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The doctor says you're dying: 5 smart money moves

No one wants to think about money when they're dying, but making some wise financial decisions at the end of your life can be a final gift to your loved ones.

By MSN Money Partner Jan 3, 2014 3:29PM

This post comes from Maryalene LaPonsie at partner site Money Talks News.

Money Talks News on MSN MoneyMy husband was only 36 when we sat in the exam room and received the bad news we already knew was coming. The cancerous tumor in his esophagus had returned, and it would kill him.

Wheelchair © Image Source/Getty Images"We can buy you a little more time, but that's the best we can do. I'm sorry," were the exact words from the oncologist.

If you're reading this with interest, chances are you or someone you know may be grappling with a terminal diagnosis.

First, I offer you my deepest sympathies.

Second, I offer you some practical advice for dealing with the money side of death. These suggestions are based not only on my experience but also on those of other widows, widowers and grieving family members who have shared their insight with me.

However, since all situations are unique, please check with a financial professional or attorney to answer any questions related to your specific circumstances.

And of course, this isn't a comprehensive list. It's difficult to give such an immense subject proper treatment in one article. However, it's my hope you will find these suggestions helpful as you work through the process of preparing for death.

1. Make a will and check account ownerships

Assuming you or your loved one is still able to make legal decisions, now is the time to make a will and assign a power of attorney if you haven't already. Even if you're married, don’t assume a will is not needed. Depending on your state laws, not all property may be automatically transferred to a spouse, particularly if adult children or a previous spouse are involved.

If you don't think you can afford an attorney for a will, see Money Talks News money expert Stacy Johnson's advice on "How Do I Get a Will on the Cheap?"

In my case, after consulting with an attorney, we were informed that no formal will was necessary. I was my husband's only spouse and all of our children are minors.

Still, I wish we'd paid more attention to account details. For example, our mobile phone account was listed in his name only, which added extra hoops when it came time for me to take over after his death last May.

2. Double-check your beneficiaries

For one heart-pounding moment, I thought my husband had failed to name a beneficiary for his retirement account, which would have meant that money was left in limbo at a time when our family needed extra cash.

Make sure your accounts get passed on to the right people by reviewing beneficiaries for all your assets.

  • Life insurance.
  • Annuities.
  • Investment accounts, including 529 college funds.
  • Retirement funds such as 401k's and IRAs.
  • Savings and checking accounts.
  • Certificates of deposit.

3. Look for sources of cash

A terminal illness often means less income and more medical expenses. To keep the bills paid, look for ways to tap into extra cash.

Our family's lifesaver was a living benefit from my husband's workplace life insurance policy. We were able to receive 50 percent of his death benefit upfront, and that money not only kept the mortgage current but also gave us a cushion allowing us to be extra generous at Christmastime and take a final family vacation.

If you don't have a life insurance policy with a living benefit option, you may want to consider selling a second vehicle or large assets that no longer make sense for your family. In our case, we sold my husband's work truck, motorcycle and many of his carpentry tools for extra cash. However, you or your loved one might have a boat, RV or other expensive item no one else in the family will use. Consider selling those items now rather than later.

Finally, if you are single, you may want to see about tapping into your retirement accounts. However, if you are married or have children, you may want to try to preserve that money for them and only use it as a last resort.

4. Apply for Social Security disability but be prepared to fill the gap

Once you or your loved one stops working, you can apply for Social Security disability benefits.

My husband's diagnosis of esophageal cancer meant his application was fast-tracked for approval. What we didn't realize was that immediate approval didn't necessarily mean immediate money. As we discovered, there is a five-month waiting period from the date of the disability before benefits can begin. In addition, the date of disability is considered the day you stopped working, not the day you were diagnosed.

If your life expectancy is less than five months, it still makes sense to apply for disability if you have children or a spouse. Having an application already submitted and/or approved can speed up the process of receiving survivor benefits.

5. Be smart about spending

I must say that I have come to despise Tim McGraw's song "Live Like You Were Dying." That's largely because, in my experience, people who are dying aren't going to go rocky mountain climbing or skydiving or bull riding. The harsh reality is dying leaves many people too exhausted to walk up the stairs, let alone up a mountain.

Why do I share this depressing fact? Because I want to encourage you to be smart about how you spend your money during these last weeks, months or even years.

You may feel desperate to take that bucket-list trip to Hawaii or a world cruise, but be realistic about whether you are up for the adventure. At the very least, consider buying travel insurance in case you need to cancel.

For our last hurrah, we took the kids on a train trip to Chicago for a weekend. It was a low-key affair that involved a few trips to museums and lots of downtime in the hotel room. It was also timed to coincide with when my husband was off chemo and the side effects were out of his system. To both our surprise, the vacation still wiped him out and if we had planned anything longer, we certainly would have had to go home earlier.

Death makes us want to squeeze in a lot of living in a short period of time, but long after you are gone, your family will be left to pay the bills. So go ahead and splurge as you're able but be sure you aren't taking your family into debt and that you're leaving enough behind to, at the very least, pay for your final expenses.

When you or the one you love is dying, you don't want money to be the most important consideration. However, it most certainly can't be ignored either. Hold your loved ones close and tell them how much you care. Then, follow up by making some smart money decisions that leave them with one less thing to worry about after you depart this world.

More on Money Talks News:

Jan 3, 2014 5:13PM
Little by little, take as much money out of the bank as possible and give it to family members you can trust. Also, sign your house/property over to heirs/family; otherwise, the government is going to take a big bite out of your wallet.
Jan 3, 2014 6:13PM

Life is 100% fatal and no one knows when it will end for them.  One should not wait until you are sure the end is near to prepare for it, because it may come suddenly without warning.  If there is something that needs to be done before you die, do it now.  If you think there may be something to check on, do it now.  You may not have tomorrow or even this afternoon to do it.


Jan 3, 2014 6:29PM
I think one of the smartest things you can do ahead of time is set up a trust and put your assets in it.  If you only have a will your house will likely have to go through probate court, which takes time and will assess a 15% probate tax on the FAIR MARKET VALUE of the house, not the amount of equity you have in it.  A trust can cost as little as $300. 
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