Filed under: Estate PlanningBy Maryalene LaPonsie
My husband was only 36 when we sat in the exam room and received the bad news we already knew was coming. The cancerous tumor in his esophagus had returned, and it would kill him. "We can buy you a little more time, but that's the best we can do. I'm sorry," were the exact words from the oncologist.
If you're reading this with interest, chances are you or someone you know may be grappling with a terminal diagnosis. First, I offer you my deepest sympathies. Second, I offer you some practical advice for dealing with the money side of death. These suggestions are based not only on my experience but also on those of other widows, widowers and grieving family members who have shared their insight with me. However, since all situations are unique, please check with a financial professional or attorney to answer any questions related to your specific circumstances.
And of course, this isn't a comprehensive list. It's difficult to give such an immense subject proper treatment in one article. However, it's my hope you will find these suggestions helpful as you work through the process of preparing for death.
1. Make a Will and Check Account Ownerships
Assuming you or your loved one is still able to make legal decisions, now is the time to make a will and assign a power of attorney if you haven't already. Even if you're married, don't assume a will is not needed. Depending on your state laws, not all property may be automatically transferred to a spouse, particularly if adult children or a previous spouse are involved.
If you don't think you can afford an attorney for a will, see Money Talks News money expert Stacy Johnson's advice on "How Do I Get a Will on the Cheap?"
In my case, after consulting with an attorney, we were informed that no formal will was necessary. I was my husband's only spouse and all of our children are minors. Still, I wish we'd paid more attention to account details. For example, our mobile phone account was listed in his name only, which added extra hoops when it came time for me to take over after his death last May.
2. Double-Check your Beneficiaries
For one heart-pounding moment, I thought my husband had failed to name a beneficiary for his retirement account, which would have meant that money was left in limbo at a time when our family needed extra cash. Make sure your accounts get passed on to the right people by reviewing beneficiaries for all your assets.
- Life insurance.
- Investment accounts, including 529 college funds.
- Retirement funds such as 401(k)'s and IRAs.
- Savings and checking accounts.
- Certificates of deposit.
A terminal illness often means less income and more medical expenses. To keep the bills paid, look for ways to tap into extra cash.
Our family's lifesaver was a living benefit from my husband's workplace life insurance policy. We were able to receive 50 percent of his death benefit upfront, and that money not only kept the mortgage current but also gave us a cushion allowing us to be extra generous at Christmastime and take a final family vacation.
If you don't have a life insurance policy with a living benefit option, you may want to consider selling a second vehicle or large assets that no longer make sense for your family. In our case, we sold my husband's work truck, motorcycle and many of his carpentry tools for extra cash. However, you or your loved one might have a boat, RV or other expensive item no one else in the family will use. Consider selling those items now rather than later.
Finally, if you are single, you may want to see about tapping into your retirement accounts. However, if you are married or have children, you may want to try to preserve that money for them and only use it as a last resort.
4. Apply for Social Security Disability but Be Prepared to Fill the Gap
Once you or your loved one stops working, you can apply for Social Security disability benefits. My husband's diagnosis of esophageal cancer meant his application was fast-tracked for approval. What we didn't realize was that immediate approval didn't necessarily mean immediate money. As we discovered, there is a five-month waiting period from the date of the disability before benefits can begin. In addition, the date of disability is considered the day you stopped working, not the day you were diagnosed.
If your life expectancy is less than five months, it still makes sense to apply for disability if you have children or a spouse. Having an application already submitted and/or approved can speed up the process of receiving survivor benefits.
5. Be Smart About Spending
I must say that I have come to despise Tim McGraw's song "Live Like You Were Dying." That's largely because, in my experience, people who are dying aren't going to go rocky mountain climbing or skydiving or bull riding. The harsh reality is dying leaves many people too exhausted to walk up the stairs, let alone up a mountain.
Why do I share this depressing fact? Because I want to encourage you to be smart about how you spend your money during these last weeks, months or even years. You may feel desperate to take that bucket-list trip to Hawaii or a world cruise, but be realistic about whether you are up for the adventure. At the very least, consider buying travel insurance in case you need to cancel.
Death makes us want to squeeze in a lot of living in a short period, but long after you are gone, your family will be left to pay the bills.
Death makes us want to squeeze in a lot of living in a short period, but long after you are gone, your family will be left to pay the bills. So go ahead and splurge as you're able but be sure you aren't taking your family into debt and that you're leaving enough behind to, at the very least, pay for your final expenses.
When you or the one you love is dying, you don't want money to be the most important consideration. However, it most certainly can't be ignored either. Hold your loved ones close and tell them how much you care. Then, follow up by making some smart money decisions that leave them with one less thing to worry about after you depart this world.
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