Monetary Considerations

BY ROGER C. BONE, MD Reprinted with permission.

In Reflections: A Guide to End of Life Issues for You and Your Family, distributed by the National Kidney Cancer Association, this chapter is titled "An Early Frost." Dealing with a weakening body as you face your last days, months, or years is hard enough. You don't want to also deal with the additional burden of a less than optimal financial situation for you and your family. Fortunately, the ideas in this article will point you in the right direction to get the help you may need.

Be sure to also read about the Five Wishes health care directive that is accepted in 43 states and the District of Columbia. It will give you a good idea of how you can make it easier for your family to know your wishes concerning health decisions. If nothing else, it will give you a chance to reflect on what you really want.

A terminally ill person does not need convincing that a will is a good idea. However, writing or updating a will may be one of the first psychological crises faced by you and your family. A patient in the early stages of the disease naturally holds out some hope for recovery, particularly if he or she is able to function normally and is relatively pain free. The family, as well, will be optimistic. As a result, considering the idea of devising a will may cause you to become discouraged and deeply depressed. It is as though everyone has suddenly given up or accepted your prognosis before the illness has naturally defined itself. It is understandable to put off decisions that in and of themselves feel "accepting" or in "anticipation" of death.

Monetary decisions, in general, deeply affect the terminally ill. Finances connote a cold and calculating image, which is often devoid of any emotion and can devastatingly reduce a long and complex life to a single column of black numbers on white paper. Almost a hundred and fifty years ago in Victorian England, Charles Dickens symbolized the vacuousness of financial affairs in his description of an inheritance lawsuit in the opening pages of Bleak House. "Jarndyce vs. Jarndyce" had existed so long in the courts that all the original participants, including the attorneys, had long since passed away as the case proceeded through the system. In other words, finances often take on their own bleak life and have a numbing effect on the human spirit.

Financial questions can also create great stress if the terminally ill person is the primary provider for his or her family. First, how will your spouse and/or children survive? Even if you own a substantial insurance policy, what are the long-term financial implications for the family? How far into debt will the illness drive them before the patient dies?

Perhaps the terminally ill person is also the family money manager. This personal job will have to be transferred in a similar manner to your work position, as I described earlier. The process can be tedious and time-consuming and, no doubt, will lead to discussions about past practices and future procedures. Your spouse, parents, or children may be unpleasantly surprised by the family's pecuniary condition. The problems can range from total financial upheaval to not being able to find such items as past tax records, which can help determine the fiscal status of the family. Total communication with all parties involved in your estate is important. For example, what good is an insurance policy if other members of the family know nothing about it?

Deciding who will inherit your belongings is often at the heart of family disputes both prior to and long after your death. No family can be perfect or plan for every foreseeable crisis. You might think your estate is settled and your wishes recognized; however, one of your survivors may change his or her mind about what to keep from your past. For instance, it may be mutually decided that your daughter inherits the antique writing desk while your son will receive the beat-up car you drove to work. No problem-until your daughter concludes, suddenly, that she wants the car instead. You may be beyond caring, but this unplanned dispute over the car can be a major inconvenience for the living.

Careful financial and estate planning can solve problems and arrange limited resources for maximum benefits. It can mean the difference between a loving resolution for the person who is ill and a prolonged grieving process confused with financial bitterness for the family. It is crucial that one must start early, seek help when appropriate, and make certain everyone who has a stake in what happens is informed. Not telling your nephew Charlie that he is the Executor of your estate until the day before you die is not prudent management.

It is beyond the scope of this book to provide a complete guide to the financial implications of dying. Individual circumstances will dictate what type of decisions need to be made and your viable options. However, what follows is a general guideline that may serve as a checklist.

The Will

A will is a statement concerning what should be done with your possessions and financial assets after you die. It need not be complicated or even drawn up by an attorney. However, it is usually advisable to involve one. If you feel you cannot afford a lawyer, look up the number of your local legal aid society in the phone book and call them. Depending on your income and personal assets, you may be able to have a will prepared for free or at minimal cost. Individuals with multiple investments or a complex family structure, such as a spouse from a previous marriage or multiple children, will require professional legal assistance.

