You cannot afford to be passive when your spouse has a terminal illness.
The news was not what you wanted.
You had hoped for recovery and for a definitive treatment plan.
Instead, the prognosis is poor.
Your spouse is dying of a terminal illness.
According to a recent Wealth Advisor article titled “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now,” not taking appropriate action now can lead to complications and financial loss after the death of your spouse.
What can you do?
The answer is time dependent.
And time is of the essence.
How long your spouse is expected to live with the terminal illness and the location of treatment can limit the estate planning changes you can make.
You may not be able to do everything, but you can focus on these five things.
A Fiduciary Review.
The executor and trustee for the estate of your spouse will be responsible for either probating the estate if a will-based estate plan or administering assets outside of probate if a revocable living trust-based estate plan.
Both of these roles come with a fiduciary duty.
What does this mean?
This individual (or institution) has a legal responsibility to act for the benefit of the beneficiaries.
Review these designations in your estate plan to ensure that they still reflect your wishes.
If individuals, are they capable and trustworthy, or “doing a little time” for embezzlement?
You also may want to review the agents named in any general durable power of attorney or advance health care directive as you navigate the terminal illness of your spouse.
An Asset Analysis.
Your assets will look different when your spouse dies.
Update the list of the assets you own and how they are held.
If assets are jointly owned or designate you as the primary beneficiary (think life insurance and retirement funds) will transfer immediately to you when your spouse dies.
If assets are held separately, the assets belonging only to your spouse (with no designated beneficiary) will be subject to probate.
If your spouse is terminally ill, but you do have the time, update the estate plan to include and fund a trust will be helpful if you need timely access to these assets.
A Trust Assessment.
A trust allows greater control over the distribution of assets.
Any assets held in the trust are governed my the trust document.
Updating terms of the trust and making sure the trust is funded should be prioritized.
If your spouse dies of a terminal illness before creating an estate plan, your loved one will die intestate.
What does this mean?
The estate of your spouse will pass through probate and be distributed according to the laws of the state.
If your spouse wants to provide direction to the probate courts regarding asset distribution, creating a legally valid last will and testament is essential.
If a last will has been created, review it to ensure it reflects current wishes.
Beneficiary Designation Check.
Certain assets are transferred on death using beneficiary designations.
Reviewing life insurance policies and retirement accounts protects these assets from heirs who are no longer the intended beneficiaries.
Navigating estate planning is especially challenging under the weight of a terminal illness.
An experienced estate planning attorney can provide support and direction in these challenging circumstances.
Reference: Wealth Advisor (Jan. 26, 2021) “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now”