Living with a terminal illness is traumatic for any individual and family involved. Second to the emotional suffering is the financial situation you may find yourself in. You have to get your finances in order to ensure all your affairs are settled before you move into the next world.
We’re going to make that a tad easier by going through a simple financial checklist with you below. Make sure you’ve considered all these aspects in the wake of your terminal illness diagnosis.
End of life insurance will cover (burial insurance) the costs of your burial usually even if you have a terminal illness. In some cases, this will also be comprehensive funeral insurance, so everything related to the funeral will be covered. It isn’t costly to take out and it lasts for your entire life.
You can get burial insurance even if you’re terminally ill, so don’t put it off.
You can pass your retirement account to your spouse, or anyone you like. The 401k doesn’t evaporate should you die before a certain age. When you’re terminally ill, liquidity is absolutely crucial. You can withdraw from your 401k early without receiving the 10% early withdrawal penalty if you’re found to be terminally ill.
Do remember that you will still have to pay tax on this income.
Savings accounts are simple to handle. Your first task is to determine who you’re going to leave your savings accounts to, assuming you don’t intend on using them to supplement your lifestyle until the end comes.
You may want to consider using your savings to invest in some potential short-term income schemes. If you do intend on using your savings, we recommend speaking to a financial adviser to get some expert advice. You don’t want to make the mistake of making the wrong investment because you won’t be able to get that money back.
Your Last Will and Testament
This can be the hardest part of all. You’re coming to terms with the fact you’re going to die. You shouldn’t put this off because dying without a last will and testament in place is equivalent to financial suicide, as well as doing your loved ones a disservice.
Get it done as soon as possible.
Make it clear who gets what. In most cases, this will be your significant other. But the chances are you will want to give little aspects of your estate to other relatives too.
Power of Attorney
You may be wondering why this is on a financial checklist. The power of attorney determines what happens to your money should you become unable to actually decide what to do with it. This should go to the person you feel most qualified to deal with your finances fairly.
If you don’t have this in place, it can cause chaos. Many families haven’t set this up and it’s led to their money been wasted.
Have You Settled Your Debts?
It’s not uncommon for creditors to go after relatives after a person has died. This is perfectly legal and it can cause a lot of heartache, as well as acting as a nasty surprise. Make sure you have processes in place to settle your debts before you should pass away.
This is simple enough. Gather together all your debts and mark out how you’re going to pay them. If you only have a few months to live, it may be worth simply paying them off in one lump sum.
Finances don’t have to be difficult to get a handle on during your final days. They simply require some forethought on your part. Don’t leave it until the last minute. Sort out your finances today!