New opportunities exist when one spouse is dying

“God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.” ~ Reinhold Niebuhr, American theologian Life is a mix of things we can’t control and things we can. If we’re not paralyzed by the former, we can often maximize the latter. This is especially true with married couples when one is dying. Let me speak frankly. There can be tremendous financial and estate planning opportunities for a spouse when we know death is imminent for the other. Is this morbid? I would argue that it’s empowering. In our practice, we frequently assist families with changes that protect all or most of the assets if the surviving spouse should need longterm care, immediately or down the road, without purchasing expensive long-term care insurance. It tends to maximize the greatest desires of the dying spouse – desires to provide for their spouse and for children or grandchildren.

Couples typically engage in financial or estate planning when both spouses are reasonably healthy, with little or no idea how long either one will live. But when a spouse is told they are dying, the facts have changed. New opportunities frequently exist based on that knowledge. This is also a time people can make big mistakes. Doing things that seem to “make sense” but can have serious unintended consequences. So can doing nothing.

John and Betty have an estate of $800,000. It could just as easily be $80,000, or substantially more, and the same principles apply. John has received bad news from his doctors.

If the couple does nothing, and Betty needs long-term care later or is currently receiving care, a substantial portion of the estate that could have been preserved to enhance the life of Betty, and for heirs, will be exposed to long-term care costs for Betty. Proper planning could ensure the estate could be protected from Betty’s long-term care expenses while assuring she receives the best of care, often much better than she could have afforded without proper planning, and still leaving an estate for children or grandchildren. If the couple does the wrong planning, perhaps on their own, or at the behest of bad advice, substantial tax advantages could be lost. But that’s not the worst of it. If Betty needs long-term care, bad planning or self-acting mistakes could make it far harder for Betty to qualify for government benefits to pay for her longterm care that she might otherwise qualify for, especially if gifts were made to nonspouses, like children or grandchildren.

All too often, emotion and fears can limit us. Resisting those human tendencies can empower us, especially in this case because we know something about the future that most people don’t. And that foresight can be a gift. The question is whether we will squander it or make the most of it.

Ric Cochran works for SAFE Planning assisting families with long-term care planning. He can be reached at ric.cochran@gmail.com or at 318-869-3133.