Certified financial planner Catherine Latto recalls a former client who received a breast cancer diagnosis in 2005. The client, who was in her 50s, underwent a mastectomy and chemotherapy. Three years later she was diagnosed with another, more aggressive cancer. She died in 2009.
Latto, president of financial services practice Latto and Associates in Charleston, S.C., said the client had created a health-care power of attorney and living will when she was first diagnosed. But she never set up a durable power of attorney designating someone to manage her financial affairs, and she never made a will.
The woman had many antiques and family heirlooms, as well as an interest in property held in common with relatives. While she wanted her children to keep the heirlooms and property, she never put her wishes in writing.
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In short, a difficult situation for her family was made worse because the woman didn't specify how she wanted her affairs settled.
Ensuring that your family will be financially secure "is the greatest gift you can leave your loved ones," Latto said, adding that things can get complicated when someone is diagnosed with a terminal illness.
"You don't care that the market was up or down—you care that you're sick," Latto said. "Your focus is very narrow."
But effective planning can help avoid adding messy finances to an already devastating experience.
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