4 min read

Estate Planning Checklist When Managing a Terminal Illness

A family sitting on a leather couch smiling and hugging a young mom with a terminal illness.

After you or a loved one has been diagnosed with a terminal illness, you probably don’t want to spend any more time sitting in an estate planning advisor’s office than is absolutely necessary.  Everyone’s case is unique. How much estate planning you’ve already done and your family/financial circumstances will certainly affect what kinds of plans you need to make now. There are common estate planning steps you should take when you are managing a terminal illness. 

Collect all your “important paperwork.”

This includes any estate planning documents you have, along with insurance policies, investment records, deeds to any property you own, divorce/marriage/custody documents, etc. Basically, any paperwork you might need for estate planning purposes now or that your heirs might need to settle your estate later. (Ask your estate planning advisors to help you make a list of specific documents that you should gather if you’re worried about forgetting something.) 

If anything’s missing, it’s best to know that now so you can work on getting copies or replacements. Get all these documents organized in one place.

Review/create a health care proxy, personal directive, and power of attorney.

State laws vary around advance directives, but in Massachusetts, someone with a terminal illness will generally want to have two separate documents addressing healthcare decisions. A health care proxy is where you appoint a health care agent to make choices on your behalf, while a personal directive (aka living will) is where you write down anything you want or don’t want in terms of end-of-life care. 

You may already have these documents as part of your estate plan, or your healthcare team might have walked you through them after diagnosis. You might want to review end-of-life wishes with the people named in the health care proxy and other close loved ones so everyone’s prepared to honor those wishes. 

If you don’t already have a power of attorney, you may want to create that document now too, so you can grant the right people permission to make financial decisions.

Review/update your will and any trust documents.

Your advisor’s specific advice is essential when you’re getting your will in order and finalizing your plans for what to do with your assets. The decisions you make will have estate tax implications for the estate and heirs, but they’re also hugely personal and emotional decisions. 

You might want to create a trust to provide for minor children or other dependents or create a charitable trust to benefit an organization related to the terminal illness. You might want to start giving away property and assets to loved ones now. Or, you might want to hold onto all assets to ensure you can afford medical costs (and maybe that big trip you’ve always dreamed about), then use estate planning strategies to pass anything left on to your heirs. 

Review insurance policies and Social Security benefits.

Make sure you’re clear about exactly what health insurance, life insurance, and other policies say. There are a lot of ways that insurance and Social Security issues can affect you and your heirs, and you might need your advisors’ help to plan for them. 

For example, what if long-term care services that your health insurance doesn’t cover become necessary? If an employer’s health insurance policy currently covers your family, what are their options after your death? Does the life insurance policy include an accelerated death rider that lets you take out some money now? If so, is that something you want to do? What are the Social Security disability benefits available now, and if so, have you already applied? 

Think about funeral arrangements.

Many elect to pre-plan for their funeral expenses and other final expenses to make things a little easier for their loved ones. That might mean putting money into an account specifically earmarked for those costs or buying a prepaid plan from a funeral home. Or, you might plan on your heirs using life insurance to pay for final expenses. Some people experiencing a terminal illness may also want to create a document sharing funeral and burial instructions for their loved ones to honor. Make sure there are records of any payments or plans you’ve made so the people who will be organizing your services are clear about what to do.

Talk to loved ones about your place in their estate plans.

This one is not strictly necessary for your own planning purposes—but for peace of mind, you might want to suggest that loved ones update any of their own estate plans that name you. For example, if you’re named as a custody backup in a sibling’s will or as an agent in a friend’s health care proxy, they’ll want to appoint new people to those roles to protect themselves.

Create records of anything else loved ones need to know.

Estate planning with a terminal illness can be about more than just getting your legal documents in order. It’s an opportunity to share thoughts, wisdom, or other important information with the people you love. You might want to write out lists of tips and instructions for anyone inheriting your prized possessions or write out the history of any family heirlooms to go along with these treasures. Parents of young children may want to create extensive documentation for them/their caregivers. Or, you could write or record personal messages to be distributed to loved ones after death. Take whatever steps might give you some sense of calm and help say all that needs to be said. 

The estate planning advisors at Sachetta, LLC always lead with care and compassion. We’re accustomed to working with clients facing terminal illnesses and understand the unique and emotional challenges that come with finalizing your estate plans. We’re here to make this process as quick and comfortable as possible. Contact us today.


Matthew J. Stead, MSFP, joined our team in 2014. He obtained a bachelor’s degree in finance at Bentley University and his master’s degree in financial planning (MSFP) at The University of Georgia. Matt wears a variety of hats in the office but primarily serves as our Chief Operating Officer, as well as building and maintaining our IT infrastructure. He also is the host of our podcast Fine Answers.