Receiving an unexpected medical diagnosis, whether for yourself or a loved one, is an emotional and overwhelming event. Amid the focus on treatment and well-being, one critical aspect of life can add to the distress: estate planning. Taking the time to review and update your estate plan is essential to ensure your wishes are followed and to ease the burden on your family during an already difficult time.
Here is a breakdown of the key areas you should address immediately after a significant medical diagnosis.
Healthcare Documents: Ensuring Your Wishes Are Known
These documents ensure that your personal medical preferences are respected, even if you are unable to communicate them.
Living Will / Advance Directive
A Living Will, also known as an Advance Medical Directive, is a crucial document that clearly outlines your medical care wishes. It ensures your medical team and family know the types of care you want to receive or refuse if you become incapacitated. This commonly covers end-of-life care, but can also include preferences for specific medical treatments. Within this document, you can formally include Do Not Resuscitate (DNR) and Do Not Intubate (DNI) orders, if that is your choice.
Healthcare Power of Attorney (POA)
Beyond the Living Will, you need a Healthcare Power of Attorney. This document designates a person of your choice (known as your “agent” or “surrogate”) to act on your behalf and make medical decisions for you if you are unable to do so yourself. This agent’s authority is often broader than the specific instructions in a Living Will, allowing them to navigate complex medical situations.
HIPAA Authorization Form
The Health Insurance Portability and Accountability Act (HIPAA) protects your medical privacy. A signed HIPAA Authorization Form is necessary to grant specific individuals (like your spouse, children, or chosen agent) access to your medical information and records. If you do not have this document signed, healthcare providers may be legally prevented from discussing your condition with your loved ones.
Financial and Asset Planning: Protecting Your Resources
Addressing your financial documents ensures your assets are managed and distributed according to your wishes, minimizing potential legal challenges.
Durable Power of Attorney for Finances
Similar to the Healthcare POA, a Durable Power of Attorney for Finances appoints an agent to manage your financial affairs (paying bills, accessing bank accounts, managing investments) if you become incapacitated. “Durable” means the document remains effective even after you lose capacity. This is vital for maintaining your household and financial obligations during illness.
Review/Create a Last Will and Testament
A Last Will and Testament names an executor to wrap up your estate, specifies who will inherit your personal property, and, if you have minor children, names a guardian for them. A diagnosis is a sharp reminder to ensure your Will is up-to-date, legally valid, and accurately reflects your current distribution wishes.
Revocable Living Trust
A Revocable Living Trust can be an invaluable tool. The assets placed in the trust avoid the probate process, meaning they can be transferred quickly and privately to your beneficiaries. A Trust can also include provisions for managing your assets during your lifetime should you become incapacitated, potentially streamlining the process even more than a financial POA.
Update Beneficiary Designations
Many assets, such as retirement accounts, life insurance policies, and bank accounts, pass directly to named beneficiaries, regardless of what your Will says. You must manually review and update these Beneficiary Designation Forms to ensure they align with your current wishes.
If you have any questions about how these tools could help, or want to have a complimentary consultation to create a financial plan. Please don’t hesitate to reach out.
