Following on from Monday’s article on financial planning in the wake of a terminal diagnosis, here we take a closer look at some estate planning issues that may arise once a person becomes incapacitated as a result of the illness or disease. At a time when you are incapacitated and/or unable to speak for yourself, or in the event of your passing, there are a number of estate planning tools available to make it easier for your loved ones.
These include:
Power of Attorney
A power of attorney is a formal document by which a person (the principal) authorises another (the agent) to transact legally on their behalf. If you are suffering from a life-limiting condition which may result in you becoming physically disabled, granting a spouse or friend a power of attorney over your affairs is definitely something worth considering. With a valid power of attorney in place, your appointed agent will be able to transact on your behalf which can be of great assistance as your illness progresses. However, it is important to note that a general power of attorney is only valid if the principal has full mental capacity. This means that if you become mentally incapacitated in any way, the power of attorney will fall away, and your agent will lose his capacity to act. This is important to bear in mind when it comes to illnesses such as dementia and Alzheimer’s disease.
Living Will
A Living Will is a directive to your family and medical practitioners while you are still alive but unable to communicate. It is therefore recommended to have both a Will and a Living Will in place. The purpose of a Living Will is to guide your family and doctors if you are in a medical condition from which recovery is unlikely. It expresses your refusal of artificial life support when you cannot communicate your wishes during the dying process. Additionally, an Advance Directive, which may form part of your Living Will, acts as a medical power of attorney, allowing you to appoint someone to make medical decisions on your behalf if you are incapacitated. Your Living Will and Advance Directive can include specific instructions about medical interventions you do not wish to undergo, requests to withhold certain treatments, pain management preferences, and your wishes regarding organ donation, resuscitation, and feeding. Essentially, it serves as a guide for your loved ones and physicians on how you wish to be cared for and treated at the end of your life.
Last Will & Testament
Rather than resorting to a DIY Will, it makes sense to seek advice from an adviser with estate planning expertise to ensure that your Will is both valid and actionable. Many testators have their last wishes and intentions frustrated by poorly drafted Wills and an inadequate understanding of the principles of estate planning. Your adviser should be able to help you structure a Will that ensures your assets are distributed to your heirs and beneficiaries in direct accordance with your wishes, while at the same time taking into account both common law and statutory law, as well as the implications of your will in respect of your assets, liabilities and cash flow in your estate.
Letter of Wishes
A Letter of Wishes complements your Will and should be seen as a guide rather than a set of binding instructions. This document provides additional information on personal matters to be considered after your death, such as your preferences for your children’s education or religious upbringing. While not legally binding on your executors or trustees, it can help ensure your personal wishes are respected. For example, it might clarify details about specific bequests in your Will, explain reasons for excluding certain individuals, or list people to notify upon your death. It is important to ensure that your Letter of Wishes does not contradict your Will.
Digital Will
Considering the extent of one’s online presence, it is prudent to create a Digital Will to manage your digital affairs after your death. This includes online bank accounts, email, social media profiles (Facebook, Twitter, Instagram), saved documents, photos, subscriptions, loyalty programs, chat rooms, blogs, and communications. While not a legally binding document, a Digital Will allows you to specify how these digital assets should be handled and closed. Although your estate’s Executor is responsible for managing your estate, you might also appoint a separate ‘online executor’ to oversee your digital assets. Provide this person with a list of all online accounts, login details, and passwords to ensure they can effectively carry out your wishes. As Haruki Murakami insightfully noted, ‘Death is not the opposite of life, but a part of it.’ Similarly, end-of-life planning is an integral aspect of financial planning and may need timely attention.
Have a super day.
Sue
