How to Make an Estate Plan When You Have a Terminal Illness
This page provides resources on estate planning for individuals with a terminal illness. On this page you will find an overview of the most important issues you need to address to make an estate plan. While each person's circumstances are different, a person diagnosed with a life-threatening condition may want to address the following estate planning issues first:
1. Children 2. Pets 3. Financial Decisions 4. Medical Decisions 5. Spouses and Partners 6. Memorial Preferences 7. Estate Plan Letters
Life Insurance and Viatical Settlements
If you have been diagnosed with a terminal illness, chronic disease or catastrophic condition, and need money to pay for medical treatment, long term care or other expenses, one option is to look at the value of any life insurance policies you own. You may be able to obtain money by selling your life insurance policy in a viatical settlement. Some life insurance policies also feature loan options, cash settlement options, and accelerated death benefits. See viatical settlements.
Reasons to Make a Will
If you were diagnosed with a terminal disease, you may be concerned with more important issues than making a will.
Nevertheless, if you have not made a basic will, there are several reasons to consider making one. Some of the reasons to make a will if you have a life-threatening illness include:1. To make provisions for minor
children or dependent adult children, including guardianship.2. To provide for a spouse or partner especially if he or she shares a house or real estate with you.3. To name an executor to settle your estate. Rather than leaving this decision to a court, you can make a will and name someone you trust to carry out the instructions set forth in your estate plan.4. To make charitable bequests as part of your legacy. If there is a cause that is important to you, leaving a bequest in your will allows you to support it.5. To leave specific items to people you want to inherit them. Making a will is a way to pass cherished possessions on to the people you choose as your beneficiaries.The best way to make a will and ensure it is valid is to have it prepared by an attorney. If you cannot hire an attorney, another option is to use
estate planning software. Estate planning software typically includes will forms, as well as forms to make other basic estate planning documents.
Providing for Pets in Your Estate Plan
Pets can be a great comfort to us when we are sick or disabled, but they are usually overlooked by people making an estate plan. Have you considered what will happen to your pets without you?Because what frequently happens to unwanted pets is so tragic, we offer a free estate planning guide for pet owners on Pennyborn.com. This guide explains the steps you can take to ensure your animal companions do not suffer if you can no longer care for them. To view the free guide, go to
Pet Owners Estate Planning Guide.
Things You Can Control About What Happens When You Die
When faced with a terminal illness, there are many things you cannot control. The sense of powerlessness and fear can be overwhelming. But there are many things you can control, including the legacy you leave behind and how your survivors are impacted. For a list of things you can control or influence, see things you can control about what happens when you die.
How to Plan Your Funeral
There are several reasons you may want to make your final arrangements in advance. The first is it allows you to state your Memorial Preferences about your final resting place. You may want to be buried near a loved one or want your ashes scattered in a place that is special to you.Another reason to exercise control over your funeral arrangements is cost. You may have an opinion on how much money should be spent, who should attend, what type of religious practices should be observed, etc. There are steps you can take to control how much is spent on your final arrangements, such as prepaying for your funeral and completing a last wishes planner.For a list of steps involved in leaving instructions for your own final arrangements, review our free
funeral planning guide.
Guardianship of Children
If you have minor children, naming a guardian may be the most important part of making an estate plan. Even if your children are older, you may want to ask someone to become more involved in their lives if you cannot be there. In addition to expressing your preferences on guardianship in your will, you can also write a type of estate plan letter known as a child guardian letter.
To learn more about how to write this type of letter and view a sample form, see
Planning for Incapacity
Anyone can become incapacitated or disabled at any time. If you are facing a terminal illness, it is even more likely you will need someone to pay your bills, arrange long term care, and handle other financial matters if you become incapacitated.You can use a financial power of attorney to give an agent authority to take care of these matters if you cannot. For information on how to make a power of attorney, go to
power of attorney forms.
Preferences on End of Life Care
Another essential step in estate planning for a terminal illness is communicating what type of life-sustaining medical treatment you want to receive. Your next of kin as well as your caregivers need to know your preferences on specific types of medical procedures that are sometimes a part of end of life care. See
Medical Decisions.The two documents you can execute to communicate your preferences on end of life care are a living will and a health care power of attorney. These documents are also sometimes referred to as
advance directives. These two estate planning documents are easy to complete and can help ensure your wishes are honored.
Estate Planning for Your Business
If you own a business and have a terminal illness, there are several extra estate planning documents you need to make, in addition to a will, health care directives, and a power of attorney. The type of documents you need depends on how your business is structured, whether there are any co-owners, your business succession plan, and what you want to happen to your ownership interest.
For an overview of how to make an estate plan if you own a business, see our
estate planning for small business section.
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