Spouse diagnosed with cancer. Financial steps?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
hmw
Posts: 662
Joined: Sun Mar 02, 2014 11:44 am

Spouse diagnosed with cancer. Financial steps?

Post by hmw » Sun Jan 12, 2020 12:13 am

My wife has been diagnosed with late stage cancer. :( She is currently undergoing treatment but the prognosis is grim.

We are both in our mid-40's. We have a 8-year old child. DW has been a SAHM. I have taken a FMLA leave from work.

We own our house jointly in TX. The mortgage is in my name only. Most of our bank accounts are jointly owned. My wife has a few of her own bank accounts and cc. She has a small solo 401k. No other assets.

I have taken the following steps so far

-Created wills for both my wife and I. (should have done it a long time ago)
-Updated all our bank accounts/retirement accounts to make sure that there is a beneficiary for each account.
-Transferred my wife's car title to me.
-I have enough cash in our saving account to meet our expenses for the next 12 months.
-When my FMLA leave ends, I do not plan to go back to work. Will use Cobra for health insurance.

Will I be eligible for unemployment insurance after my FMLA leave ends? I have never applied for unemployment insurance in the past. Not sure about the rules regarding the requirement for actively seeking employment, which I will not be doing.

Any other steps I should take during this difficult time?

Thanks

hbdad
Posts: 44
Joined: Fri Dec 13, 2019 3:29 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by hbdad » Sun Jan 12, 2020 12:53 am

I’m sorry for your situation. My wife was diagnosed with cancer almost 2 years ago. Some other little things you might want to do is make sure there are no automatic monthly type charges like gym or something like that. Another big one, have your wife give you all her usernames and passwords for things like email or what not. You never know if you may need that. For our family, we have a will and trust, but also a separate document for all usernames and passwords for all accounts like itunes, emails, utility bills, etc. I would advise everyone to get life insurance for both spouses, especially when you have kids. My wife is also stay at home and we have a 500k policy for her.

Luckywon
Posts: 603
Joined: Tue Mar 28, 2017 10:33 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by Luckywon » Sun Jan 12, 2020 1:02 am

I am very sorry to hear this. May you and your wife have strength, keep hope, and still have many days including days with joy together ahead.

If she is not going to make any further contributions to the 401k, perhaps it may be practical to wrap up the plan now and roll it into an IRA. Perhaps check with the 401k administrator for advice on this.
hmw wrote:
Sun Jan 12, 2020 12:13 am
We own our house jointly in TX. The mortgage is in my name only. Most of our bank accounts are jointly owned. My wife has a few of her own bank accounts and cc. She has a small solo 401k. No other assets.
If there has been appreciation in value of your home or jointly owned accounts, consider whether they are titled in a way that you will get a full step up in basis rather than just half step up. The following two articles discuss this:

https://www.cpajournal.com/2017/08/18/g ... tep-basis/

https://lslcpas.com/real-estate-ownersh ... t-tenancy/

It may be worth discussing with a CPA or attorney.
Last edited by Luckywon on Sun Jan 12, 2020 2:19 am, edited 1 time in total.

User avatar
Sandi_k
Posts: 1169
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Spouse diagnosed with cancer. Financial steps?

Post by Sandi_k » Sun Jan 12, 2020 1:35 am

Oh, I am so sorry to hear this; my sympathies for you all.

You might also consider all utility accounts; my husband and I have been frustrated when only one of us is on the bill.

Do you have medical power of attorney set up? HIPAA releases from her to you with all medical offices? Do you have a durable financial power of attorney set up? Does she have any student loans still under payment? You should be aware that you are not typically responsible for them, unless you've refinanced the loans and added your name to them.

Do you know all of her credit card and store credit accounts, sufficient to shut them down to future purchases?

3funder
Posts: 1177
Joined: Sun Oct 15, 2017 9:35 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by 3funder » Sun Jan 12, 2020 8:33 am

Make sure YOU are the sole beneficiary of her life insurance payout (if she has a policy); my mother made the mistake of designating my brother (8 at the time) and me (11 at the time), and my father had to file a bunch of paperwork with the court to make sure the money went to him. He told me that it was one more headache he didn't need. My heart goes out to you, as I know firsthand how it feels to watch a loved one suffer.

