The Stewardship of Final Affairs, Part 2

Read Part 1.

The Advanced Directive

The Advance directive or health care directive is a document that allows you to document your wishes concerning medical treatments at the end of life.1 Because every one of us will die, this document is important. If you think not consider this:

  • The Terri Schiavo case2 and the debate about her wishes. Her husband said one thing and her parents disputed it. Her own wishes were never documented. Another such case was Karen Ann Quinlan.3
  • In my own family a relative had a health care directive of sorts—it was from his church but he had never had it notarized and filed. When he was stricken there was a mild dispute among his offspring about whether his ventilator should be removed. The doctors themselves would not agree to remove it because his wishes were not officially documented. He lingered longer than was probably necessary.
  • One might think, “that won’t happen to me!” In my own case I broke my neck in a serious accident when I was only 38. I was semi-conscious for a period of time. Decisions about my care had to be made.
  • My own mother wisely had a health care directive. She specified that she did not want any extraordinary means to extend her life. It was clearly documented and so there was absolutely no debate. My siblings and I knew mom’s wishes. This past March she was given approximately a week to live. She told my sister, “I’m going to heaven!” And she died the next day.

Often the advanced directive, durable power of attorney, and will is bundled together as a package with either an attorney or an online service such as LegalZoom. So the cost is minimal. Additionally an attorney is not even needed for the advanced directive: See Download Your State’s Advance Directives.4

The Durable Power of Attorney

A power of attorney is a legal document that gives someone you choose the power to act in your place. In case you ever become mentally incapacitated, you’ll need what are known as “durable” powers of attorney for medical care and finances. A durable power of attorney simply means that the document stays in effect if you become incapacitated and unable to handle matters on your own… . With a valid power of attorney, the trusted person you name will be legally permitted to take care of important matters for you—for example, paying your bills, managing your investments, or directing your medical care—if you are unable to do so yourself. Taking the time to make these documents is well worth the small effort it will take. If you haven’t made durable powers of attorney and something happens to you, your loved ones may have to go to court to get the authority to handle your affairs.5

It’s advisable to have a separate Medical Power of Attorney and Financial Power of Attorney because personal medical information would be pertinent to one and not the other. The Wall Street Journal notes: “there is no legal document that is more crucial than a power of attorney.”6

As mentioned before, this document may be bundled with the services an attorney provides or via LegalZoom. I have not used this particular service myself but LawDepot.com has free legal forms and Power of Attorney is one such form they offer.7

Declutter & Organization

“Declutter” is not an actual word, while “unclutter” is. My wife jokingly told me just today: “these are two words not in your vocabulary.”

We did a long distance corporate move 20 years ago—it was the full shebang where the company did everything—even compensating us for new drapes. Kathee was working in Minneapolis, flying home on the weekends; and I was back in Denver working and trying to cook and manage the house. Movers came in and packed everything. As my wife would later relate, “they would pack a dirty tissue if you let them”.

We had lived in Denver for over 9 years and so we had 9 years of accumulated stuff on top of the accumulated stuff from the previous 22 years of marriage. In my college years I used to scuba dive. In a box were diving flippers. I hadn’t used them for over 20 years … still in a box labeled “flippers.”

That box got moved again.

Several years ago Kathee and I spent most of a day cleaning out our den. In the den we have a large oak desk. I had years and years of checking account statements. Whenever I received a statement I would balance the checkbook and attach a spreadsheet. Also in a drawer were many years of canceled checks. We about burned out our shredder that day. Finally, when the shredder overheated and gave up for the day (it was like a scene from “All the President’s Men”), we piled documents into black garbage bags and took the bags to an office supply store to be shredded.

Here’s the lesson: Declutter and do your heirs a great service. They will thank you for it!

Mom was a bookkeeper in her youth and fairly organized. She used to have one green-ledger style page for each month where she recorded every income and expense item. She also did a fairly good job of decluttering. She slipped a bit in the end because of her age and mental state, but nevertheless did not leave her children with a large mess.

A funny story is that in the week or two before Mom died, she told my sister there was money in her apartment (she was in the hospital at the time). So we siblings wondered … was she talking about $50? $1000? Just what? After her death, we sorted through her stuff and found … $10 in bills and coins!

Organization is perhaps the flip side of declutter. Organization answers these financial questions:

  • What is important?
  • Where is it?
  • What are the details?

Mom did an A+ job on organization. Even though the conversation was often times uncomfortable, Mom would tutor me on my annual visit: This is what I have in stocks, here are the funeral arrangements, this is the will, et cetera!

