Your most important estate planning document is not what you think it is
When people think of planning for end-of-life, they often think of creating a will. An important document dentists should consider creating, at any stage of their career, is a health-care power of attorney. This will make decisions much easier for your loved ones.
When most of our clients ask about estate planning matters, they’re most likely thinking about wills. Some of the more financially savvy clients ask about trusts. However, we’ve never had a client ask about the most important estate planning document that anyone can have—a health-care power of attorney and living will (if your state separates the two).
Why is your power of attorney so important? In all 50 states, there are laws to dispose of personal and real property in the event that you die without a will. While trusts are handy to ensure property is used the way you want it to be used after your passing, trusts are not necessary for the purposes of directing your assets to family. However, there is no legal or statutory replacement for writing down, in a binding format, your wishes in the event that you are still alive but lack the capacity to make decisions as they relate to your medical care and property.
While family members can seek conservatorship over property, the process is lengthy, expensive, and requires a court hearing to execute. The stakes are even greater with a health-care power of attorney, in which family members with differing philosophies on end-of-life care or different coping mechanisms for loss can significantly disagree on end-of-life measures for a loved one, which can result in extensive and expensive legal battles.
An example of why planning is important
This was all very apparent in the Terri Schiavo case. After sustaining a cardiac incident in her mid-20s, Schiavo had significant brain damage that left her in a persistent vegetative state. Over the next eight years, attempts to recover function were limited in their success. In 1998, her husband petitioned the courts to remove her feeding tube. Since she did not have a living will or health-care power of attorney, her wishes on the matter were unknown. Schiavo’s parents contested the action. For the next seven years, there were 14 appeals, five federal district court lawsuits, and four denials for hearing from the Supreme Court of the United States.
If Schiavo had a health-care power of attorney and a living will, none of this would have happened.
All individuals benefit from having updated versions of both of these documents—young adults who are in college, newlyweds who have nothing to pass on to their spouses except significant debt, and any other groups that typically do not have a burning need for a will—all have a need for these documents to protect themselves and their families in the event of significant disability. The good news is that, in practically every corner of the country, you can find an attorney who will affordably and accurately draft these documents for people of all ages.
While it’s important to have a will to provide clear instructions for the transfer of assets, guardianship of minors, and other matters that come about with death, there is extreme emotional importance to providing your loved ones with the power of knowing and understanding your wishes in the event you are unable to speak for yourself. While the law can orchestrate ways to distribute property and assign guardianship, no one else has the ability to articulate how you want your most vulnerable hours of life managed. For that reason, your living will and power of attorney are the two most important documents you can execute.
Andrew Tucker, JD, CFP, and John K. McGill, JD, MBA, CPA, provide tax and business planning for the dental profession and publish The McGill Advisory newsletter through John K. McGill & Company Inc., a member of the McGill & Hill Group LLC. It is your one-stop resource for tax and business planning, practice transitions, legal, retirement plan administration, CPA, and investment advisory services. Visit mcgillhillgroup.com or call (877) 306-9780.