Video: Starting the Conversation on End-of-Life Planning

by Justin Sanderson, MBA, CFP®, CIMA® Sep 11, 2019 Estate & Generational Wealth Planning, Financial Planning

At a recent WealthVantage event, Justin Sanderson and Tim Domino presented on a topic that is critical yet often overlooked by many families - developing an end of life plan. Whether it’s for yourself or an aging loved one, it’s never too early to think about and discuss estate planning, handling non-financial assets, personal wishes, and more. You can watch a video of the presentation or read the transcript below.

When you’re ready to initiate this important conversation with your family, we invite you to download our End-of-Life Planning Guide.


Justin Sanderson: The best time to plant a tree was 20 years ago. The second best time to plant a tree is today. That's an ancient Chinese proverb for that's especially meaningful today as Tim and I are going to take a few minutes to talk about end-of-life planning.

Tim Domino: Realizing that death is going to happen to all of us eventually, you would think that it's a discussion point that gets talked about often among family and friends. However, I think we're realizing more and more that people are not having these conversations about end of life care and the eventuality of death. Justin, do you find many of our clients talking about end of life care or having these discussions?

Justin: It's interesting, you know we spend a lot of time talking about the financial considerations of end-of-life planning, but we often find when the end of life really becomes a reality for our clients that a lot of the non-financial considerations weren't discussed and people think it's important, you look at the data and if people are asked, you know, should you talk to your family about how you want to be cared for at your end of life? They believe they should, but largely they're not having it and they certainly aren't documenting it in a formal way. For people that haven't started any of the estate planning process, where do you think they should start? What's the first thing that they should begin thinking about and what are some of the goals they should be getting out of that process?

Tim: Well, certainly addressing the base financial considerations, the disposition of your things and your financial assets is an important consideration that everybody should go through. So that's thinking through, you know, who should end up with certain assets in your possessions, where should your 401k go? And to what extent you want money go into spouses or children at your first death and in what wrapper they should be in. So is it a trust? Is it outright or some combination of both things?

Justin: So as people are endeavoring down this estate planning process for the first time, where do you see them commonly get hung up? What sort of issues do you think are common issues that families have some disagreements about or need some additional discussion and clarity that may have been clear to them ahead of time?

Tim: Sure. I think for younger families going through the estate planning process, the biggest hangup we see is on guardians of minors. So there's often disagreements between both spouses on you know, which sister or sibling or brother is best equipped to take care of your child should both of you be deceased. So that's really a huge hang-up that unnecessarily kind of complicates the process for a lot of families. If you stop and think about it, having at least some decision made is better than leaving up a decision to the state or somebody who doesn't necessarily know your children the way that you do. For older folks going through the estate planning process, especially wealthier clients who have a lot more assets to distribute and things to contemplate, we see a lot of them get hung up on the use of trusts in the estate planning process.

Tim: So when you think about it, there's a lot of money out there and trusts have traditionally been used or viewed as these very stodgy kind of inflexible vehicles. But over the last decade or longer, trusts have really evolved to the point where they can satisfy a lot of asset protection needs, divorce protection needs and spendthrift sort of protection needs as well that really make them good vehicles to finish up an estate planning project for our clients. We've actually developed a pretty long content piece that goes through the different types of trust distributions that you can contemplate when you're developing your estate plan. So kind of the spectrum from very, very inflexible to ultra flexible and just centered around a very few asset protection sort of concerns. So you can download that at our website. I think it's a great resource for our clients.

Tim: So a lot of what I'm covering or I spoke about with the trust distributions and beneficiary designations, things like that, covers our financial assets. But you have some thoughts on non-traditional and non-financial assets as well, right?

Justin: Absolutely. There's a lot of different types of assets and families. You talk about heirlooms, collectibles, automobiles, prized real estate, all of this stuff that certainly has financial value but also might have a deeper connection to a family and oftentimes these are the real areas that are uncomfortable to talk about when the end of life is near. And what we find is that we should really be talking about these things early and ahead of time so that everybody's on board because perhaps the matriarch and patriarch value their lifetime prized waterfront residence differently than their children do.