One area where we had to help Mom. Dad retired from AT&T and they had a certain number of shares of AT&T. stock. His retirement was before the breakup of AT&T.8 in 1982 and Mom and Dad had their shares as paper certificates at home rather than as a book entry at a brokerage. Paper shares are quite rare today!9 The post breakup of AT&T. is rather complex: “Baby Bells” were created … some of them merged. And finally a Baby Bell acquired AT&T. and assumed that name. Every break up, merger, divestiture, et cetera generated more stock certificates. Mom wanted her estate divided three ways and her accounting method was to put yellow stickers on various certificates with the intention “these are Jimmy’s, these are Nancy’s, these are Roger’s”. That’s quite complex. With patient urging and education, we were able to direct Mom to have a relationship with a full service brokerage, Edward Jones, and they converted all of her shares to the bookkeeping entry method! I cannot imagine the difficulty of having to administer the estate had she had not followed our direction on this.

Preplanned Funeral

A worthwhile book is The American Way of Death.10 The premise of the book is that

death has become much too sentimentalized, highly commercialized, and, above all, excessively expensive … [the author] documents the ways in which funeral directors take advantage of the shock and grief of friends and relatives of loved ones to convince them to pay far more than necessary for the funeral.11

Mother preplanned and prepaid her funeral. She had a binder with the contract indicating it was fully paid and with all the pertinent details. There were two elements of the preplanned funeral: the funeral home and the cemetery. We had a bit of a wrinkle with the cemetery because it had changed hands more than once since Mom planned her funeral. The latest owners were not as professional as the funeral home. My sister, who was point person for this, was told that Mom hadn’t paid for a vault and that would be about $ 1000. My sister who herself is a retired airline executive really handled this well. It was “no contest” negotiating with her, as she had both the original contract and the professionalism to address the issue. Mom had paid for the vault and the issue quickly resolved.

Among other things about Mom’s funeral that we appreciate is the simplicity of it. While there was a casket, it was a simple steel Batesville casket—no wasted money being put into the ground!

By preplanning her funeral, Mom relieved her children of having to wonder about her wishes and debate it among ourselves (eliminating any possibility of dispute).

By prepaying for her funeral, costs were dramatically reduced. We did pay for a 3 man police escort from the funeral home to the cemetery, and for Mom’s obituary in the Fort Worth paper.

Speaking of caskets, did you know you can buy a casket at Costco?12 My brother-in-law has a humorous casket story. As he planned his mother-in-law’s funeral he shopped for caskets online. The funeral home disparaged that option warning that “the bottom could fall out of that casket”. While he did not buy the casket online, he was able to get the funeral home to match the online price. For one interested in a traditional simple wooden casket, Trappist Monks in Iowa will construct one and have it shipped to the funeral home.13

Executor of Estate

The Executor of the Estate is the person who will administer one’s estate. LegalZoom documents the top 10 Duties of an Executor:14

  1. Get a copy of the will and file it with the local probate court
  2. Notify banks, credit card companies and government agencies of the decedent’s death
  3. Set up a bank account for incoming funds and pay any ongoing bills
  4. File an inventory of the estate’s assets with the court
  5. Decide what kind of probate is necessary
  6. Maintain property until it can be distributed or sold
  7. Pay the estate’s debts and taxes
  8. Distribute assets
  9. Dispose of other property
  10. Represent the estate in court

I learned much from my brother-in-law’s handling of my father-in-laws’ estate. Kathee’s father died in the early 90’s and his estate had some interesting complexities. John had two houses in separate states. One house was in the very small town of Phlox Wisconsin. The practical complexity of remoteness of that home meant that there was not much demand. That sale took some time. Dave, my brother-in-law, had to sell two homes and dispose of all of the household contents. He did an admirable job in that while he himself lived in a third state, he administered all of these affairs and communicated monthly of the status of the estate with his siblings.

The executor’s job is basically project management. The skills that I advise are:

  • One who is trusted by the heirs
  • One who was familiar with the deceased—a son or daughter perhaps.
  • One who while handle his fiduciary responsibilities ethically15
  • One who will communicate effectively and regularly with the beneficiaries of the estate
  • One who has some financial skills and is attentive to detail.
  • Not a skill, but the executor’s tasks will be time consuming and this must be considered as well.

Conclusion

Most are familiar with the Benjamin Franklin quotation, “In this world nothing can be said to be certain, except death and taxes” and the proverb “you can’t take it with you” from the Pulitzer Prize winning Hart and Kaufman play of the same name.