Dottie57
Posts: 7557
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Spouse diagnosed with cancer. Financial steps?

Post by Dottie57 » Sun Jan 12, 2020 8:51 am

OP, since you will be terminating employment I doubt you can get unemployment. Check with your state. With FMLA, you don’t have to take it all at once. You may be able to arrange half days, 2 or 3 days a week, etc. Do you have family, friends or church who can help? Investigate all types of help.

I am sorry for your situation.

runner3081
Posts: 2696
Joined: Mon Aug 22, 2016 3:22 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by runner3081 » Sun Jan 12, 2020 8:53 am

hbdad wrote:
Sun Jan 12, 2020 12:53 am
I would advise everyone to get life insurance for both spouses, especially when you have kids. My wife is also stay at home and we have a 500k policy for her.
This is somewhat on a tangent, but very important for other readers to think about.

User avatar
Sandtrap
Posts: 8701
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Spouse diagnosed with cancer. Financial steps?

Post by Sandtrap » Sun Jan 12, 2020 9:08 am

Very sorry for your situation.
(I have been in a similar situation and it is overwhelming)
So. 1 step at a time.
Stay tough. Hang in there.

Random things to ponder:
1. Active job seeking is a requirement to collect unemployment insurance. That means documenting "X" number of verifiable places of employment that you have applied for a job, sent in a resume, etc. . . per week. PM me for more on this.
2. Cobra Medical Insurance will run out at some point. What then?
3. As an aside: why not seek employment, even part time?
4. Looking ahead, will you be relocating at some point in time?
5. Digital issues should be looked after as suggested: IE: automatic charges and billing, accounts that have credit points or refunds should be used or paid out. Some might be easier for your spouse to cancel them now.
6. It would be prudent to seek legal counsel for anything you might have missed regardless of the length of great suggestions found elsewhere.

Thoughts and prayers.
j :happy
Last edited by Sandtrap on Sun Jan 12, 2020 9:10 am, edited 2 times in total.
Wiki Bogleheads Wiki: Everything You Need to Know

hoeboe
Posts: 56
Joined: Tue Jul 06, 2010 10:43 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by hoeboe » Sun Jan 12, 2020 9:08 am

OP-
So sorry to hear about your situation. My heart goes out to you.

My spouse has also been diagnosed with two separate cancers in the past 2 years and we are also in our mid-40's. Fortunately, the prognosis has been good, but the mental and emotional trauma I've felt has made me re-examine my career and how I want to accelerate my plans to retire sooner rather than later.

During this time, it's very hard to make truly rational choices about major life decisions. I have made a major career transition as a result, but I can honestly say the way I feel today is very different than 6 months or 9 months ago. When you say you will not go back to work after FMLA, do you mean that you will be retiring early in your 40's or will you be returning to the workforce in some capacity, just not to your existing employer? Will you have the funds to FIRE?

I guess what I am suggesting is use the FMLA time to share with your spouse and family, but also leave your options open at the end of that period. It's great to be looking ahead to all options regarding cobra, unemployment insurance, and other major life altering decisions. However, I would also give your head time to get in the right emotional state before committing to them.

Hoeboe

Nowizard
Posts: 2444
Joined: Tue Oct 23, 2007 5:33 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by Nowizard » Sun Jan 12, 2020 10:55 am

I'm so sorry for your situation and offer condolences, as have others.
I would suggest that it is important to have finances in excellent condition and that there are many reasons for doing so when realizing we have put off doing so. At the same time, it is at least equally important to plan psychologically as well as financially and interact sensitively between financial and emotional concerns during a time when everything feels out of control.

Tim

User avatar
RickBoglehead
Posts: 5608
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Spouse diagnosed with cancer. Financial steps?

Post by RickBoglehead » Sun Jan 12, 2020 11:00 am

Luckywon wrote:
Sun Jan 12, 2020 1:02 am
I am very sorry to hear this. May you and your wife have strength, keep hope, and still have many days including days with joy together ahead.