It is crucial you complete the will before you become critically ill. Putting it off may lead to questions later concerning your mental status at the time of its preparation. Objections could surface retrospectively as soon as you begin medical treatment, especially if it involves potent drugs such as pain medication or chemotherapy.

A side benefit, and not an insubstantial one, is that the terminally ill patient will discover his or her assets and/or possessions in the process of gathering information for the will itself. One may uncover forgotten resources, such as insurance policies and designated beneficiaries. Organizing and accumulating the family's financial affairs will hopefully improve the patient's self-confidence as he or she faces the cost of medical treatment.

Power of Attorney

One mistake families and patients make is waiting to authorize a power of attorney. Keep in mind this decision should be made while you are in complete control of your mental faculties. If the designation of power of attorney is stalled until it becomes absolutely necessary, the legality of the transfer of authority could, in fact, become questionable.

The duties of the person who has been given power of attorney range from writing checks, authorizing bill payments, and overseeing estate expenditures from your trust to serving as the contact person for nursing services and other medical organizations. He or she will assume total responsibility for the financial decision making after you have become impaired or incapacitated. Be open with friends and family members when considering your options. One can designate a spouse, a child, or a trusted friend to oversee these matters.

Terminally ill patients must contemplate, therefore, not only how they want their assets dispersed but also who will be the one to execute their financial goals. This person needs to be competent in addition to being able to work well with both you and your family. If you designate someone in whom you and your family have trust and confidence, you will also provide a great amount of relief for everyone involved.

Insurance

Everyone has insurance — even people who do not think they do. For example, spouses and children are entitled to survivor benefits from the government if the deceased paid Social Security taxes. Social Security payments may prove to be substantial over time, particularly for children. One should also consider alternative insurance sources. Veterans and current members of the armed forces, for example, are sometimes allowed compensation for funeral or burial costs. The Veterans Administration will also provide counseling, vocational rehabilitation, and a monthly stipend to veterans whose illness can be traced to their time in the military. As mentioned earlier, consulting your employment health policies may reveal accumulated benefits from a previous job.

Obviously, a terminally ill person is not a good insurance risk. You will most likely find it difficult to increase the monetary value of your policy. However, your insurance agent or representative should be able to advise you on your alternatives and expedite the necessary paperwork. An often overlooked aspect is what to do with the money when it arrives after your death. This is an appropriate concern for a terminally ill person who is worried about a spouse's standard of living or a child's college education. Enlisting the aid of a financial advisor and drawing up a plan to deal with not only the insurance money, but also savings and other liquid money assets is a wise move.

As your health insurance policy is considered an asset, you should investigate its terms and level of coverage. What rules and requirements does it dictate in regard to hospital stays, special or experimental treatments, diagnostic measures, and long term and/or at-home based care? Policies may make provisions for nursing services or other alternative health care services. Full knowledge of the restrictions of your health insurance coverage will allow you to avoid unpaid medical bills and disappointment. You may also discover something you did not know before, such as the availability of certain assistance programs like Medicare and Medicaid.

Donations and Memorials

A person need not be rich to establish some type of remembrance in his or her name. A financial legacy is a way of telling an institution or an organization it had special meaning for you. The two most common beneficiaries are religious organizations and educational institutions. If you are unable to afford a monetary contribution, it may be possible to plant a tree on your favorite golf course or install a bench in a local park. In fact, anything is possible as long as people are informed ahead of time concerning your wishes.

Organizations, believe it or not, are sometimes wary of gifts, especially those that appear unannounced. Questions are always asked up front. Is the gift free and clear or are there unresolved state and tax implications? Does the gift have unreasonable or unacceptable conditions attached: one's oil portrait displayed at the church entryway or a scholarship limited to distributions to persons born during the first week of August? And, finally, will the gift cover the cost of what the person wants to do?

