Life Planning

Life Planning

Man plans, God laughs.
-Yiddish Proverb

Ben Franklin once experienced a constant harassment from an important and powerful political opponent. Franklin was aware that his opponent possessed an unusual and rare book, and he asked his opponent if he might borrow the book. His opponent agreed to the loan. Franklin returned it in due course, having taken good care of it along the way. Thereafter, his opponent never again harassed Franklin. Ben Franklin reported the event as a strategic effort to improve his relationship with that individual, and it worked.

Asking someone for help creates a bond.

Recall Alice, in the first chapter. Alice's friends and family were entirely unaware of her health or financial circumstances, until it was too late.

If at the minimum, Alice had designated a friend or two as emergency contacts, her doctors would have known to call then when she fell ill.

But beyond that, the estate planning process itself might have had some benefit. By asking for assistance from friends or family, the process could have helped her; her friends and family may have realized how much she valued their relationships. It might even have generated a sense of community and common purpose in her life.

No one is so independent that they don't need a plan for the future, and no one is so independent that they won't benefit from bringing others into their lives.

As we just discussed, life planning is about maintaining financial and physical health. It's about preventing sudden curveballs from turning into catastrophe.

The following is a list of life planning documents commonly executed through estate planning:

1. Financial Power of Attorney

Generally speaking, a Power of Attorney (POA) means that you give someone the ability to make legal decisions on your behalf, but it's common that POAs are limited to certain categories of responsibility. POAs are effective immediately unless limited; you can also have a POA deemed effective only in the event that the grantor of the POA (you) is incapacitated.

In a financial POA, you give a trusted person the ability to make financial decisions for you.

A significant advantage of having a financial POA is that if you become disabled or incapacitated for any reason, your POA can perform necessary work on your behalf-from paying bills to selling stocks and other property. With a POA, it's less likely that you'll need a court-appointed guardian. Avoiding the necessity of a court proceeding can save you several thousand dollars in legal bills and court fees, and can maintain a measure of independence, though courts often are concerned about limiting guardianships to only the required controls over the individual.

A POA can also be an advantage even if you're healthy. It can be simply a matter of efficiency: A POA may be able to act for you when you have a time or availability issue, or lack the knowledge to competently deal with an issue.

There has been an attempt to adopt common pro-forma language in POA grants under model codes adopted in many states, but it has been our experience that most banks will not accept POAs that fail to specify the powers in the POA itself, where the model forms often rely instead on state statutory materials. Because financial institutions often cross state lines, they often require that POAs specifically spell out the powers granted in the instrument signed by the grantor.

Some states do not require the recipient of the power honor the POA, but they are permitted to do so if they wish. When a financial institution or other entity refuses to honor the POA, it may require court action to accomplish the work. In that case, a guardianship, conservatorship or other court order may be required, triggering legal costs.

2. Health Care Directives

A health care directive allows you to delegate decisions relating to your health care to another person, when you are unable to exercise control over your health care. While there are many considerations under a health care directive, the basic idea is to provide health care direction through a chosen representative to your medical team to provide your care in case of your incapacity from doing so, and to do so consistently with your personal preferences.

The specific forms and requirements for the directive are set by state law, but they may usually be altered consistent with the intent of the statute; generally, the forms are executed in the same manner as the form is provided by statute, since most of the personal aspects of directing care may be accomplished through discussion with the designated agents.

Since accidents can happen at any age, this is an important document for any individual, young or old.

As a companion to a health care directive, you may consider preparing an authorization for release of health information for those mentioned in the health care directive. Without this "HIPAA release," as it's known, federal privacy law prevents physicians and medical staff from releasing medical information to anyone other than the patient. Also, the Living Will is another companion document to the health care directive that is often executed, as is mentioned below.

3. Living Will

Not to be confused with a health care directive, a living will is a declaration or publication of your desire to not be sustained in life by your physicians under very specific conditions. Usually these include:

  • your election to withdraw or withhold food and water in the event you are permanently unconscious; provided that,
  • you would feel no pain from the withdrawal or withholding; and,
  • death is imminent in the absence of life support; and,
  • your physicians do not believe they can provide any therapy to make you better.


A living will may be thought about as further support for your health care agents in the event of the occurrence of these specific conditions, though the health care agents may act in these regards without a living will. Executing a living will may provide emotional support for your health care agents in such circumstances.

There are also other provisions in the living will, such as Do Not Resuscitate (DNR) order, or similar provisions. These may be also handled through the health care agent, or through your direction to your physician.

4. Trusts

A trust is a legal structure where property is held by one person for the benefit of another person. A person creating the trust, known as the Settlor or Grantor, gives the legal title of assets to a Trustee of the Trust, so that the settlor/grantor no longer owns the assets.

Thereafter, a Trustee holds the legal interest, and a named beneficiary of the Trust will receive the benefits of the assets. How specifically the beneficiary receives the Trust's assets is subject to the terms of the Trust.

Trusts can be revocable, meaning that they can be terminated by the Settlor or Grantor, or they can be irrevocable, meaning the gift is a permanent transfer of the legal title to the property during the term of the Trust. In the estate planning context, trusts are used for a wide range of purposes.

For example, trusts can be a tool to manage assets during a Grantor's life for the Grantor's benefit. Because the trust holds the assets, rather than the Grantor, the trust can preserve assets, manage the Grantor's health care expenses, and fund the Grantor's daily living expenses, all while managing the bank accounts used for these purposes. This can be a significant benefit, should the Grantor become ill or incapacitated.

In cases where someone is in need of court protection, such as incapacity due to illness, they can nominate a guardian to serve under the court's supervision for this purpose. Often these nominations for guardianship are made in a Power of Attorney, but they can be made in other documents.

By preparing a nomination of guardian, you can reduce court courts, while also providing an orderly direction to the court and your family for your care or for your family during a time of need.

Without these documents, courts may become responsible for your decisions. These related court-proceedings can cost thousands of dollars-on top of the emotional costs of these issues, if there are family disputes or uncertainty about what to do.