizes estate taxes and optimizes asset distribution so that your beneficiaries can avoid a potentially lengthy and expensive probate court process. Your financial advisor can ensure that your estate plan accurately reflects your wishes and is designed to help achieve your goals.
- Retirement Planning. Financial advisors can create a strategic plan, incorporating your specific circumstances, income, assets, expenses, and tax bracket. They can assist you in optimizing your portfolio, your investments, and your distribution strategy. Your advisor can help you make the most of your resources so that you can live the retirement lifestyle you want while having enough money to last throughout your lifetime.
- Health Care Planning. Advisors can help financially plan for potential long-term care needs, taking into account the possible need to purchase long-term care insurance or setting aside funds for future healthcare costs.
- Health Insurance. Whether you are on Medicare or are enrolled in a group plan through your employer, health insurance can include many different costs and coverage levels. Out-of-pocket expenses can be significant, and your financial advisor can help you review your options so that you can determine the plan that best suits your health and financial needs.
- Life Insurance. Your financial advisor can review your policies and make recommendations about coverage levels to ensure that your beneficiaries are financially supported.
- Review Beneficiary Designations. Advisors can help you review and update your beneficiaries on retirement accounts, bank accounts, and insurance policies so that they accurately reflect your wishes.
- Charitable Giving. Financial advisors can assist with philanthropic planning. They can help you set up charitable donations, trusts, and foundations so that works which are important to you can carry on in your name.
- Education and Communication. One of the most important aspects of end of life planning is to provide your loved ones with the knowledge and resources they will need to survive and thrive in the days to come. If you have been the one to manage your family’s financial matters, your loved ones may need guidance as to how to assume this role in your absence. A financial advisor who is an expert in end of life planning can help prepare your family for this transition. From educating your spouse or children on how to best manage their assets, to facilitating communication between family members during business succession planning, your financial advisor can be a trusted ally in ensuring that your loved ones are given the tools and continued support they will need to succeed.
How do you select a financial advisor who can help with end of life planning?
End of life planning involves many different components which may require coordination with other professionals such as an insurance agent, accountant, and an estate planning attorney. You want to make sure that your family will be provided for, your wishes are respected, and that there is an effective plan in place to make that happen.
You want to work with a professional who can help with everything from creating a financial plan to cover costs of care at the end of life, such as nursing home care or hospice care, to ensuring that your end of life documents and estate plan are comprehensive. Most of all, you want to know that the person you are working with has your best interests placed above their own.
How do you know who you can trust? Are all financial advisors the same?
A financial advisor can be an excellent professional to turn to for help with your end of life planning, but it is important to remember that not all financial advisors are the same. You need to do some homework when selecting who you want to work with. It’s not your job to know all the things you should be doing to adequately prepare an end of life plan; it’s your advisor’s responsibility. You want to work with someone who has done this before and is an expert in this area.
Here are some things you should consider when selecting a financial advisor to help with your end-of-life planning:
- Is this financial advisor a fiduciary? The U.S. Securities and Exchange Commission (SEC) is clear on the definition of fiduciary duty. “An investment advisor must, at all times, serve the best interest of its client and not subordinate its client’s interest to its own.” In simple terms, financial advisors who are fiduciaries are legally obligated to do what is best for their client. Not all financial advisors are fiduciaries. Frisch Financial Group IS a fiduciary.
- Does this advisor have a demonstrated level of expertise in end of life planning? You cannot assume that every advisor is capable of providing you with the services you need. What is their experience specifically with end of life planning? Ask questions until you are comfortable or until you discover that this advisor is not the right fit.
- Do you feel confident and reassured when speaking with this financial advisor? End of life planning is emotional. It can be frustrating. Different people may have different reactions to the process – even within the same family. End of life planning cannot be viewed as one-size-fits all and you need a financial advisor who will respect your feelings and unique family dynamics.
- Do you feel “heard”? While you want a financial expert who can provide you with all of your options and guide you to what may help you the most, you don’t want someone to take over. You want an advisor who truly listens to you, is compassionate, and takes the time to understand what is important to you. You want a resource who can provide you with education, but you want more than just information. You want an advisor who will be your partner in helping you make the right decisions for you and your family.
When you choose to work with a financial advisor who is qualified to help you with end of life planning, you are gaining the expertise of a trusted partner, and you can be confident that you are doing everything you can to provide for your loved ones. Ideally, end-of-life planning options can be evaluated and discussed long before they are ever needed, but that simply may not be the way things work out. Sometimes, despite the best of intentions, we find ourselves in challenging circumstances without any idea where to begin. It can be comforting to know that, regardless of the stage of life you are in, there are financial professionals who can help. If you would like more information, please contact us.