If she is not going to make any further contributions to the 401k, perhaps it may be practical to wrap up the plan now and roll it into an IRA. Perhaps check with the 401k administrator for advice on this.
hmw wrote:
Sun Jan 12, 2020 12:13 am
We own our house jointly in TX. The mortgage is in my name only. Most of our bank accounts are jointly owned. My wife has a few of her own bank accounts and cc. She has a small solo 401k. No other assets.
If there has been appreciation in value of your home or jointly owned accounts, consider whether they are titled in a way that you will get a full step up in basis rather than just half step up. The following two articles discuss this:

https://www.cpajournal.com/2017/08/18/g ... tep-basis/

https://lslcpas.com/real-estate-ownersh ... t-tenancy/

It may be worth discussing with a CPA or attorney.
First, very sorry for your situation.

Definitely spend the time to speak with a tax professional. For assets that have a basis, such as a home or investments, having a stepped up basis can be significant. Moving assets within a timeframe can make the move no matter, that's where expert advice is needed.

Best wishes.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

User avatar
Bogle7
Posts: 382
Joined: Fri May 11, 2018 9:33 am

Financial step

Post by Bogle7 » Sun Jan 12, 2020 11:27 am

hmw wrote:
Sun Jan 12, 2020 12:13 am
Will use Cobra for health insurance.
Obamacare may cost less.
https://www.ehealthinsurance.com/obamacare/texas

123
Posts: 5430
Joined: Fri Oct 12, 2012 3:55 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by 123 » Sun Jan 12, 2020 1:01 pm

hmw wrote:
Sun Jan 12, 2020 12:13 am
..-When my FMLA leave ends, I do not plan to go back to work. Will use Cobra for health insurance....
Consider a leave of absence after FMLA to give you an option to return in 3, 6, or 12 months for example. Some employers can accommodate, others will simply say no.

Even if you can afford to not work it may not be the best option with a young child. It may be better for your child to be more like other households and have a parent that goes to work. If your work involves a lot of travel you likely would need a career/role change.
The closest helping hand is at the end of your own arm.

SueG5123
Posts: 154
Joined: Fri Jan 01, 2016 8:41 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by SueG5123 » Sun Jan 12, 2020 1:29 pm

Sorry to hear of your situation. Good that you (both) have wills. Regarding your house, something to keep in mind is that in Texas, joint tenancy does not apply to real estate, so probate may be required if/when you decide to sell.

Penguin
Posts: 578
Joined: Sat Mar 03, 2007 1:52 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by Penguin » Sun Jan 12, 2020 1:33 pm

Although your wife is a stay at home spouse, it is possible that she worked at some time in her life and may qualify for social security benefits. It may be worth a call or visit to the social security office to find out if she may be eligible for disability benefits now and if she succumbs whether you and your child may be eligible for survivor benefits.
Jon

momvesting
Posts: 104
Joined: Tue Apr 12, 2016 9:18 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by momvesting » Sun Jan 12, 2020 1:46 pm

Also, do you have any life insurance through your employer for her? Something to consider before deciding not to return to work at all. Also, some life insurance will allow adjustments to the amount of coverage, especially employer plans. I bought $10k plans for my husband and daughter through my employer even though we are insured elsewhere just because those plans can be increased without further physicals, questionnaires, or approvals, I can just make adjustments through my employee portal. If you have anything like that you could significantly increase her life insurance now.

ClaycordJCA
Posts: 326
Joined: Sun Aug 09, 2015 11:19 pm
Location: SF Bay Area

Re: Spouse diagnosed with cancer. Financial steps?

Post by ClaycordJCA » Sun Jan 12, 2020 2:10 pm

OP -

Very sorry to hear of this. FYI - If you do not return to work for at least 30 days after exhausting FMLA leave, your employer may be able to recover from you the health insurance costs it paid while you were on leave. There is an exception if the failure to return is due to the continuation of your wife’s serious health condition, but you can be asked to provide a medical certification from her doctor attesting that her medical condition requires you to remain off work.

Herekittykitty
Posts: 681
Joined: Wed Apr 16, 2014 8:11 pm
Location: Flyover Country

Re: Spouse diagnosed with cancer. Financial steps?

Post by Herekittykitty » Sun Jan 12, 2020 4:43 pm

Keep your own life insurance in force. See a lawyer about guardianship arrangements for your child and make sure the chosen guardian/guardians agree.

See if Social Security benefits if any are available for her now and for you and your child later if any. Don't make any assumptions on this. If she has ever worked I would set up a time to go in to Social Security with her and talk to them if she is able.

Take care of yourself as well as her.

