Welcome and Happy Monday! Today I’m going to be tackling that most cheerful of topics, preparing for your own disability or death. It’s all part of the second tier to financial freedom, where you’re working to protect yourself and your family (such as from personal property damage, identity theft, and your own investment mistakes).
“Wait CMO,” you may be thinking, “you already wrote about disability and life insurance the other day. What more is there to do beyond insurance?”
Well, dear reader, first thank you for paying such close attention to my blog. And second, preparing for disability and death goes way beyond simply having insurance. Yes, having the appropriate insurance in place is an important part of protecting your family in the event that you are no longer able to earn income. But there are a lot of other miscellaneous tasks that you can do to that will help your family in their time of need. Of course, if you missed the article on insurance I’d suggest you pop on over and read it now.
If you’re thinking that you’re young, and this doesn’t apply to you, or that only other people get disabled and pass away at a young age, I’d ask you to reconsider. As I wrote about in my emergency planning article, my husband almost passed away from septic shock several years ago. After that happened, he became totally disabled for over a year, and partially disabled after that-continuing to this day. How old was I at the time? I was only thirty one years old. He was thirty seven. I never thought anything like that could happen so young, but I was so wrong. I hope you can learn from my mistake and work to get your family in a good place should anything happen to you.
What does preparing for your own disability and death look like? Well of course there’s insurance (above), but also the usual wills, power of attorney, advanced medical directive, and social security death/disability benefits. But there’s also a bunch of things that no one tells you about-and that you don’t even think about until it’s too late. So today, in addition to writing about the usual topics, I’ll also be gathering a list of information I wish I had on hand when my husband was in a coma in the ICU.
If you already have a will in place, great work! Skip down to the next section.
If not, why not? Is it because it’s too expensive? Too difficult to think about what you want to happen in the event that you die, or both you and your spouse die? I felt the same way as well, but the sad reality is that death won’t wait for you to create your will at the last minute. We’re all going to die one day, we just all hope it will be way off in the future. But just in case it might not be, lets go ahead and create a will.
Creating a will is easier than you might think, especially if you create a net worth statement on a regular basis. There are a few key decisions you need to make:
- Where you want your assets to go – typically this would be to your spouse, then your children if you both pass away. You may have special considerations as well, such as providing care for a disabled child, donations to charity, second marriages, etc. If your assets are going to minor children, you also need to select someone to manage their money until they’re an adult
- Who will administer your estate – ideally it would be someone with experience administering estates. If you don’t have a responsible family member or friend that you trust, you can usually get a lawyer or bank to do it for a fee
- Who will care for your children – for me this is the most difficult decision. If you have minor children you want them to be cared for and loved, espeically if they have to deal with losing their parents at such a young age. But it’s important that you make the decision and make sure the person/people you select are up for the job. You don’t want your kids to be in the middle of relatives fighting at the same time they’re dealing with the loss of a parent.
Once you’ve made those decisions, it’s all about recording them in the legal way in your state. Creating your own will is something you can do online, but lots of sites will recommend seeing a lawyer. That’s because the laws about valid wills vary by state, and you want to make sure it’s done right.
Durable Power of Attorney
A durable power of attorney can be a useful document in the event that both you and your spouse become incapacitated. Lets say that you’re both in a car accident and in the ICU. Someone will need to make decisions on your behalf-medical decisions, financial decisions, and decisions about your children. Having a durable power of attorney in place helps designate who that person would be in the event you become incapacitated. You can actually set up a power of attorney to only go into effect in the event of incapacitation (called a springing power of attorney). Be sure to work with a lawyer on this one.
How might this help you? When my husband went into septic shock, it was a sudden event and *boom* he was in a coma in the ICU. I distinctly remember after they had rushed him to the ICU, after a few hours a nurse came out with a form where I had to give permission for them to do all kinds of things-put him on a ventilator, insert a neck IV, and several other things I can’t remember anymore.
That event got me thinking-what if we had been in a care accident together and were both in the ICU. Who would make those decisions? Who would take care of paying the bills while we were in the hospital? Who would even know what the bills are? Setting up a power of attorney will help your family in the event you become incapacitated and someone needs to manage your affairs for you.