Few may be familiar with the truths of the gospel: “Jesus said to her, ‘I am the resurrection and the life. He who believes in Me, though he may die, he shall live’” (John 11:25).

One’s estate, the inventory of what the deceased leaves behind, may be materially significant; but one’s soul is of eternal worth and significance: “For what profit is it to a man if he gains the whole world, and loses his own soul? Or what will a man give in exchange for his soul?” (Matthew 16:26).

The wise steward will attend the second primarily—to be saved! Romans 10:9, “that if you confess with your mouth the Lord Jesus and believe in your heart that God has raised Him from the dead, you will be saved.”

But the wise steward will also attend to the material details of life, including his final affairs.

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There are 21 Comments

Jim's picture

Close relative:

Parent died ... no $$ for funeral ... kids had to pony up cash for the funeral. (and obviously they had to quickly come up with the money)

Could be a very poor last memory

kirkedoyle's picture

Great job, Jim.

Jim's picture

One can pre-plan a funeral without prepaying 

Eg my wishes (and I hope it is a long time off!!!):

  • Closed casket
  • Burial in Minneapolis 
  • Simple Trappist casket
  • Standing headstone

Why upright headstone vs flat headstone:

  • Because I've done quite a bit of cemetery ancestor searching .... and 
  • Easier to find grave site with an upright stone

My family knows my wishes

On cemeteries:

  • My original preference was the Bowne Center Cemetery in Alto Michigan
  • I called and looked into
  • I have many relatives buried there 
  • Plots (lots) are super cheap
  • It is basically closed to most people but because I have so many ancestors there it is open to me 
  • Negatives:
    • Distance ... it is 600 miles from where I live and where I am likely to die
    • So I save several thousand on lots ... 
    • But my loved one would have to travel there for the burial ... the thousands saved me in an inexpensive lot would cost my descendants more thousands in travel expenses and time

 

Ron Bean's picture

I've had some experience in the Funeral Home business, and it is a business. The day of the locally owned and operated funeral home is passing (excuse the pun) and there are a lot of franchises. Families are emotionally tender and are having to make decisions under pressure. Caskets can be very expensive. (6 inch memory foam mattresses for "comfort".)

Both my parents pre-arranged and pre-paid at a locally owned funeral home. My mother went the extra mile of planning her whole service including the order that the preacher (me) tell everyone that she was in heaven because of what Jesus Christ had done for her and not because she was a good person.

"Some things are of that nature as to make one's fancy chuckle, while his heart doth ache." John Bunyan

Jim's picture

The executor is empowered to hire an attorney if he wishes:

http://www.nolo.com/legal-encyclopedia/executor-faq-29126-5.html

Basically, there are two ways for an executor to get help from a lawyer:

Hire a lawyer to act as a "coach," answering legal questions as they come up. The lawyer might also do some research, look over documents before the executor files them, or prepare an estate tax return.

Turn the probate over to the lawyer. If the executor just doesn't want to deal with the probate court process, a lawyer can do everything. (The executor is still responsible for making decisions about what to do, though, with the lawyer's advice.) The lawyer will be paid out of the estate. In most states, lawyers charge by the hour ($175-$300 is common) or charge a lump sum, but in a few places, including Arkansas, California, Delaware, Hawaii, Iowa, Missouri, Montana, and Wyoming, state law authorizes the lawyer to take a certain percentage of the gross value of the deceased person's estate, unless the executor makes a written agreement calling for less. An executor can probably find a competent lawyer who will agree to a lower fee.

With my mother's estate:

  • We are using (or will be using) her tax accountant for her final Federal taxes. Why? He's been doing her taxes for years and ... I don't want to do it myself
  • I engaged an attorney for coaching. I have legal services insurance and that would pay for it
  • As it turned out I called him twice .. .both were very short calls. 
  • The second call was about a pension check that Mom received a month after she died. What to do with that check? (We had already notified the company of her death). Lawyer said:
    • It really should  go through probate but the cost of probate would be more  than the worth of the check
    • I asked what I called a "Better Call Saul" question: "Can we just deposit it?" (the tri-executors had set up a joint account in our three names). 
    • He said : "go for it"
    • The bank is near my sister's house in Texas. I had her deposit it and told her "I will write to you in jail" :) 
    • It went through with no issues
Bert Perry's picture

Plus a zillion to the point of cleaning out junk.  My dad and aunt did it for my grandmother when she moved into a nursing home in the late eighties, so cleaning out her condo was relatively easy when she died in 2002.  For me, it was two quick trips to Omaha to meet my dad halfway (I was living around Boulder at the time) to get the furniture she'd promised to my brother and I.  On the flip side, nobody did that for my great aunt when she moved into assisted living around 2000, and when she died in 2010, a lot of the things she'd have liked to have in interested peoples' hands (she was a long time teacher and had tons of records going back into the 1930s), as well as a lot of books that might have been useful if they hadn't spent the previous decade in a musty basement, just ended up in the dumpster.  It was a tremendous amount of work for my uncles to clean that out.