Justin: You've got an example of that that happened relatively recently with us where a patriarch left their prized waterfront real estate to all of their children equally. However, the children have very different facts and circumstances and it led to some uncomfortable conversations and also, you know, kind of drove the family apart for a little bit of time. It eventually smoothed over, but certainly during that time they should have been comforting each other during this transition of their parents instead of getting tied up into, well, "Who's going to pay for this part of the real estate?" And that sort of thing, which we see happen all too often and we can avoid it with a conversation ahead of time.

Tim: Absolutely. I think that's an important consideration. Those are important conversations to have ahead of time. I think we should shift gears for a second and talk about our digital assets. We're increasingly living in a digital world and we have text messages, phone messages, pictures, music, all these things that are on our phones, laptop, computers and other places. How are people treating those assets or thinking about those things in their estate plan?

Justin: That's interesting. Right now a lot of people just aren't thinking about it at all. It's difficult to value those digital assets. Right now they're basically treated as boilerplate language in a will. When we see the document it says something along the lines of, "All of my different digital assets, whether they're things that I've created, things I've purchased, things I've earned, my social media profiles, my emails, all of these communications that certainly are going to continue to exist after you pass away, we'll treat them all the same, right? Just all these different things, treat them all the same and give them to my spouse. If my spouse doesn't survive me, then my executor should do something with them. Either sell them, destroy them, or some combination thereof."

Justin: And I know for myself personally, I would prefer there to be some other more orderly disposition, especially as we create so much more digital assets now than we have been in the past, that we're all going to die with quite a bit of a digital footprint that should be carried through thoughtfully. And I think that's a big topic that we're going to go into more detail on other day.

Tim: Yeah. I think having things, you know, cleaned up and organized and accessible by loved ones is very important to the extent you want to do so. You can think of scenarios where a loved one's passed and their Facebook profile remains active for longer than you would hope. And unfortunately every time you go on there, you're kind of reminded of things when you might be attempting to move on in life and grieve in a different way. So certainly a very important consideration and topic to cover. So Justin, you mentioned a lot of things in that boilerplate language in the will that comprise of digital assets, but what do you think relates to most people? What are their digital assets?

Justin: Sure. Well I think a lot of people don't realize how big their digital footprint is. That includes everything from your Apple profile where your videos are stored, your photos are stored, your text messages are stored, and any of the other items and media you've purchased over time. Things like your Google profile too. I'm sure most people have both. And your Google profile has all of your drive assets and anything else. If you've ever had an Android phone, there's a lot of storage out there, but it goes beyond that too. I mean you think about things where you have pure digital accounts, like your credit card rewards points. While there can be a lot of value to credit card rewards and there's different policies for each carrier. But that's certainly another digital asset or your Southwest rewards. If you've booked up a bunch of free flights, well somebody should be able to enjoy those.

Tim: Absolutely. So we should also shift gears and talk about something near and dear to my heart, pets and I know it's near to dear to your heart as well. Right?

Justin: Absolutely.

Tim: Pets often get lost in the shuffle or can get lost in the shuffle during the end of life chaos. Do you see clients planning for care of the pets after?

Justin: It's interesting. You know, we've seen it cause issues. We've seen some places where we see an inordinate amount of care left for these pets, which, you know, that's great, they're an animal lover and that sort of thing. But oftentimes people just haven't addressed it. And you know, it can be a cause of frustration and confusion when this pet needs immediate care. If a life event happens, whether that's incapacity or death, this pet needs to be treated... This pet needs to be cared for immediately. And I think it's a great idea to talk about that ahead of time. Say, "Okay, who has the capacity and the time to deal with this? And really the willingness to care for this pet? And also are there special circumstances where additional resources may be needed for that person to provide the level of care for the pet that they'd like?"

Tim: Yeah. We've even seen clients, you know, set aside resources in their wills and trusts and things like that to have their pets cared for into perpetuity or at least until they pass themselves. So certainly an interesting area of planning that we're seeing more and more people address. A lot of times in the estate planning process people are trying to convey through trusts and other estate planning vehicles, how they want their legacy and their values to be passed down to other generations. And really, although a trust and a will is a good place to try to memorialize some of those things, it really doesn't have the personal feeling that other methods do. And I think we're seeing a lot of different changes or different approaches to cementing, memorializing our legacies. Can you talk about some of those?