Again, a common theme throughout this chapter applies here: plan ahead. Set up a meeting early on with the organization or, at least, make a phone call. Most will have guidelines they will happily share with you. Also, inquire about their policy for memorial fund contributions from friends and family. If you adhere to their procedures, they will be more likely to follow your wishes.

Taxes

The old saying is there are two certainties in life — death and taxes. It may come as a surprise that someone is required to file an income tax return in your name on April 15th of the following year after your death. This return includes all applicable taxes. Forms can be dealt with routinely if there is a person designated to handle this responsibility. In addition, there may be tax implications involved in your will. You should discuss any questions with an income tax accountant or consultant.

Work Benefits

Individuals who learn they are terminally ill while they are still employed may face complex financial issues. There is the possibility you will be terminated, demoted, or reassigned to a different department. A confidential meeting with your human resources representative or personnel office may help to diffuse the situation. It is important to know whether your organization or firm provides the pertinent insurance, spousal benefits, and payment of accrued sick leave and/or vacation time. The American with Disabilities Act, passed by Congress in 1992, may protect your interests in this matter.

Responsible Dying

Finding out you are terminally ill is, without a doubt, something serious and intimate. At this point, you may be inclined to avoid or ignore impending financial issues; however, you must balance the seriousness of the illness with its implications. In turn, your friends and family may react in a similar manner. The biggest danger the terminally ill person faces is to be silent, to do nothing. You must find the courage to break the silence. Openly discuss practical matters, funeral arrangements, and personal concerns with your family. Helping them face these difficult issues now will help them handle the grieving process better after you are gone.

One caveat occurs to me here. A person must, despite responsible preparation for death, accept the condition that he or she cannot arrange everything. In addition, the patient needs to recognize that family members will be presented with unexpected complications and intense sadness no matter how much planning is done in advance. Their lives will naturally change as they grow older and, in turn, so will their needs. Allowing for their independence is a necessary part of responsible dying.

Friends and family will take their cues from the person who is ill. Their loss will be handled in a more positive manner if you do not assume they inherently know your wishes. Since everyone tends to have unique personalities, loved ones may interpret your thoughts and actions differently. In addition, they will be required to continue their own personal and business lives while they try to comfort you. They will be facing a world of financial realities at a time when they are also experiencing emotional vulnerability. If the person who is dying reaches out to them and states his or her intentions, the confusion will be minimal and the distress manageable. In this way, the ill and dying extend a loving gift to those who will survive them.

Putting one's personal and financial affairs in order leads to increased peace of mind for the person who is dying. The worries about how the family will survive and how they will manage through the illness itself, can hopefully be resolved. It restores one's sense of control over significant matters and will benefit family members for a long time.

The Checklist

In summary, I have listed below a series of recommendations, or a checklist, for organizing one's financial affairs. These suggestions are in no way meant to be all-inclusive. Nor do they pertain only to the terminally ill. It is prudent for anyone to make arrangements for the care of his family after death.

The Will. Consult with an attorney. Discuss information in the will with involved members of the family.

Power of Attorney. Prepare in advance for the transfer of financial decision- making authority to someone who is qualified to act on your behalf in case you become incapable of handling those matters yourself. Again, it would be wise to speak with an attorney.

Insurance. Investigate available benefit packages and study your options. Make an appointment to talk with your insurance agent or representative. Also, fully consider the terms of your policy and explore other possible sources of health insurance coverage. You may be eligible for Medicare, Medicaid, and/or Veterans Administration services for the sick and disabled.

Donations and Memorials. If you want to establish a memorial or donate money to a particular organization or religious group, discuss your wishes with the persons in charge and closely follow their guidelines.

Taxes. Be advised that there will be tax schedules and payments due after you are deceased. You may wish to consult a tax accountant or consultant.

Work Benefits. Examine work-related benefits.

©1997, National Kidney Cancer Association. Reprinted with permission.