Keep in touch with friends, family, place of worship if any.
I don't know anything.

User avatar
ResearchMed
Posts: 9457
Joined: Fri Dec 26, 2008 11:25 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by ResearchMed » Sun Jan 12, 2020 4:55 pm

SO sorry to hear this!

Yes, take care of *yourself*, too... for you and for your child.

That means, in part, if there becomes a time where there is a significant amount of time/energy doing errands/medical appointments, and basic care, then try very hard to carve out some time for yourself.
If you want to do 'all of the above' (or most of it), then try to get some serious housekeeping help. Any yard care, etc... let someone else do it for a while, except for things that you find relaxing, etc.

There are probably some local support groups; ask physicians or hospital social worker.
Let those services help all of you. They have experience, and probably a lot of suggestions, some of which may click for you.

And keep an eye on your child. It's hard to predict what s/he might be "picking up" and perhaps not speaking about.
Perhaps a few parents of some friends could make an extra effort to invite her/him over, both for fun and also some distraction.
You might (or might not) want to check with your pediatrician or a therapist about how to help your child.

Best wishes to all of you!

RM
This signature is a placebo. You are in the control group.

Lalamimi
Posts: 197
Joined: Mon Jun 24, 2019 4:22 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by Lalamimi » Sun Jan 12, 2020 5:10 pm

so sorry for the situation of your family. No, you cannot get unemployment benefits if you quit your job, unless perhaps you can get the company to terminate you and agree your drawing. Most unlikely. As others suggested, maybe just get a leave of absence for now but be sure you can pay for the company insurance during that time. Talk to HR, maybe even coming into the office one day a week or working from home would keep you covered. Cobra is very expensive and your wife and child will need insurance. And, as posted, look into social security - did she work enough to get credits? Your child can get benefits if they are there, and so could you if you have little income. So glad you able to think ahead. My dear friend lost her husband to cancer at age 47, she was in denial and did everything wrong - let her sons drain her, went bankrupt, did not have the insurance on car loan regarding illness, loss of income. Almost lost her home. She just turned 66 and found out she can now draw his full SS. Good luck from a fellow Texan.

VGisforme
Posts: 109
Joined: Wed May 02, 2007 2:08 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by VGisforme » Sun Jan 12, 2020 6:16 pm

This hits way too close to home with me as we are mid 40s and my wife recently had a recurrence of cancer after nearly 7 years. Our kids are 9 and almost 7. I've been busy avoiding the financial issues as most things are squared away but at some point I'll have to put together more of a plan as well. Cancer is cruel and most folks don't really understand what a recurrence means especially when there are a few metastatic locations.

I cannot imagine voluntarily leaving work. My insurance has paid hundreds of thousands of dollars in claims just in the second half of 2019.

I don't know about how flexible your work situation is but I'd try to stay on with reduced hours or some work from home days etc. Also FMLA can be spread out as others have said.

Best of luck to you I know we both have a long road ahead... I just wish it was even longer.

Topic Author
hmw
Posts: 662
Joined: Sun Mar 02, 2014 11:44 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by hmw » Sun Jan 12, 2020 8:49 pm

OP here,

Thanks for all your support and helpful suggestions.

The nature of my work makes part time employment difficult. My FMLA leave will end in a couple of months. Cobra will extend the current health insurance for another 18 months. Realistically DW is unlikely to have 18 months left. :( Her health has really deteriorated over the last 3 months. I have earned a very good income and we have always lived below our means. We have adequate savings to last us for a long time. I contemplated never returning back to work again. But decided against it. I will either return to my old job or look for another job after DW passes.

We did not buy any life insurance for DW. She thinks that her parents might have purchased some kind life insurance when she was a child. She does not know anything beyond that. I doubt that it is worth much money.

It is clear that I won't be eligible for unemployment insurance.

DW did not work in the US, therefore no ss for her.

Thanks for letting me know about the step up basis for investment and house. Our house has not gained much since the purchase. However we do have significant unrealized capital gains in our taxable account. From the linked articles sited, it appears that I will be eligible for full step up basis since TX is community property state. Should I speak to a CPA or a tax attorney about it? Is one better than the other? Would it make sense to sell all equities that have cap gains in my taxable account shortly after DW's death, and buy VTI immediately after to reset the basis and have a clean slate going forward?

