When a Parent is Diagnosed with a Progressive Illness
Dear Linda,
My father was recently diagnosed with a serious progressive illness. After the initial shock, my siblings and I feel this is a good time to make sure his finances are in order, particularly with regards to estate planning, before he begins to experience cognitive decline. What steps do you suggest?
In my 20 years as a financial planner, I have seen this situation many times. It is extremely wise to be proactive. The goal is to document your parent’s wishes so they will be honored.
Have your parent meet with an estate planning attorney licensed in their state to create important documents.
An estate planning attorney specializes in making sure that a client's wishes, with regards to their finances, are met in the event of disability or death. You may offer to attend the meetings if that will be helpful for them. I called into my parent’s meeting at their request to help them take notes and confirm they asked all the pertinent questions. I also wanted to make sure I was crystal clear on their intentions given that I am listed as the Executor.
The attorney will prepare some, or all, of the following:
Living Will
This document names someone to act on their behalf if they can no longer make their own medical decisions.
Durable Power of Attorney Financial
This document names someone to manage their finances if they can no longer do it on their own due to a disability.
Will
This document outlines how they want to distribute their assets upon their death.
Living Trust
This is a separate legal entity that can ensure assets do not pass through probate.
Help your Parent Implement the Estate Planning Recommendations
Many people pay for an estate plan but do not implement, which makes it worthless. Here are the 3 main items to focus on:
Inventory Assets and Debts
You need a clear picture of everything they own and owe.
Review Titling
Make sure the assets are titled as recommended by the attorney
Confirm Beneficiaries are Correct
Have your parent pull up the beneficiary designations on all life insurance and retirement accounts to confirm the named beneficiaries are in-line with the attorney’s recommendations.
Estate Planning can be a Difficult and Emotional Process
Recognizing our own mortality is never easy. When I went through the process in my 30s, I found it upsetting and overwhelming. For some older adults, especially those facing a difficult diagnosis, it is natural for estate planning to bring up uncomfortable emotions.
That being said, it is a necessary step to ensure their wishes are being honored. Stay focused on that goal so you can shift to what matters most - spending time together.
Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout Virginia Beach, San Diego county, and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.
Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in Virginia Beach, San Diego, and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.