"Is there anything else I can do?" asked the doctor.
"No. Thank you, doctor," Steve replied softly.
Then he and Meg sat in silence, not knowing what to do or say next.
Preparing for 'life after you'
No moment will be etched more clearly in your mind than when you heard that you have a terminal condition. Life stops for a moment – and then starts back up again within a new reality.
Somewhere along the rollercoaster of emotions that mimic those of grief – Elisabeth Kubler-Ross's five stages of denial, anger, bargaining, depression and acceptance – it becomes vital for you to envision and prepare for 'life after you.' What does this mean for your loved ones: your spouse and your dependents, whether young or old? What has to happen to provide them with the most significant security and ease?
When your life going forward is filled with 'unknowns,' it becomes essential to create as many 'knowns' as possible for yourself and your spouse.
The range of relevant topics is broad and deep. Hopefully, the following summary will help organize your thoughts and structure your actions. Not all topics will pertain to you, but as you cross each one off as completed, there's a new sense of certainty – at least in one small part of your journey.
Legal documents
You may have already created all the wills, trusts, and other legal documents that support your wishes for your estate and your legacy. If any are missing, make it a priority to obtain them. If you have them, check to be sure they're up to date. Most of all, let your family know where those documents are.
Powers of attorney and health care proxies
Prepare for a day when you may no longer be able to make decisions about your finances and your health care by designating who can make those decisions for you. You may want to talk to a lawyer about setting up the powers of attorney that are appropriate for the size and complexity of your finances. Creating your advance directives for health care may not require a lawyer, as most states provide their approved forms online along with instructions.
Life insurance and beneficiary designations
If you have life insurance policies in place, check and update any beneficiary designations to ensure that you are allocating proceeds to those you most want to support. Policies that have been owned for many years may not reflect your wishes today. If you don't have policies, it is unlikely you would be eligible for any new ones, but review other contracts or memberships that might include life insurance coverage.
Long-term care insurance
Long-term care can exhaust financial resources faster than you can imagine. If you have long-term care insurance, familiarize yourself with the details and limitations of the coverage so you are prepared to make the most of it over time. Today, some policies are hybrids of life insurance with long-term care and may offer benefits for terminal illnesses. If long-term care insurance is not available, but extensive paid care is likely, investigate all possible resources including the realities of Medicaid assistance and how it will affect the ones you leave behind. These are not easy conversations.
Health insurance coverage
Understand your health insurance coverage, particularly any additions or changes that will help cover medical expenses related to the illness. Depending on the source of your insurance – through your employer, for example – check on how that will change for your loved ones in your absence. Consider exploring possibilities for their future coverage, if needed.
Financial accounts and access
Organize all information on bank accounts, investment accounts and retirement accounts. Be sure your partner's name is on any account that will facilitate access as your illness progresses and after you die. Although much of this information may be consolidated with your trusted financial advisor, if you have one, ready access without having to call for it can be invaluable.
Income sources
Explore all income sources, including current earnings from employment or business, Social Security, pensions and other benefits. Quantify how those numbers will change after your death to assess your partner's ongoing financial stability.
Social Security benefits
Social Security is an asset that is often underestimated. The size of lifelong checks is affected materially by when you or your partner claims: the later, the better. Also important is the interplay between your partner's retirement benefit, your retirement benefit and the available survivor benefit. After you die, your partner will only be eligible to receive the largest amount between their retirement benefit and the survivor benefit (which is equal to the last amount you received).
Debts and liabilities
Go over any outstanding debts or liabilities and create a plan for how they will be handled. Will they be paid off with existing assets or insurance proceeds? Will their repayment have to come out of future income? How can the burden be minimized?
Emergency fund and short-term needs
Traditional financial planning calls for having an emergency fund available when life throws a curve ball. This curve ball is no different, but it might require more significant amounts than usual to cover immediate expenses and short-term needs. This transition period is not the time to worry about what investment account to tap to cover a surprise expense.
End-of-life expenses
Try to project end-of-life expenses, including potential health care, hospice or palliative care costs. Benefits can be available from employers, the Veterans Benefits Administration, Medicare, Medicaid and private insurance, among others. Your financial, tax and legal advisors may be able to help with resources and strategies.
Funeral and burial plans
One of the hardest conversations, if it hasn't taken place already, is the one about funeral and burial arrangements. To the extent possible, consider pre-arrangements for two reasons: they quantify the financial burden as you make financial plans, and they alleviate the need to think about them during the most challenging time.
Estate and inheritance taxes
Understand how estate and inheritance taxes may affect what you leave for your loved ones. While taxes are typically considered during estate planning, a tax professional may still be able to develop a strategy that lessens the impact on your heirs.
Other tax implications
There are potential tax implications for medical expenses, withdrawals from tax-advantaged retirement accounts and other financial decisions triggered by illness. You may want to consult a tax professional for guidance to minimize the tax burden.
Financial advisors
If you already have a trusted financial advisor with whom both you and your partner are comfortable, bring them into the conversation early regarding the financial aspects of this life curve ball. First, they can provide advice on managing assets and investments to reflect your needs during this stressful time. They can also help with the overall financial strategy to provide ongoing financial stability and continuity for your partner when you are gone.
With all the medical, emotional and relationship priorities swirling at this time, these are not easy conversations to have. However, they are the greatest gift you can give to your loved ones – the knowledge that you have advanced their financial preparedness the best you could.
Open communication and early planning can help ease the concerns of your loved ones and caregivers, which allows their focus to remain on precious time with you. Don't hesitate to ask for help from your professional support team where needed.
At WH Cornerstone, we work with clients every day, applying our Curve Ball Life Planning™ program to prepare for unthinkable events before one happens. Well, one just did. If you haven't already prepared for this eventuality, we're here to apply everything we've learned to get you prepared financially – quickly and effectively. Our goal is to let you be able to focus on your shared time with the ones you love.