In business- if you fail to plan, you plan to fail.  In these cases, if you fail to plan, other people get to make your decisions.  If you are alive and ill, then  it’s terrible.  If you are not, then your heirs may recall things with more than a bitter taste in their mouths.  Consider them, prepare your choices, and act.

I’ve asked you on Wednesday to prepare a living will (aka, advanced medical directive).  These documents were first created in the 60’s, but the Quinlan case (the one where the woman lasted in a vegetative state [almost] forever) drove the case home for a lot of folks. OK. Maybe not a lot- only about a quarter of us.

Moreover, technology is changing. This makes it difficult for our health care agents- or our loved ones- to know what it means when we say “pull the plug if we can’t have a meaningful quality of life”.  We each have different definitions of that concept- and there is no universal definition upon which someone can rely.  We really need to spell out which cognitive decline we can accept.

A good way to conceive of this situation is to examine the “Five Wishes” concept.  It’s not free- but it’s well worth the nominal fee ($5) that it costs to complete the questionnaire.  The first two sections are actually legal documents (who is the healthcare agent, and what kinds of medical treatments will be acceptable).  The other sections address comfort of care, where to be treated and who/how does so, and final wishes for one’s loved ones.  (Yes, it’s more than an advanced medical directive.)

Of course, you can provide your designated health care agent simple instructions- “if you doubt, don’t treat me” is about as simple as it gets.   But, I still vote for the actual advanced medical directive- it works in every state.

And, yesterday, we discussed our last wills and testaments (aka, wills). To divide up what little (or, for the precious few, how much) we’ve accumulated over the years. And, to ensure that our bills are settled, without leaving any messes for our loved ones when we are gone.

But, there’s one more leg we need to keep our stool balanced and stable. The Living Trust, also known as the Living Revocable Trusts.
If you are among the top 10% of earners in America, you shouldn’t wait a minute to adopt one.   (It’s not a bad idea for the rest of us- but our wishes may exceed our pocketbooks, as we age.) No, not to avoid inheritance taxes (but that is one of the prime reasons folks develop these trusts).  The real strength of a living trust is to handle our finances, living arrangements, and other aspects of our lives if we are physically or mentally unable to do so- not just to ensure that probate is avoided and that funds flow to our designees quickly.  And, should our living will (health care directive) stipulate certain life-sustaining messages, this trust is a vital component, to ensure proper funding and the continued function of a business or home.

Most of us senior citizens are worried that our health is at risk- the Living Trust can alleviate some of those concerns. Too many of us will succumb to Alzheimer’s Disease, where we won’t be able to maintain ourselves adequately. The Living Trust can ensure that our bills are paid and our lives are maintained as normally as possible, despite our ailments.

Moreover, for those of us who own a business enterprise, a living trust is vital to maintain the business- and, more importantly, that cash flow to ourselves.  The stock for the company would be owned by the trust, which can then be immediately managed by our designees.  Our company will not suffer from a lack of management and its value can be maintained and augmented, should become debilitated or we reach an untimely demise.  (We never consider it a timely one, do we?)

These trusts are fairly complex and should be individualized, even though I will provide a simple format for one in my next blog post.  You should obtain professional assistance in its development.

And, on that note, a caveat.  I was once asked to review a living trust document- and I noticed it had been copyrighted by the attorney.  Obviously, that document was not individualized- and, over the years, that trust has proven to be unseemingly complex, with a slew of problems that needed constant correction.  (Some of the changes necessary weren’t possible when problems arose, since the individual was no longer considered to be capable.)

A living trust is basically a legal entity created to hold ownership of all of an individual’s assets. (Think of it as incorporating oneself and all that one owns.) The person who forms the trust is called the Settlor, the Grantor, or the Trustmaker. In most cases, the Settlor also serves as the trustee for the revocable trust, controlling and managing the assets s/he placed there. Some Settlors prefer to have an institution or attorney act as trustee, although this is somewhat uncommon with this type of trust, unless and until the person is considered to be too ill to do so.

Monday, we will cover this idea in more depth.  (Since it covers our life, potential incapacitation, and death, it is far more complex than the other two legs of our stool.)

See you Monday.