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If you have been diagnosed with a serious illness, it is likely that your priorities have shifted, including your financial priorities. There is a lot to think about, including how to protect your loved ones and how to ensure that you have good insurance coverage for ongoing care.
Take Stock
The first step should be to look at everything that you have and what you are likely to need. This means going over all assets and debts. This may be the right time to sell assets, and you may have more than you realize. For example, if you have a life insurance policy, you might be able to sell it through a viatical settlement. This is available for those who are terminally or chronically ill, and you can look over a guide that will help you consider whether selling your policy is right for you and your family as well as how you can plan for what is ahead.
Appoint an Agent or Trustee
You can designate a loved one to manage your financial affairs in case you become incapacitated. One way to do this is with a power of attorney. Another is with a trust. You could also add another person to your bank account and other assets. A financial planner or an attorney could help you understand your options. This can save your family an expensive and potentially stressful court process to appoint someone to manage your affairs if you are unable to.
Look into Resources
You might also want to find out what kind of resources could be available for you in the future even if you don’t need them now. For example, you may eventually need assistance with tasks around the home, or you could need a home health care aid to come by a few times a week. You should also look into what kind of financial resources you are eligible for. Your medical team or, if you have been hospitalized, your hospital might be able to put you in touch with a social worker who can connect you to some of these resources.
Changes in Goals
You may be looking at a significant shift in your financial goals depending on your prognosis, so your financial planning may need an overhaul. That might mean planning a big trip, making sure you have enough money for long term care or just shifting money around and taking more or fewer risks with how you manage it.
Make or Update Your Estate Plan
Every adult should have an estate plan, and it’s always a good idea to review it every few years to make sure it still reflects your wishes. In this situation, an attorney could help you create or revise your plan as needed. Remember to look not just at your will or trusts but at things such as beneficiary designations for your retirement plan, which people often forget about. Changes in family circumstances, your assets or tax laws might also mean that you need to revise your will and other documents.
Reviewed and edited by Albert Fang.
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Article Title: The Impact of a Serious Illness on Your Personal Finances
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