We are fragile and finite. We live then we die. Our fates are sealed. And yet we go to great lengths to avoid acknowledging and preparing for the inevitable. This avoidance can carry a tragic price—but we don’t pay it, our loved ones do.
What if you contract Alzheimer’s or go into a long-term coma: Who makes the medical decisions? Who handles your finances? And what if your loved ones disagree on the correct way to handle the situation? If you’ve never put your wishes in writing, then each of these questions is a breeding ground for strife between the people you care most about.
Or consider another example: Frank and Martha had a long and happy marriage, resulting in three children: Cate, Dan, and Evan. Near the end of their life, Martha told Cate that she would get the house while Frank told Dan and, years later, Evan that they would get the house. But neither Frank nor Martha had a will or trust expressing their wishes in writing.
What happens when Frank and Martha pass away? Conflict. Why? Because Cate, Dan, and Evan all rightfully believe that their parents intended for them to receive the family home. And, by extension, that the other siblings are wrongfully trying to take what their parents wanted them to have.
What about more complicated cases such as if Frank and Martha owned a business or lots of land? What if they had several family heirlooms that each sibling wanted? What if Frank or Martha had a child out of wedlock or they adopted a child?
As the examples demonstrate, failing to plan is actually planning to create conflict within your family just as they are struggling through the tragedy of your passing.
Fortunately, a little preparation goes a long way. So, what should you do? At a minimum, you’ll want two sets of documents: One set for issues that will arise while you are alive and a different set for what happens after you pass away.
While you are alive, the main topics are who will handle your finances, who can review your medical records, who can make medical decisions for you, and whether you want to be resuscitated if you become incapacitated.
To address financial decisions, you will want to create a financial power of attorney (also known as a durable power of attorney). This document should state who has authority to act on your behalf and list what powers they have. Common powers include the ability to invest your money; pay your taxes; receive your government benefits; use your assets to pay your everyday expenses; buy, sell, maintain, pay taxes on, and mortgage your real estate; and so on.
When you create this document, you will also need to decide whether it becomes “live” immediately or if it only goes into effect after you’ve become incapacitated. The benefit of the document being live immediately is that if you become incapacitated, your agent can take action on your behalf immediately. But the drawback is that they can abuse that power as soon as the document is signed. So, you need to choose your agent wisely.
If, on the other hand, the financial power of attorney springs into effect when you become incapacitated, the upside is that your agent has less chance to abuse their power. But the downside is delays. It can take a long time for the agent to document that you are incapacitated. For example, doctors are often reluctant to issue an opinion stating that their patient is incapacitated because of legal liability that might arise for the doctor.
Moving to medical decisions, you will want to create a medical power of attorney (also known as an advance directive or a healthcare power of attorney). This document should say who can review your medical records and appoint someone to make medical decisions for you when you cannot such as because you are under anesthesia, in a coma, or no longer of sound mind. The document will also lay out your health care preferences. For instance, do you want to receive life-prolonging treatments such CPR, drugs, dialysis, blood transfusions, surgery, or a respirator? Similarly, if you are near death or permanently comatose such that you can’t survive without intravenous feeding, do you want to keep receiving food and water through an IV, especially if you are suffering from great pain or have little prospect of waking up?
Putting these desires in writing is a blessing to your family. It prevents them from having to make hard decisions about what kind of treatment you should get and whether to resuscitate you if your chances of survival are bleak. And it averts disagreements between the family if they differ on how to handle these challenging end-of-life decisions.
That brings us to what you should do to make life better for your loved ones after you are no longer here, including how to keep your assets private, prevent or reduce probate, and protect your assets from both your and your beneficiaries’ creditors. To learn about that, stay tuned for the next column.
This column is for informational purposes only and is not intended to be taken as legal advice. For your specific case, consult a lawyer.
Jordan Sundell (Special to the Saipan Tribune)
Jordan Sundell is a lawyer primarily practicing business and real-estate law. He formerly worked for the CNMI Supreme Court and Bridge Capital and is now general counsel for several real-estate companies, including JZ Group. His columns—focused mainly on real estate and small business—are published every other Tuesday. Contact Sundell at email@example.com.