Justin: Sure. One of the primary concerns people come in with is, you know, there's a very black and white answer to what to do with the financial assets, right? But a primary concern is, "Hey, how do I make sure that whatever we're leaving on behind doesn't ruin the kids and that they trust and follow the family values and traditions we had before?" We've seen it carried out directly in a will before, in the purpose statement. We're not really proponents of that however, there are a lot of effective ways, you know, traditionally patriarchs and matriarchs have written down letters to their future generations that say, "Hey, this is the hard work that went into creating this level of wealth. And we'd like you to remember that."

Justin: Over time, for the past few decades, we've been able to capture that in video. And I think we're seeing that an increasing amount of times, especially now with the high definition camera in a lot of people's phones, it's pretty easy to create the memories of these loved ones, some very forward-leaning people and that want to preserve that presence through generations have gone as far as creating holograms and having those accessible in the rooms. I'm not sure how I feel about that. I don't want to haunt my children after I'm gone but I think it's an interesting thing. Perhaps though the most effective way we've seen this really passed on through generations are the families that have committed their own resources, both time and money to hiring a professional historian to go through and interview the family, do some research on previous generations, and really compile a formal family history that can then be added onto in the future. And that's a great way, especially when we're talking about multi-generational wealth, where we really want to pass these family values down through generations.

Tim: Yeah. I think a lot of those successful entrepreneurs and business owners really want to make sure the lessons that they've learned throughout their lifetimes and the different things that's driven them in their success is kind of passed down and remembered by their grandchildren even beyond that. So those are great ways to make sure that that happens.

Justin: So we spent a lot of time today talking about financial assets and traditional estate planning process and then some of the other nonfinancial assets and how they're treated throughout the generations. But one of the things we haven't touched on yet but I think is equally important and also not discussed often enough, is your personal care and especially how do you want things to... How you'd like your healthcare to be treated later on in life and as you're approaching the end. So what types of conversations do you think should be and considerations do you think families should be having?

Tim: Sure, you know I think in the traditional estate planning process we talk about a healthcare directive and a healthcare directive usually involves questions like, "Do you want any artificial hydration, nutrition?" Those sorts of things when you reach the end of your life and stopping those things would terminate your life. But the healthcare directive directives don't really address those months, weeks, even years leading up to the end of your life where you might've experienced a terminal illness diagnosis and now you have to live through it as you're in the process of dying.

Tim: So really getting down to three essential questions that guide you through this care process, this care journey. Who are the primary caregivers going to be and what is their support team going to look like? Is very important. What resources are going to be used for our end of life care recognizing that it can be a long time and a lot can change throughout that period of time? And then finally the remembrances and celebrations of our life. This is an area that's often overlooked and usually kind of we rely on those traditional approaches like funerals and wakes and we've seen a lot of changes in these areas. So we're going to talk about, I think each of these areas separately because they all warrant their own discussion.

Justin: Absolutely. You know, one of the interesting things that we run into with clients in constant questions and really a big cause of family disharmony is who the caregiver and primary caregiver is going to be, what the team looks like, but also should that caregiver be compensated? And what can other family members bring to the table if they're not able to devote their time?

Tim: Sure. As anybody who's been in the role of a primary caregiver can attest to, being that person is extraordinarily exhausting, both mentally and physically and also extraordinarily important, as you're coordinating and really providing all the care for a loved one. So a lot of times that falls on a surviving spouse or you know, the spouse who's healthy or an adult child that lives nearby and just happens to be the most convenient to help. But that's not always the right answer. We really want our families to have conversations about who's the caregiver going to be, how much time can they devote to these sorts of endeavors when they're caring for a loved one?

Tim: It can also come at a great financial strain and time constraint on them. So when you see this happening to them, it's important that we consider things like compensation, recognizing that it's difficult to do and there are some personal sacrifices going on, particularly for adult children who are stopping their life to take on the role of being a caregiver. So those other family members who aren't caregivers can also kind of more broadly or more definitively define their roles in this time and their roles that are equally as important and helpful because being a primary caregiver, you need some care yourself. So you need somebody to look after your nutrition, your health, your grieving process, things like that. Those other family members can kind of help back fill those roles and make sure that the primary caregiver is supported and they can do what they want if they can for their loved one.

