The purpose of this post is to help readers prepare for a parent’s death. But really, this post can help someone prepare for any family member’s death.
The preparation is very simple – Talk openly and often about all issues related to death in advance of the inevitable so the survivors have a game plan and time to grieve.
Open discussions about illness and death related items (medical decisions, wills, etc) seem unsavory and an invasion of privacy – trust that not having a game plan makes the situation much more unsavory. The survivors will find out more private items than they care to know.
Preparing For A Parent’s Death
The parent concerned here — Jim — was taken to an emergency room on the Saturday after Thanksgiving 2015.
Jim spent a week in ICU, a week in a regular hospital room, a few days in a nursing facility and died on December 13, 2015.
Over the course of those three weeks, the family learned several lessons that others would benefit knowing, to avoid similar missteps.
Trusts And Wills Are Just The Beginning
All personal finance experts recommend a Revocable Trust, a Will, a Health Care Directive and Durable Power of Attorney (POA) – below are some notes on why these items are just a start and why regular maintenance is required.
Jim created his trust in 2005. When it was read in 2015, it was found that the trust included real estate that Jim sold years before and bank accounts that he’d closed since he created the trust.
Jim had very detailed instructions about how he wanted his assets distributed upon his death, he even sent regular updates to his heirs to be sure they understood his wishes. The problem was that the cumulative (the original will + the regular updates) had distribution conflicts and included distributions to people that had died.
Health Care Directive
Jim’s directive indicated “DNR” (do not resuscitate), which seemed clear and complete. When his family was at the ICU with him, the nurse she asked for clarification of the “DNR,” for example: administering oxygen, intravenous hydration/nutrition and blood transfusions since all could be considered “life-saving” and not “resuscitating.”
Durable Power Of Attorney (POA)
Jim’s Durable POA (a document essentially allowing his heirs to sign docs and make decisions on behalf of Jim) only went into effect when he either became incapacitated or died. When Jim was coherent he made it clear he wanted all of his bank accounts emptied.
The Durable POA was useless (since he was neither incapacitated or dead) so I had to have a public notary come to the hospital to execute another POA – the notary had to be convinced that Jim was not under the influence of meds before executing the POA.
Had his heirs met with Jim about these documents on a regular basis (annually?), they’d have known of Jim’s wishes and operated according to a pre-prescribed game plan.
Medicare is complicated. There are several parts (A, B, C and D), it’s essentially government-sponsored health insurance with all sorts of interpretations, stipulations and limits that are all dependent on how the care is characterized. A few general concepts:
Medicare Parts – Jim had Part A and chose not to pay for Part B – again, news to his family. Had they known of Jim’s health care coverage, they may have helped him make different choices.
Medicare Website – The site is concise, informative and written in fairly straight-forward language. The family referred to the Medicare site often during my Jim’s care and it helped them make good decisions. For example: what care facility should they put Jim into after his hospital stay, etc.
Medicare General Overview – Medicare is quite generous with end of life benefits (hospice, pain medication for comfort, etc) and can be quite expensive for on-going diagnosis and treatment.
Long-Term Care Facilities
Hospitals are for sick people and hospital administrators want patients out of their hospital when the patient no longer needs treatment ASAP.
After Jim left ICU and was deemed “stable” the Discharge Nurse started finding a place to send Jim – it came down to two choices: a skilled-nursing facility or my house.
Jim was diagnosed as terminal with six months or less to live – his care was characterized as “end of life” so Medicare would cover hospice services costs. The caveat is that Medicare does not cover “the bed” in a skilled-nursing facility and a “bed” costs $4k-$8k+/month.
Jim had Medicare Part A and was not considered a great candidate for a skilled-nursing facility – couple Jim’s coverage with a shortage of beds at skilled-nursing facilities and suffice it to say the Discharge Nurse was hard-pressed to find a bed for Jim.
The Discharge Nurse found a few facilities that would accept Jim but they were 100’s of miles away; on the Medicare website, the family found that Medicare rules allowed them to “reject” distant facilities so Jim stayed in the hospital until a closer facility could be found.
Eventually, the Discharge Nurse was able to find a local skilled-nursing facility that would accept Jim – bear in mind that the family was not really able to shop for skilled-nursing facilities either on quality or cost considerations, under considerable pressure from the Discharge Nurse (They recall her saying, “This is really your only option”); all they were able to do was a quick internet search on the candidate facility before saying, “ok” and having Jim moved to the facility.
