Make sure advance directives are in place, including a Living Will and A Health Care Power of Attorney, which are described in more detail in Important Legal and Financial Documents. Give copies to the key people involved in your friend’s life (with his or her permission.) You will want to make sure that your friend has a will and that you know its location.

Probate assets are assets that people hold in their own names at time of death. These assets pass on to heirs according to terms of a will, subject to court supervision.  

The probate process often entails delays and costs, but some estate planning strategies can be used to mitigate those drawbacks by passing assets to heirs outside of probate. These strategies include joint ownership, beneficiary designations and transfer on death designations. (Trusts can also be used for this purpose.)  

Nearly all financial institutions allow the account owner to indicate (designate) the person or persons to whom to transfer the asset upon the owner’s death. People can make such designations for retirement accounts like 401(k)s and IRAs, and for annuities and life insurance policies.  

All beneficiary designations need to be kept up to date. Failure to update beneficiary designations may result in life insurance, defined contribution accounts or Individual Retirement Account (IRA) balances getting paid to the wrong individual.

When they specify a beneficiary, the assets will pass to the beneficiary outside of probate. (Note that beneficiary designations take precedence over any provisions in a will.) Many people name primary and secondary beneficiaries, so that if the first beneficiary dies before the owner, there is no question about who the new owner will be.  

Along with the emotional toll, a funeral can exact a huge financial toll as well. In 2019, the average cost of a funeral was $9,000. For help planning and strategizing for this expense, read Transamerica’s article on average funeral costs and how to plan for them. According to the American Bar Association, reports consistently show that on average that families who plan in advance for funeral arrangements, spend less than families that wait until the need arises. You can pre-plan with or without pre-paying. If an application for SSI or Medicaid is likely, ask a consumer advocate about the options for pre-paying funeral expenses before applying.  The rules on this vary from state to state, but most states do not count a qualified pre-paid funeral as an asset for Medicaid or SSI.

Palliative care and hospice also provide options for end-of-life care. Palliative care addresses the needs of patients who have chronic and/or life-threatening illnesses but are not likely to die soon. It is a medical specialty that enhances the individual’s overall comfort and quality of life by providing a wide range of services.  

Hospice is a holistic approach to caring for people who are terminally ill. It involves a team of trained professionals, available 24 hours a day, who provide medical attention, pain management, and emotional and spiritual support tailored to an individual’s needs and wishes. Both in home, and inpatient hospice care is available in most communities, allowing the choice of the best care option for the person. Medicare, Medicaid, and most private insurance cover the costs of palliative care and hospice care. It is often helpful to ask health care providers if palliative or hospice care is appropriate (many are reluctant to suggest these care options.)

For taxable accounts held at brokerage firms, the owner of the assets may want to have the brokerage set up a transfer on death (TOD) provision. Some bank accounts use TODs, too. A TOD acts like a beneficiary designation, so the assets pass directly, outside of probate.

Business ownership is another area for special consideration. The owner will want to plan carefully who will run the business upon the owner’s death. Specialized life insurance may need to be factored into the transition, so that ownership will transfer with minimal disruption. The assistance of a good attorney can be important to the outcome.