Advance Medical Directive
This is also called a “living will”, and outlines exactly what you want-and don’t want-in terms of medical care should you become incapacitated or otherwise unable to communicate your wishes.
There are some scary facts about care in America:
- 25-55% of US deaths occur in a health care facility
- Medical care of the dying is frequently unnecessarily prolonged, painful, and expensive
- 1.4 million Americans are kept alive thanks to feeding tubes
- Studies indicate 70-95% of people would rather not be kept alive solely through the use of aggressive medical interventions-but our system is set up to intervene aggressively
An advance medical directive/living will sets forth your wishes for medical care. Do you want to be kept alive through the use of machines, even if the prognosis is poor? Likely not – but if you don’t put your wishes in writing, your loved ones won’t know that. They may feel pressured by the doctor/hospital to continue with aggressive interventions and believe that’s what you would have wanted. If it’s not, be sure to complete one of these documents. Picture what you would want to tell your loved ones about your medical care wishes if you were talking to them today. And then put it in an advance directive so there won’t be doubt in their minds that they’re making the decisions you would have wanted.
Social Security Death and Disability Benefit
I talked about this a bit in the article on life insurance, but be sure to check out what your family would receive in social security benefits in the event of your death or disability. You can go to SSA.Gov and get your statement today. I’d suggest keeping a copy with your other documents (hopefully in a safe deposit box or other secure location) so your family knows how much they would receive in the event of your passing or incapacitation.
One note on Social Security disability benefits – don’t count on them except in the most extreme of circumstances. When I said above that my husband was disabled, I didn’t mean that he received social security disability. We’ve never received anything from social security. Why not? Well, despite what some people may think or tell you, it’s really not easy to get those benefits:
- There’s usually a 12 month waiting period before you can get benefits. Talk about showing the need for an emergency fund! There are exceptions for some medical conditions
- They test how your ability to do work is impaired; whether you can do your past work; and whether you can do any kind of work. If you can do anything, you’re not disabled.
- Talk about showing the need for own occupation disability insurance!
- About 53% of social security disability claims are denied! You often need to work with someone specializing in social security disability in order to be approved
So print out your statement today, and file it away with the rest of your documents.
The Things No One Tells You
When your spouse is in a coma, there are so many things that run through your mind. Some of these are “I wish I knew…” statements, because your spouse is not awake to tell you anything. The best way you can help your loved ones is making a list of the things they would wish they knew about how to manage your affairs while you’re incapacitated or immediately after you’ve passed away:
- What are the kids school and after-school activity schedules?
- What are the kids favorite foods, and not-so-favorite foods? Friends? Teachers?
- When is the garbage taken out? (Oddly this is the one that upset me the most-I didn’t know when to put the garbage out)
- Who holds the mortgage, and when is it due?
- Who provides your utilities, and are they automatically paid or do they need to be paid every month?
- Who holds your checking account, savings account, and credit cards?
- Where are all your accounts?
- How do you work the lawn mower, leaf blower, snow blower, etc? (I hated feeling helpless because I didn’t know how to work these-they were chores my husband always did)
- What kind of funeral would you want? Do you want to be cremated, or have a religious funeral (or specifically not have a religious funeral?)? A funny light heated funeral or something more traditional? If cremated, do you want your ashes scattered somewhere specific? (This was something my husband and I never talked about, so if he had died I wouldn’t have known what he wanted)
It can seem morbid to think about these things, but my perspective is that it’s an act of love for the people you leave behind to outline, in as much detail as you possibly can, what should happen in the event something happens to you. If you become incapacitated or pass away, your loved ones will be dealing with unimaginable grief and pain. Don’t add to their pain by adding in financial troubles, or worrying about whether they’ve followed your wishes, or trying to figure out how things should run in your life. Help them by creating the right documentation to leave no doubt as to your wishes, and to help them through the first weeks or months of running your life for you.
What other items that people don’t talk about would you want to know in the event your spouse became incapacitated or passed away? Have you created this kind of documentation, or are you still thinking about it? Let me know in the comments.