The skilled-nursing facility charged $4,500 per month for a shared room and Jim’s family was fortunate enough to be able to cover those costs. In the skilled-nursing facility, Jim had 24 hour care, but if he had to be moved back home, a nurse would have stopped by for a few hours several times per day and his family would have been responsible for the rest of his care.
Bills, Accounts, Monies and Stuff
In the midst of dealing with Jim’s post-ER care and the grief that later came with his death, his family had to figure out how to manage his financial life.
Jim was conscious, he just wasn’t mobile or capable of executing checks – he was often medicated so his instructions on handling his finances were often unclear.
His family found that even with the Power of Attorney, it was difficult to get banks or creditors to assist with account information. In several instances, they simply impersonated Jim (especially on the phone) and were able to take care of what was needed – it wasn’t legal, it was just effective.
Jim’s family learned from the skilled-nursing facility at about 4pm on a Sunday that he had passed away. The nurse further informed the family that they had four hours to move Jim’s body.
The family members had no idea what to do and the nurse offered to call a local mortuary on their behalf and have Jim moved, an arrangement they agreed to without question or protest.
Jim had purchased a plot where he wanted to be buried – when the family reviewed the plot documents and Jim’s burial instructions, they figured it was all pretty complete. Wrong.
The mortuary charged $500 to move Jim’s body from the skilled-nursing facility to the mortuary – a hefty fee for a 5-mile trip. The charges to prepare the body for burial, a casket and then transport to the burial site added up to about $3,000. Again, the family members weren’t really in a position to shop based on quality or cost considerations, so they just went along.
Related: Final Expense / Burial Life Insurance
Even though Jim had bought his plot, the cemetery charged approximately $1,500 for the burial, casket liner and headstone; again, the family just went along.
They, however, did not have a service as per our Jim’s instructions. Jim’s son learned from someone who has recently planned a service that it cost $20k+ – the person likened it to throwing a big wedding with two days advanced notice.
It’s been a few months since Jim passed and his family were working through estate issues – paying hospital bills, canceling accounts (very important because identity thieves scour obituary columns looking for targets) cleaning up Jim’s house for sale, donating monies and items as per our Jim’s instructions and learning a lot about the life he led.
Everyday there was a new piece of mail – something from Jim’s trade union, a card from one of Jim’s friends that no one in the family had met or a bill for something that causes a curious pause.
The family worked well together, handling the day-to-day stuff after Jim’s death, doing either internet research or calls.
As part of forward planning for a parent’s death, they recommend that all related parties (sibling, spouses, etc) be part of regular discussions on medical decisions and material possessions so that there are no misunderstandings or arguments when the day finally arrives.
While Jim was in hospital, his family members had to make decisions about his care. After he died, they had to make decisions about what to do with all of his “stuff.” This included his vehicle, housewares, and more.
There are horror stories about family members fighting over medical decisions and sentimental items. The one thing Jim’s family got right along was their determination not to argue – not once – about his care or what to do with his stuff.
Prepare For Death Ahead Of Time
Frank dialogue and forward planning is invaluable when a parent becomes ill, incapacitated or dies. There are lots of decisions to be made. The more decisions that can be made in advance the better the survivors will be.
Here’s your checklist for preparing for death ahead of time:
1) Make sure Revocable Trust, Will, Durable Power of Attorney and Health Care Directive are complete, detailed and up to date. A revocable trust is huge because probate court is costly, stressful, and takes a much longer time.
2) Know what health care coverage your parents have. Also know the relevant information (premiums, deductibles, stipulations, etc) about each form of coverage.
3) Look into Long-Term Care coverage. It is expensive for sure and may be worth it depending on you or your parents’ situation.
4) Have a plan on how you’ll operate your parents’ financial life while they’re unable to do so. The more you know about their current situation the better.
5) Make as many decisions as possible regarding final resting (cremation, burial, etc) in advance.
6) Make sure to involve siblings, spouses, etc. in all discussions. This way, all instructions and plans are well understood and agreed in advance.
7) Talk to an estate planning lawyer so you understand all your options. The estate planning lawyer will allow you to better prepare for the financial complications of death.
8) Know your life insurance options so beneficiaries can receive a death benefit. There are some life insurance options that require no medical exams. They include: simplified issue life insurance and final expense life insurance.
Now, go have some frank conversations with your parents.
- Adapted from The Financial Samurai
- Banner image from federalretirementservices.com