Unexpected Health Issue – Do You Have Your Affairs In Order?

Hi there, Bridget Mackay here. I’m a attorney in Petaluma, California, and I practice in the area of estate planning, trusts, wills, probate, and trust administrations and elder law.

Today, my video blog today is about what do you do when you get bad news, whether it is you or a loved one, with cancer so prevalent in our society today, there may come a time when you or your loved one get a life-threatening diagnosis that has some sort of timeline attached to it. These situations are almost always unexpected and happen when you are making plans for your life in other ways. Besides reeling with the diagnosis that has been received, the deluge of health information around it, and the outpour of support from your family and friends, what do you do to get your affairs in order, so to speak?

Well you either dust off an estate plan that may have done years ago, or if you haven’t done anything, you take a look at what you have, and you start from scratch. Here are some six things that you can keep in mind when doing that.

The first is, make sure your healthcare directive is up-to-date and include what we call a HIPAA release, which would allow your agent or your healthcare agent to get your healthcare records and information and make decisions based on those.

Second, look at your will or your trust, or create a will or a trust, and make changes to them if needed.

Three, make sure your beneficiary designations on your IRAs, your life insurance policies, your annuities, anything that carries a beneficiary designation are up-to-date. Like I said, your life insurance, retirement plans, annuities, and accounts that are payable on death when you do that.

Number four, sell any loss assets in order to harvest income tax losses eventually. So if you have stocks out there that are at a loss or even real property, which is rare, that is a loss and not a capital gain, go ahead and sell it because you can reap the benefits of an income tax later.

Fifth, don’t sell assets that haven’t gained, so the opposite of number four, because your beneficiaries or your loved one’s beneficiaries at their death will get what’s called a step up in capital gains basis.

Finally, accelerate any charitable requests you may have. This is beneficial to you or your loved ones estate because your income tax deductions are greater, and it removes those assets from your taxable estate at your death or your loved one’s death.

Not easy things to talk about, but if you really want to do something loving for your family, it would be in a situation like that to get your affairs in order, and always consult a reputable estate planning attorney when you do so.

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