Leaving a Legacy
- Late country legend Toby Keith, who died on February 5 at age 62 from a two-year battle with stomach cancer, has been making headlines after a news report was released about his financial affairs, which were reportedly finalized within months of the “Should Have Been a Cowboy” singer learning of his diagnosis.
- Although it’s a tough motion to go through while you are still living, the more specific you can be with your wishes, the easier it can be on your family. Therefore the earlier you address it, the less stressful it will be – particularly in the case of an advanced cancer diagnosis or a poor prognosis.
- Waiting until your disease and treatment have progressed can be taxing for your physical and mental energy, which, in turn, can make thinking about money even more undesirable.
- Experts say that even if you have a localized early diagnosis for which the survival statistics are very positive, it is still advisable to get your documents and planning in order, just to be safe.
Per In Touch Weekly, on February 20, Keith’s widow Tricia Covel – who was named as an heir along with the couple’s children – filed to be named administrator in an Oklahoma court. The family has sealed the majority of the paperwork for their safety and privacy, and in honor of the fallen father and husband, did not wish to disclose his fortune.
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When It Comes to Estate Planning, the Earlier the Better
The reality is, when people are grieving, emotions are understandably running high, so many families face conflict and financial challenges after a death.
Although it’s a tough motion to go through while you are still living, the more specific and thorough you can be with your wishes, the easier it can be on your family. Therefore the earlier you address it, the less stressful it will be – particularly in the case of an advanced cancer diagnosis or a poor prognosis. Waiting until your disease and treatment have progressed can be taxing for your physical and mental energy, which, in turn, can make thinking about money even more undesirable.
The financial challenge of cancer
Martin Shenkman, an estate planning attorney who specializes in financial planning for those who are chronically ill, wrote about financial planning after a cancer diagnosis in Forbes and said that in the wake of a cancer diagnosis, “financial planning may serve to exacerbate the insecurities and angst you are already experiencing from the medical challenges.”
RELATED: The Value of Using a Social Worker During Treatment
While this may be true, Shenkman added, “Deferring addressing these issues, however, may only serve to draw out the angst that a revised and viable financial plan might alleviate. Deferring addressing new cancer-triggered financial issues for too long might prove ruinous for some clients.”
In other words, putting the process of might result in more than just stress; it might negatively impact your finances.
Important Documents to Consider
In terms of estate planning in the wake of a cancer diagnosis, Shenkman’s advice to patients begins with getting the proper documents in order.
“Even if you have a localized early diagnosis for which the survival statistics are very positive, it is still advisable to proceed diligently to get the proper documents and planning in place,” he wrote.
RELATED: Guide to Financial Planning After a Cancer Diagnosis: Planning Is So Important For Peace of Mind
The documents to which he referred include:
- A Power of attorney (which authorizes someone of your choosing to make legal, tax, and financial decisions for you if the need arises)
- A health care proxy (which authorizes that person to make health-related decisions for you)
- A HIPAA release (which authorizes a person of your choosing to have access to your medical information, meaning they can speak to your doctor about the specifics of your condition without you
- A Physician Order for Life-Sustaining Treatment (POLST), which establishes your consent for life support if needed
- A beneficiary designation (a document that lays out the beneficiary of your life insurance and retirement assets such as IRAs
- Your living will (also known as advance health directive) which is a statement of your health care wishes
- Your will, which indicates the distribution of your assets
The list may seem overwhelming, but luckily, there are resources out there to help. The American Cancer Society, for instance, offers a free will-planning guide called Dear Loved Ones, and can also help you find more specific answers.
There are also pro bono foundations (such as the Foundation for Financial Planning) which can help provide services to those who need them without the high costs sometimes associated with estate attorneys.
Budgeting for Treatment Costs
Meanwhile, when it comes to paying for treatment, the bills can feel overwhelming. While there are resources that may help in some cases, Niv Persaud, managing director at Transition Planning & Guidance LLC in Atlanta, said there are some other steps those diagnosed with cancer may want to take, including:
- Calculate deductibles and estimated out-of-pocket costs for medical treatment.
- Total the amount you have available in your emergency reserve, health savings account, and flex spending account.
- Tighten your budget by reducing or eliminating non-essential expenses. Look at money spent on shopping, food delivery, entertainment, subscription services, etc.
- Review your payroll deductions and reduce or eliminate those that are optional where it makes sense. Some pre-tax deductions will have minimal impact on your take-home pay. Before making any changes, ask your HR contact to calculate the impact.
Should you ever borrow from a retirement plan to pay for treatment? Paul Karger, co-founder and managing partner of TwinFocus, a premier financial advisement firm with offices in Boston and London, previously told SurvivorNet that there are no hard and fast rules.
“Personally, I think when you’re faced with a life threatening illness, your health is number one,” he told SurvivorNet. “You do whatever you have to do.”
People struggling to pay for cancer treatment also have a few options to get help with medical bills. Many cancer centers have social workers or patient navigators on staff who can help patients navigate finances, work out payment plans, and look into whether they are eligible for any financial assistance programs.
Should I Make a Will?
No one likes to think about what will happen when they’re gone, but a will, which is a legal document that outlines how you want your assets distributed and affairs managed after you die, can save your loved ones time and money and make sure that your wishes are honored. When facing a diagnosis, Karger says there are three important designations to make.
Personal Representative/Guardian
This involves choosing someone who is capable of closing up your estate should you pass away. It could be a spouse or a child (or both), whichever person is more mature and responsible. Karger says in many cases people will name the attorney as the representative.
If a person has minor children, the other thing to think about is a guardian. Karger encourages people to inform/ask the people they’re designating as a guardian so there are no surprises.
Health Care Proxy
This is a person the hospital can call on to make decisions about your health care and treatment. Karger said this is often a spouse, adult child or good friend, but that it should ideally be someone that's in close proximity to where you live.
Durable Power of Attorney
You want to choose someone who can make financial decisions on your behalf should you become incapacitated. It should be someone who is financially savvy and may not be the same as your personal representative or healthcare proxy.
Beyond a Will, Consider a Trust
Beyond a will, if you have more than average assets, such as retirement accounts, property and other investments, you may want to establish a revocable trust.
Karger said this is a more involved document than a will. You can change the terms of it while you’re alive, but upon a person’s passing it becomes irrevocable, meaning it can’t be changed. Unlike a will, a trust is a way to avoid probate court and assets are immediately transferred to those whom you name. Note, however, that some of the rules regarding trusts vary by state.
“The big thing is thinking about who you want to represent you in these various capacities,” Karger said. “And the beauty of all these estate planning documents is that they’re all revocable, so you can change them anytime.”
“The important thing is to get something down on paper. You can always change it.”
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