Justin: I think a lot of the disharmony that we see happen around this can be alleviated when you talk about this stuff ahead of time and have the open conversations. So there isn't resentment between, you know, one person just contributing financial assets but isn't willing to contribute their time. But there are different facts and circumstances certainly come into play and should be considered by everybody.

Justin: While we're talking about resources and how they should be deployed, you know, what's your viewpoint on it and what do you think families should be talking about when they, you know, pretty sensitive subject of how are you going to deploy resources and what should be done?

Tim: Sure. You know, a lot of times when we're confronted with a terminal illness, our first inclination is to throw every resource we have at the situation. And there are certainly instances where this makes sense. You know, maybe there's a therapy, an alternative treatment that can provide an extension of our lives or provide us some good quality of life while we're going through this illness. So I don't want to dead minimize the financial burden that people are willing to expend when somebody's sick.

Tim: However, we should really have discussions with our loved ones about the extent that they want their family's financial resources drained when their condition is deteriorating. And that's important, especially once they become non-responsive. While you're responsive, you're certainly able to help guide your loved ones in letting them know the type of care you want, the extraordinary measures you want to take in to extend your life and to provide you with better quality of life. But when you become non-responsive, those decisions fall largely on the healthcare proxy and the surviving spouse or our caregivers. So really communicating those things is important too.

Justin: So you mentioned health care proxy there and I think that's a great and important topic that kind of gets answered quickly generally during the estate planning process, at least in my experience. And I think there needs to be some additional considerations when identifying that person. You know, how do you think somebody should think about that as they're selecting a healthcare proxy?

Tim: Sure. A lot of times people go to the surviving spouse or the healthy spouse or kind of the oldest child that's close to be that position and to fill that role. But when you start bringing emotion into these things and really health care knowledge, they may not be the right person for the role. You really need to take a step back and consider who best knows your wishes, number one, which is very important. So it's important to have those conversations with somebody well ahead of time so that they know your thoughts on end of life care and really the eventuality of certain situations. So when you choose a healthcare proxy, attribute somebody that you're willing to and can have open and honest conversations with.

Justin: Do you find that people often know they've been identified as health care proxy?

Tim: No. Which is a problem and that's certainly when you look at finances, a lot of people are hesitant to open up their finances for a durable power of attorney and let them in and understanding everything. But a health care proxy would be the one person that would really want to know what my wishes are because of the sensitivity of things and the uncertainty that's left at the end if you don't communicate those wishes properly.

Justin: Absolutely. You know, we update our state planning process probably every five to seven years or so. So the treatment of different families and individuals and maybe there is additional bequests made and that sort of thing. So that's something you want to keep guarded for a while until you're really near those end stages of life when you're not going to change it again. Health care proxy on the other hand is very different matter.

Tim: Absolutely. And it can come into play certainly before the end of your life and there can be situations when you aren't healthy or kind of incapacitated for a short period of time where it's important that somebody knows that they need to act and make decisions that are in your best interest.

Justin: Love to just touch on real quick about care facilities and where this care should be given and what sort of conversation should be happening leading up to that time so that we make sure that the family's assets are being protected or we're deploying resources appropriately, but also that, you know, what should be important to the family when they're selecting the facility.

Tim: Right. So where you decide to receive your health care and spend your end of life, your time in end of life is really obviously contingent on your condition, right? So are you able to be at home? I think if given the option, most people would want to stay in their home as long as possible. I think a lot of families are quick to go to nursing homes or assisted living facilities when their loved ones could really end up spending more time at home and spending better quality of life during that time.

Tim: So exploring things like personal care aides, traveling nurses, and modifying your home for some adaptability features where you can have your loved ones stay longer. I think is certainly a discussion point for a lot of families, but a great option as well because we do find it to be a little bit less expensive than going to a traditional nursing home. You know, obviously as you progress in an illness or towards the end of your life, the demands for being in a facility such as a nursing home or trying to have a transition place like an assisted living facility, that might just be inevitable. But thinking about that ahead of time and understanding where you want those transition points to occur is very important. And then really lining up your financial resources to correlate with that is as equally as important.

