Keeping in Compliance when Terminating Employees

We know that no employer likes to terminate an employee; from the business standpoint- there’s an open position that we must re-hire and re-train, it can be taxing on the rest of the staff and difficult for managers to try to work in interviews and screening processes into their already jam packed schedules.  And then there’s the additional emotional tie as well- these folks maybe leaving unexpectedly or under strained situations, and there’s personal friendships have been forged and they’re now kind of dicey, so it can be very difficult. With so many regulations, PHI, and privacy concerns how in the world do you prepare for an employee termination way before it even becomes a necessary discussion?  What should the Employee Handbook include?  What documents do parting employees need to complete?  Are there entities that need notified when employees leave?