The Schiavo story demonstrates how important it is to have a medical directive - signed documents that state your wishes in the event of catastrophic illness or an accident that prevent you from communicating your wishes to doctors or family members. Death and taxes may be the only sure things we can expect in this life, but there are steps you can take to protect yourself and your assets if life throws you an unexpected curve. In addition to medical directives, there are several other important documents to help you prepare for the inevitable, and for life’s less pleasant surprises. Here is a checklist:
- Anyone - young or old - could be incapacitated by a serious accident or a devastating illness. A medical directive, which comprises two documents, is the best way to make sure your wishes are known and will be conveyed to caregivers and medical professionals. The Living Will component informs your doctors how you wish to be cared for in specific situations, and addresses end of life issues. For example, in the event you are terminally ill with no hope of recovery, you might want your doctors to know that you do not want to be kept alive via feeding tubes or by other artificial means. The second document, a medical care proxy, names a surrogate who is authorized to make decisions on your behalf, if you become unable to make them yourself. This provision kicks in only when you are totally unable to communicate, and it is crucial in long-term care situations (like the recent Schiavo case). The proxy will help to avoid disputes among family members who might hold different opinions on your wishes regarding long-term care issues. Have your legal advisor prepare these documents for you to review and sign. Some states require them to be notarized, and most require that a witness sign the document. In addition to filing a copy with your will and other key paperwork, it is a good idea to ask your doctor to keep a copy in your medical file.
- Unless you want the state to determine who gets your assets, make a will regardless of your marital status or your age. If you have one, review it periodically. If your family situation changes - divorce, deaths or births - review it to see if you want to change your beneficiaries or the division of your assets.
- Life insurance should be top of the list for any new, young married couple. A couple’s term-life policy should be sufficient to cover the cost of their mortgage, and it is a good idea to increase coverage as kids come along. Insurance experts recommend that individuals purchase a policy that will yield not less than 5 times their annual income. Consider coverage for a stay-at-home spouse or partner. Consider what it would cost to hire a housekeeper/nanny to cover the responsibilities they handle.
- Give consideration to supplementing your home and auto policy with an umbrella policy to provide added liability coverage. We live in litigious times. Your kid’s buddy may hurt himself playing Frisbee in your pool, or a deliveryman might stumble on an uneven step on your porch and fall. The umbrella policy is designed to protect your assets in the event you are sued. The amount of coverage for added liability should be determined by your net worth. Your financial advisors can help you determine the amount you need if this is appropriate for you. Make sure the coverage you purchase will cover you in situations where your existing policies don’t.