Justin: So we've walked through the traditional estate planning process briefly, we touched on nonfinancial assets, now we've talked about care and now we've kind of gotten to the end. So as end of life is really getting close, what sort of ways are you seeing people sort of in a modern way celebrate themselves and be remembered for, you know, the future generations?

Tim: Our end of life remembrances and celebrations are an area that we're seeing a ton of change in. We have... A lot of people are used to the traditional approach of having a funeral and a wake. And when we think about this for our loved ones and our families, you know, these are usually somber, sad occasions that don't necessarily celebrate the bright life that our loved one might've had and the impact that they made on their family and friends. So we're seeing a really seismic shift in how people are being celebrated or how they're choosing to have themselves remembered.

Tim: One thing we're seeing a lot of is something called a living wake where you know, family and friends from all over, will travel to see a sick person or a sick family member, a friend one last time to have actually a meaningful goodbye that's impactful on both their life and the person who is unfortunately reaching the end of their life, can get some closure on what these people really meant to them in their life. So that's an area that we're seeing a lot of changes. We've had some clients actually partake in something like that. There's also, we've probably all heard of celebrations of life, which again are a different approach to these funerals and wakes where you're really having a party to celebrate the light the person was and the kind of person they were in life. And I think you have a story about a client that...

Justin: Absolutely, we have a client of ours that feels very strongly about the celebration of life and hates attending wakes and funerals himself. And earmarked in his will, $50,000 for a blowout party at a beautiful venue to really celebrate the friendships and relationships with his family and friends and you know, kind of give him one last big party sendoff and I think that's great. And you know, I hope I'm invited to it when the time comes.

Tim: Yeah, there was actually a recent documentary that I watched that showed also non-traditional approaches to burial. So burial obviously a very traditional sort of approach to the finality of life, but we're seeing people do it in all sorts of different ways. So there was a gentleman who had a strong affinity to the ocean and the beach and he decided to have his cremated remains become part of an artificial coral reef and dropped into the oceans and his loved ones snorkeled down and said goodbye to him there.

Tim: There was another person who was infatuated with outer space, so he found a way to have his cremated remains shot up into the unknown on a rocket. So two very unique approaches to kind of the eventuality of your life and where you want to end up at the end of the day, and very interesting.

Justin: Certainly in much different than the most of us will probably end up.

Tim: Right. And I think you had or read a book recently that was a little bit more traditional in its approach, but more I guess meaningful and some interesting choices this gentleman made.

Justin: Sure. I read a book called Chasing Daylight by Eugene O'Kelly, I think he was the Chairman of KPMG and unexpectedly found out that he only had six months left to live and you know, obviously had considerable resources given his position. But rather than deploy those resources on extending his life perhaps without the best quality of life, but he decided instead to deploy his resources to create one perfect moment with his loved ones, whether it's family or friends. With his son, he took him on one perfect ski vacation in Europe. With his friends, he organized a giant tailgate party and a trip to the Superbowl. And for his wife, you know, they made one last trip to that honeymoon hotel.

Tim: Sounds like a gentleman who certainly had his traditional estate plan in order, so probably had his will, his healthcare proxies and all these sorts of things wrapped up with a bow on it. But more importantly he took the time to have some self reflection on what he wanted his end of life care to look like and have conversations with his family and friends on what was important to him to really celebrate the relationships they had in life and really kind of how he wants to be remembered into the future. So it sounds like a touching book that I'm looking forward to reading.

Tim: Well thank you for spending some time going through this challenging but very important topic with us. We know these are kind of unpleasant conversations to have with our family and friends, but they're certainly very important conversations and ones that'll make the transition to a very difficult time, which is your end of life much more smooth and hopefully provide you with a legacy and remembrance that is everlasting and comfortable for everybody.

Justin: We created a guide that you can download at the link below to help you through these conversations with family, but you should begin it with yourself and answer those questions. Thanks again.

Download End-of-Life Planning Guide.

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© 2019 Sanderson Wealth Management LLC. This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting, or tax advice from their own counsel. All information discussed herein is current as of the date appearing in this material and is subject to change at any time without notice. Opinions expressed are those of the author, do not necessarily reflect the opinions of Sanderson Wealth Management, and are subject to change without notice. The information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed.