Bad News Received: What Do You Do Next?

Aug 22, 2018 | Estate Planning Attorney, Life Insurance, Retirement, Transfers on Death, Will

Pad of Paper & Pen on a wood background.

A diagnosis of a fatal illness leaves everyone in shock.  However, when reality sets in, other considerations need to be handled.

If the worst news is received on the medical front, emotional and medical resources are necessary.  However, legal considerations are also needed to handle end-of-life planning, according to CNBC in “When end-of-life planning is suddenly a lot closer than you thought.”

A good place to begin is to start assembling all your financial information in one place. An old-school, loose-leaf binder may be easier for your family, depending on their comfort level with technology. If your family is accustomed to online portals where information is stored, consider the emotional state of shock they will be in. Make it as easy and accessible as possible for you and them.

The information should include your Social Security benefits and pension information. There may be survivor benefits that your family will need to know about.

Include the prior year’s tax returns and a note, as to where your other tax returns can be found.

If you don’t have a will, power of attorney, healthcare directive or any estate planning legal documents in place, it is now the time to make an appointment with an estate planning attorney.

Another task will be to designate beneficiaries for any financial accounts and insurance policies. Depending on your brokerage house, you may be able to attach a transfer-on-death instruction to your non-retirement accounts.

You can do the same thing with real estate in 27 states. An estate planning attorney will know if this is applicable to your state.

Next, make a list of your liabilities. It should include your mortgage, car loans and credit card debt.

Create a contact list for your family that includes your estate planning attorney, CPA, financial advisor and insurance agent.

Should you pay off your mortgage? This might not always be the best move. Consider the funds available, your tax bracket and the current mortgage. Do you want a family member to be able to live in the house? Your estate planning attorney will be able to run through different scenarios and strategies.

Write a legacy letter. This is not a legal document but a letter that will express your intentions for your will and your wishes for personal property.

Reference: CNBC (July 18, 2018) “When end-of-life planning is suddenly a lot closer than you thought.”