Five Wishes to the rescue!

Most Americans don’t have wills, but that’s not the crisis that many in the estate-planning industry would have you believe. With a few exceptions, which we’ll talk about below, most people’s quality of life won’t be much improved by a will.

That’s because your state already has a basic plan for distributing your stuff when you die. You’re dead, so what do you care? If who got your compact disc player or your comic book collection wasn’t important enough for you to bother with a will while you were alive, it certainly won’t matter to you after you’re gone.

What your state doesn’t have, though, is an efficient way to take care of you if you’re still breathing but unable to make your own decisions because of incapacitating illness or injury.  So if you get in a car accident and die, your estate will be distributed more or less efficiently.

Get in a car accident and end up in a coma, and you could be in a world of hurt.  Every other decision regarding your life — what you eat, how your bills are paid and how hard your caregivers should fight to keep you alive – Who will pay your bills or wrangle with insurance companies about your care? Who would decide whether to sue that driver who hit you — or to shut off the respirator that’s keeping you going — have to be made by others.

The state will eventually find someone to fill these roles, after a potentially costly and time-consuming court hearing. But it might not be the person you would want. So at a time when you’re most vulnerable, life-and-death decisions could be made for you by a stranger — or an estranged, distant or greedy relative.

That’s why you need the following documents:

• A durable power of attorney for health care, which lets you identify who will make medical decisions for you. (This is also known as an advance directive or health care proxy.)  The U.S. Supreme Court has ruled that every individual has a right to direct his or her own medical care, even if loved ones disagree with those directions.

• A durable power of attorney for finances, which designates who’ll handle money decisions.

• A living will, which tells doctors exactly what kind of care you do and don’t want to receive if you’re terminally ill and incapacitated. (Some states, including Kentucky, Minnesota, Oklahoma, Oregon, South Carolina, Virginia and Wyoming, combine the living will and the durable power of attorney for health care in the same form.)  (For a free copy of Five Wishes See side Bar.)

Decisions about health care and money

You also have to figure out whom to name as your “attorney in fact,” or proxy, to help implement these decisions for you. Keep in mind:

• Two heads may be better than one. You don’t have to name the same person for both powers of attorney. In fact, many people find that the people they trust to make health care decisions are different from the ones they want handling their finances.

• Spouses are good, but have a backup. If you’re married or in a committed partnership, that person is a logical choice to fill both roles. But you’ll still need backups in case he or she is injured or killed in an accident with you, or is unable or unwilling to serve.

• Keep them close. For the health care directive, you’ll probably want people who are nearby or at least willing to travel to the hospital to be with you, perhaps for an extended time. The person handling your finances may be able to do so remotely, although you may still prefer to name someone who lives relatively close for convenience. In addition to paying your bills and handling insurance claims, the person handling your finances may also need to sell your home or make other complicated moves that require more proximity.

• Make sure they’re tough. With your health care proxy, especially, you need someone who’s forceful enough and committed enough to your stated wishes to advocate for you, regardless of what others (including family and medical professionals) might think.