Like the idea of the Trappist casket, too.  But that said, I always enjoy seeing the Batesville Casket Company trucks on the road with their "Drive safely, we'll wait for your business" on the back.

Aspiring to be a stick in the mud.

Jim's picture

We had 2 challenges with Mom:

  • Driving and the car

    • After she arrived in her 90's her driving became terrible
    • Neighbors complained
    • Our daughter was there and rode with her and reported back how terrible her driving was
    • I called the police department of her municipality and told them she should not be driving (they didn't care!)
    • When Mom was hospitalized the age of 91 (for about a week), we moved the car from her garage to my sister's
    • In a weak moment, Mom agreed that she shouldn't be driving. Everytime I heard a story about an elderly person having an accident and killing someone, I would relate that to Mom (stories like this)
    • We sold the car (sister had durable power of attorney) while she was hospitalized
    • And the car was gone when she was discharged
    • Mom was hopping mad for years! But she had officially agreed and we acted immediately
    • When she complained (as she often did to me), I would tell her "there's nothing stopping you from buying another car"
    • She never acted and settled into life without a car
  • Her house:
    • She really lost the ability to care for her house. Many stories 
    • We (siblings) urged her to move into independent living (small apartment in a retirement center)
    • She resisted for a year
    • "Virginia" saved us!
      • A friend of Mom's
      • Fell in her home and lay on the floor with a broken hip for several days before being found
      • When Mom found out about this, she was convinced
    • We got her moved into new space
    • Got a realtor and got the house sold
    • Siblings spent days cleaning out the house
    • She lived exactly 36 months in "The Watercrest"
  • So when Mom died, she had no probatable assets
Jim's picture

  • My sister received a very nice grandfather's clock. I could have taken it myself but it didn't appeal to me
  • My sister also took home (she lives locally to where Mom lived) a very nice antique desk and antique table
  • I have my grandfather's (died just a few month's after I was born - 1949) automatic pistol circa mid-1930's. It was in poor shape and I had it restored
Ed Vasicek's picture

These are some things I need to look into.  My daughter and her husband are urging me to consider putting all our stuff in a trust.  We don't have all that much,and other people have said it is not worth the effort.  Any opinion?

"The Midrash Detective"

Jim's picture

Ed Vasicek wrote:

These are some things I need to look into.  My daughter and her husband are urging me to consider putting all our stuff in a trust.  We don't have all that much,and other people have said it is not worth the effort.  Any opinion?

Advice - re Revocable living trust:

  • Because I know you are married ...
  • Highly unlikely (but of course possible) that you and your wife will die at the same time (unless auto accident, natural disaster, or plane crash, et cetera)
  • Use "joint tenancy" to transfer property assets to surviving spouse (the house, the car(s)
  • Use beneficiary route for IRA's, 401Ks, 403(b), life insurance (article part 1) w beneficiary as surviving spouse 
  • Upon death of 1st spouse, put house into Revocable living trust  w beneficiaries as your children. Your heirs can sell the house and split the proceeds
  • Upon death of 1st spouse, ​se beneficiary route for IRA's, 401Ks, 403(b), life insurance (article part 1)  w beneficiaries as your children

Article: http://www.nolo.com/legal-encyclopedia/revocable-living-trusts.html 

Quote:

Most people use living trusts to avoid probate. Probate is the court-supervised process of wrapping up a person’s estate.  Probate can be expensive, time consuming, and is often more of a burden than a help.  Property left through a living trust can pass to beneficiaries without probate. 

