health care

Health Care Decisions Factor into Comprehensive Wealth Planning

What you need to know about advanced medical directives, guardianships and durable powers of attorney

Key Takeaways:

  • Age, accidents or illness can prevent even the most well-organized and financially astute people from handling their own finances or health care decisions.

  • Thanks to advances in medicine, health and longevity, many people are living 30 to 40 years after their prime wealth accumulation years have ended.

  • Advanced medical directives deal with personal care and medical issues, including surgery, placement, medication, assisted living, full skilled-care living and end-of-life decisions.

  • If you don’t have the necessary documents in place, unfortunately these decisions will have to be made under a court-supervised process. 

Many people are diligent about planning for and protecting themselves against personal, legal, tax and financial problems. But health care, or the ability to make important decisions about long-term care, often gets overlooked.

Life insurance statistics show that a 50-year-old now has at least a 50/50 chance of living to 110. That’s right a century, PLUS another decade!

With an average U.S. retirement age between ages 60 and 65, you could realistically expect to live for 30 to 40 years after your prime wealth accumulation years have ended. In estate planning, we often talk about preserving wealth and passing it on to the next generation. But given the demographics of aging, inflation, health care needs, etc., it is quite possible that your wealth will run out before you do.

That’s why it’s so critical to appropriate estate planning documents in place, including wills, trusts, appropriate beneficiary designations and designations of guardians.

Unfortunately, because of age, accident or illness, many people may face the prospect of being unable to take care of their own finances or to make their own health care decisions. Therefore, proper documents need to be put in place to allow someone else to make appropriate decisions on your behalf.

Long-term health care costs
Because of health and aging, everyone faces the prospect of financing long-term health care needs, including the possibility of assisted living and full skilled-care living. If these costs are not planned for, they can be financially devastating.

We can’t fight the aging process or prevent unexpected events that impact our quality of life. However, proper planning and documentation can go a long way toward creating peace of mind. It’s very comforting to know we have put in place appropriate planning to eliminate, to the extent possible, financial, legal, tax, health care and other problems that, one way or the other, are bound to occur during our lifetime.

Appropriate lifetime powers of attorney
Regardless of age, health, assets and income, everyone needs to have in place a well-drafted “financial durable power of attorney” and appropriate advanced medical directives.

An advanced health care (or medical) directive is a set of written instructions that people use to specify the actions they want to be taken for their health in the event they are no longer able to make their own decisions due to illness or incapacity. The instructions appoint someone (an “agent”) make such decisions on the person’s behalf.

Advanced medical directives normally include health care powers of attorney, living wills and more. If you are unable to attend to your financial, personal care, or health care matters because of age, accident or illness, no one can make these decisions for you unless the decision-making authority has been specifically designated in writing.

Financial durable powers of attorney concern assets, income, other financial matters and dealings with government agencies. Advanced medical directives deal with personal care and medical issues, including surgery, placement, medication, assisted living, full skilled-care living and end-of-life decisions. If you do not have these documents in place, unfortunately these decisions will have to be made under a court-supervised process known as a “guardian of the person” (for personal care and medical issue decisions) or a “guardian of the estate” (for financial matters). Guardianships are expensive, personally intrusive and perhaps the worst way to manage any of the decision-making processes.

The proceedings can be very traumatic and expensive. Guardianships of the estate or person are easy to avoid if the appropriate documents are put in place. A final word of caution: Be careful about using simple forms! Simple forms often ignore many of the decisions that will have to be made throughout the course of a lifetime; the decisions that may be critically important to the family need to be specifically addressed in the documents.

You have six major types of estate planning needs—health care is one and avoiding guardianships another. We’ll discuss the other four in a future article. You need to be aware of these issues and of the significant dangers caused by insufficient planning. Nobody enjoys discussing the possibility of one’s demise or deterioration. But, the sooner you do, the sooner you can get on with the business of enjoying all that life has to offer, especially with those closest to you.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail


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