by Archie M. Richards, Jr., CFP^®
April 15, 2002

When you're dying . . . well, sorry; we all have to go eventually . . . do you want medical personnel to use heroic efforts to keep you alive artificially, probably in pain? If not, check out www.estateplanforyou.com to find an estate planning attorney in your area. Have the specialist prepare the following medical documents. (The names differ in some states):

Living Will: This specifies the degree of care you want administered to keep you alive. It might say that you want to be kept as free of pain as possible. Otherwise, medical personnel are to let nature take its course.

Health Care Proxy: This document comes into play if you're unable to decide vital matters for yourself. You name someone you trust to decide how much medical care is desirable to keep you alive.

Do Not Resuscitate: The "DNR" says that if you have collapsed and seem terminal, do not revive.

Let's say that, at an advanced age, you collapse at home. Your daughter recognizes sadly that you're at death's door. To make you as comfortable as possible, she calls for an ambulance. When the medical personnel arrive, she explains that you've always wanted to die at home and that if you seemed terminal, you were not to be revived.

One of the emergency personnel asks for the supporting document.

"It's in the safe deposit box," says your daughter. "I'll get it right away."

"Sorry ma'am. Without that document, the law requires us to act immediately."

The medical team succeeds in keeping you alive and removes you to the hospital. A few days later, you die in great discomfort, your body stuck with needles and tubes. It's just what you did not want.

To prevent this, do not place your medical documents in a safe deposit box. Store them at home, preferably in a fireproof box. (Sentry boxes work well; they're available at Wal-Mart.) You might keep another set in your car. Inform your family members where they are.

These medical documents mean nothing until they're needed. But they then become matters of life and death.

If you're living with someone to whom you're not married, difficult problems can arise, as follows:

• If one of the partners dies, the survivor is unlikely to receive pension benefits from the deceased partner's employer.

• The survivor will not receive pension benefits from Social Security or the military.

• Transfers of property between the two partners, over and above $1,000,000, are subject to gift and estate taxes. The marital deduction, which avoids the tax for married partners, does not apply.

• If one of the partners dies without a valid will or trust, the other could be left penniless. In the absence of a will, the state's Law of Intestacy specifies who inherits. Those laws take no account of the needs of an unmarried partner.

See an estate planning specialist and create documents that provide for the inheritances you both desire.

Let's say you name your spouse as beneficiary of your IRA. If you die first, the IRA would be inherited by your spouse.

Now assume that you divorce and remarry, but fail to change the IRA's beneficiary. At your death, the IRA goes to your former spouse. Your will has no effect on this inheritance. Because of your failure to change the IRA's beneficiary, the other members of your family and your ex-spouse could be locked in expensive lawsuits and emotional turmoil for years.

Your retirement plans, life insurance policies, and the properties you own jointly all pass upon your death to the person(s) named in the applicable documents. Your will has no effect on these transfers.

Write a will, by all means. But also make sure that the individuals named in the documents are the ones you want to receive the properties upon your death.

Maggie, who's new to investing, asks whether she should attend a two-day investment seminar costing $3,000.

The cost is way too high, Maggie. Go to the library and explain your situation. The librarian will help you, I'm sure. Also, consult www.archierichards.com. Newspaper columns shown there can set you on the right investment path.