The following is a guest post from Chris Sipola, a reader I met while we were stuck in Frankfurt after our plane back to San Francisco broke down. We drowned our sorrows over free drinks at an airport hotel courtesy of United. At least we got a ~$800 travel voucher.
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.
Background On Preparing For Death
I got a call from my father’s neighbor who had taken my dad (Jim) to the ER 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 my brother and I learned several things that we’d like to share so that others can avoid some of the same missteps we made.
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.
Trust – Jim created his trust in 2005, when my brother and I read it in 2015 we found the trust included real estate that Jim sold years before and bank accounts that he’d closed since he created the trust.
Will – Jim had very detailed instructions about how he wanted his assets distributed upon his death, he even sent my brother and me regular updates to be sure we 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 my brother and I met with the ICU 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 POA – Jim’s Durable POA (a document essentially allowing me or my brother 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 my brother and I met with Jim about these documents on a regular basis (annually?) we would have known 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 – news to me and my brother and had we known Jim’s health care coverage we may have helped him make different choices.
Medicare Website – The site is concise, informative and written in fairly straight-forward language. My brother and I referred to the Medicare site often during my Jim’s care and it helped us make good decisions, for example what care facility to put Jim into after his hospital stay… more on this topic below
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.
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 we found that Medicare rules allowed us 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 we were not really able to shop for skilled-nursing facilities either on quality or cost considerations, under considerable pressure from the Discharge Nurse (I recall her saying, “This is really your only option”) all we 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 we were fortunate enough to be able to cover those costs. In the skilled-nursing facility our father had 24 hour care, if we had to move him into my house a nurse would have stopped by for a few hours several times per day and I would have been responsible for the rest of his care.
Bills, Accounts, Monies and Stuff
In the midst of dealing with care, our own grief and the rest of life, my brother and I had to figure out how to manage our father’s financial life.
Our father was conscious, he just wasn’t mobile or capable of executing checks – Jim was often medicated so his instructions on handling his finances were often unclear.
I found that even with the Power of Attorney it was difficult to get banks or creditors to assist with account information. In several instances I simply impersonated my father (especially on the phone) and was able to take care of what I needed – it wasn’t legal, it was just effective.
I had just left the skilled-nursing facility when a nurse from the facility called to tell me our Jim had passed away. It was about 4PM on Sunday, it hit me like a ton of bricks and the nurse informed me I had four hours to move Jim’s body – I had no idea what to do and the nurse offered to call a local mortuary on my behalf and have Jim moved, I agreed without question or protest.
Jim had purchased a plot where he wanted to be buried – when I reviewed plot documents and Jim’s burial instructions I 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, we really weren’t in a position to shop based on quality or cost considerations, so we just went along.
Even though Jim had bought his plot, the cemetery charged approximately $1,500 for the burial, casket liner and headstone, so again we just went along.
We did not have a service as per our Jim’s instructions. A co-worker told me that he recently planned a service for his father-in-law that cost $20k+ – he likened it to throwing a big wedding with two days advanced notice.
It’s been a few months since Jim passed and my brother and I are 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 our father led.
Everyday there is a new piece of mail – something from Jim’s trade union, a card from one of Jim’s friends that neither my brother nor I have met or a bill for something that causes a curious pause.
My brother and I worked very well together – I handled day-to-day stuff since I am local and my brother did lots of internet research and made lots of calls since he lives on the East Coast.
As part of forward planning for a parent’s death we recommend that all related parties (sibling, spouses, etc) be part of regular discussions on medical decisions and material possessions so there are no misunderstandings or arguments when the day finally arrives.
While Jim was in the hospital my brother and I had to make decisions about Jim’s care – after Jim passed away we had to make decisions about what to do with all of his “stuff” – vehicle, housewares, etc.
I have heard horror stories about family members fighting over medical decisions and sentimental items and the one thing my brother and I got right along this journey was we did not argue – not one time – about Jim’s care or what to do with Jim’s 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 and the more decisions that can be made in advance the better the survivors will be.
So here’s your checklist:
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 and 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 so that 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 such as simplified issue life insurance and final expense life insurance.
Now, go have some frank conversations with your parents.
Note from Sam: Thanks Chris for sharing your learnings about a difficult subject to help others. I’m sorry about your father and I wish you and your brother all the very best. If others would like to share their experiences dealing with death of a loved one and how you dealt with the estate, please do. We’ve all got to deal with the inevitable some time.
Life insurance recommendation: If you’re looking for a one-stop shop life insurance comparison site, check out PolicyGenius. You’ll save time from having to check quotes one by one. PolicyGenius is the leading insurance lending marketplace where qualified insurance carriers compete for your business. I’ve met the founders multiple times before and they are great.