Dear Liz: There is a lot of dysfunction and drama in my family so in my will, I’ve named a friend to be my executor. But I don’t think she’s the best person for my advance healthcare directive. She’s too nice and I think she would cave under pressure from my family. Can I choose someone else?
Answer: Absolutely, and often that’s the best choice.
Your executor is the person who will settle your estate after you die. You should pick someone you know to be trustworthy and diligent. The executor (or successor trustee, if you have a living trust) doesn’t need to be a financial expert, since they can use estate funds to pay for legal and tax help.
The person who makes healthcare decisions for you may need another set of skills. They may face considerable pressure from others, including family, friends or the medical establishment, so you’ll want someone who not only understands your wishes for end-of-life care but who will fight to carry them out.
Your advance care directive or living will is the document where you articulate your wishes for the care you do and don’t want at the end of your life. You’ll also need to create a medical power of attorney, which is where you name the person you want to speak for you if you become incapacitated. Even a detailed advance care directive can’t cover every circumstance, and the power of attorney will help ensure that your chosen person can advocate for you no matter what happens.
You’ll need one more document, which is a financial power of attorney. This names someone who can pay your bills and otherwise handle your finances if you become incapacitated. You can name your executor, the person you named for healthcare decisions or some other person to serve this role. Check with your financial institutions, since they may have their own documents they’ll want you to use.
If possible, you should name at least one backup for each position, since people may not be able to serve when the time comes. Also, your wishes or circumstances could change over time, so all these documents should be reviewed at least annually and updated as necessary.
Dear Liz: I work for a local government and am trying to decide when to retire. I will receive a pension and have put away as much money as I could afford in my 457 deferred compensation plan. I invested it in a Standard & Poor’s 500 index fund that has performed well and is now worth $1.3 million. I also have a non-sheltered brokerage account of seven figures and no debt. Last year, I contributed vacation time and money to maximize my 457 contribution of $46,000. This year (and next unless I retire), I am likewise maximizing my contribution and contributing $46,000 each year. But periodically our monthly expenditures have exceeded my monthly income after the contribution and I have had to dip into the brokerage account to make up the difference. Does that make financial sense to do if needed or should I consider scaling back my contribution?