My understanding is that cars are normally not valuable enough to put into a trust and that auto insurance companies don't like it (we have 2 GM vehicles - a 2002 Chevy S-10 and a 2007 Buick with 100,000 miles. Combo value is probably less than $15,000)

You may want to have a conversation with a lawyer to confirm

Have simple wills that names your heirs:

Husband's will: Beneficiaries are: wife (by name) & children by names

Wife's will: Beneficiaries are: husband (by name) & children by names

---------- How I learned this  (besides much study)

I have a brother-in-law who is a multi-millionaire and his setup is as above

 

Jim's picture

Another important term = Latin term "per stirpes " (with regard to wills):

http://legaldictionary.net/per-stirpes/ 

The Latin term per stirpes is commonly used in estate planning to describe how a person making a will would like his assets to be distributed. In case a family beneficiary dies before the will’s owner, a per stirpes distribution means that person’s portion of the assets go directly to that beneficiary’s heirs. 

Examples of Per Stirpes Distribution

  • Roger has three children, Nathan, Emilia, and Alice. Roger passes away, and all three of his children are still living. Because of his per stirpes distribution in Roger’s will, each of his children will receive one-third of his estate. Of Roger’s $3 million estate, Nathan, Emilia, and Alice will each receive $1 million.
  • Roger has three children, Nathan, Emilia, and Alice. Roger passes away, but his daughter, Alice had passed away a year before, leaving behind two children (Roger’s grandchildren). Nathan and Emilia will each receive one-third of Roger’s estate, and Alice’s children will each receive one-half of Alice’s share. Of Roger’s $3 million estate, Nathan and Emilia will each receive $1 million, and Alice’s children will each receive $500,000.
  • Roger has three children, Nathan, Emilia, and Alice. Roger passes away, but his daughter, Alice had passed away a year before. Alice had no children. Alice’s share will remain in the pot, to be divided equally between Nathan and Emilia. This means that Nathan and Emilia will each receive one-half of Roger’s estate. Of Roger’s $3 million estate, Nathan and Emilia will each receive $1.5 million.
Jim's picture

Transferring Assets Into a Living Trust – Can You Do It Yourself?

https://www.legalzoom.com/articles/transferring-assets-into-a-living-tru...

House:

One of the largest assets most people own is their home and this is likely an asset you want to be sure to transfer into your trust. You can transfer your home (or any real property) to the trust with a deed transfer, a document that transfers ownership to the trust. A quitclaim deed is the simplest method (and one you can do yourself), however a warranty deed may be preferred since it ensures you have good title when you transfer it and makes it easier for your trust beneficiaries to sell down the line. You will want to check with an attorney about which type of deed is best in your situation. Some states require that all deeds be prepared by attorneys so you may not have a self-help option. Once the deed form is prepared, a real estate deed transfermust be filed with your county and you will likely need to pay a filing fee.

A deed transfer should not affect your mortgage, even if you have a due on sale provision. You should check on your title insurance (if you have any) though. You may be able to simply transfer it to the trust, or your title insurance company may require that the trust buy a new policy. Once the deed is transferred, you will need to change your homeowner’s insurance to indicate the trust as owner of the property. If you receive a real estate tax exemption, you will want to make sure that is transferred and you may need to show documentation of the trust to the taxing authority, such as a certificate of trust (a document your attorney can create that certifies the existence of the trust).

Cars:

If you would like to transfer ownership of your car or truck to your trust, you need to first determine if your state will allow a trust to hold ownership of a vehicle (check the DMV web site or consult your attorney). You also should call your insurance company to be certain they will continue coverage once the transfer is made. To transfer ownership, you will need to obtain a title change form from your DMV and complete it, naming the trustee (as trustee of your trust) as new owner. Sales tax should not apply to the transfer and if the clerk tries to apply it, you will need to speak to a supervisor. Note that owning a vehicle in the name of a trust can be detrimental if you are in an accident. The other person may assume you are wealthy if they realize your car is owned by a trust and sue

dgszweda's picture

I am not planning fo my funeral so that my kids have to do it.  Figured I would get back at them for all the times I had to plan for them Smile

 

Jim's picture

dgszweda wrote:

I am not planning fo my funeral so that my kids have to do it.  Figured I would get back at them for all the times I had to plan for them Smile

josh p's picture

My wife worked at a grocery store and sold a bunch of dried ice to a lady who was taking her deceased mother 2000 miles to have her buried. That would be an unforgettable trip. 

Jim's picture

http://www.lakewoodcemetery.com/ 

https://en.wikipedia.org/wiki/Lakewood_Cemetery

Lakewood Cemetery is a large private, non-sectarian cemetery located in Minneapolis, Minnesota, United States. It is located at 3600 Hennepin Avenue at the southern end of the Uptown area. It is noted for its chapel which is on the National Register of Historic Places and was modeled after the Hagia Sophia in Istanbul, Turkey

Notable burials there

Price list (up to $ 200,000) !!!!

Location

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