If our jointly owned house will have to go through probate, is it a complicated process in TX? Anything I should do now to make things easier?

Will get DW's various login/password as suggested.

Our son has handled the difficult situation reasonably well so far. I realize that I will need to keep a close eye on him. I am sure it will only get more difficult for him.

Thanks

Dottie57
Posts: 7557
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Spouse diagnosed with cancer. Financial steps?

Post by Dottie57 » Sun Jan 12, 2020 9:21 pm

hmw wrote:
Sun Jan 12, 2020 8:49 pm
OP here,

Thanks for all your support and helpful suggestions.

The nature of my work makes part time employment difficult. My FMLA leave will end in a couple of months. Cobra will extend the current health insurance for another 18 months. Realistically DW is unlikely to have 18 months left. :( Her health has really deteriorated over the last 3 months. I have earned a very good income and we have always lived below our means. We have adequate savings to last us for a long time. I contemplated never returning back to work again. But decided against it. I will either return to my old job or look for another job after DW passes.

We did not buy any life insurance for DW. She thinks that her parents might have purchased some kind life insurance when she was a child. She does not know anything beyond that. I doubt that it is worth much money.

It is clear that I won't be eligible for unemployment insurance.

DW did not work in the US, therefore no ss for her.

Thanks for letting me know about the step up basis for investment and house. Our house has not gained much since the purchase. However we do have significant unrealized capital gains in our taxable account. From the linked articles sited, it appears that I will be eligible for full step up basis since TX is community property state. Should I speak to a CPA or a tax attorney about it? Is one better than the other? Would it make sense to sell all equities that have cap gains in my taxable account shortly after DW's death, and buy VTI immediately after to reset the basis and have a clean slate going forward?

If our jointly owned house will have to go through probate, is it a complicated process in TX? Anything I should do now to make things easier?

Will get DW's various login/password as suggested.

Our son has handled the difficult situation reasonably well so far. I realize that I will need to keep a close eye on him. I am sure it will only get more difficult for him.

Thanks
Hopefully your house is titled such that it is owned jointly and you become the sole owner after her death (so sorry to type those terrible words). If it is not so titled , pay a lawyer to get it titled in this manner. It will make your life easier.

Laws regarding titling a home and probating an estate are state and not federal.

The school system may have a therapist who can help if necessary. Of course make sure there are no problems in school for your son now and in the future - including years down the road.
Last edited by Dottie57 on Sun Jan 12, 2020 9:27 pm, edited 1 time in total.

User avatar
RickBoglehead
Posts: 5608
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Spouse diagnosed with cancer. Financial steps?

Post by RickBoglehead » Sun Jan 12, 2020 9:26 pm

hmw wrote:
Sun Jan 12, 2020 8:49 pm
Would it make sense to sell all equities that have cap gains in my taxable account shortly after DW's death, and buy VTI immediately after to reset the basis and have a clean slate going forward?
The stepped up basis is the clean slate.. Brokerage will change the cost basis. Only sell if you meant different investments.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

User avatar
geerhardusvos
Posts: 177
Joined: Wed Oct 23, 2019 10:20 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by geerhardusvos » Sun Jan 12, 2020 9:28 pm

hmw wrote:
Sun Jan 12, 2020 12:13 am
My wife has been diagnosed with late stage cancer. :( She is currently undergoing treatment but the prognosis is grim.

We are both in our mid-40's. We have a 8-year old child. DW has been a SAHM. I have taken a FMLA leave from work.

We own our house jointly in TX. The mortgage is in my name only. Most of our bank accounts are jointly owned. My wife has a few of her own bank accounts and cc. She has a small solo 401k. No other assets.

I have taken the following steps so far

-Created wills for both my wife and I. (should have done it a long time ago)
-Updated all our bank accounts/retirement accounts to make sure that there is a beneficiary for each account.
-Transferred my wife's car title to me.
-I have enough cash in our saving account to meet our expenses for the next 12 months.
-When my FMLA leave ends, I do not plan to go back to work. Will use Cobra for health insurance.

Will I be eligible for unemployment insurance after my FMLA leave ends? I have never applied for unemployment insurance in the past. Not sure about the rules regarding the requirement for actively seeking employment, which I will not be doing.

Any other steps I should take during this difficult time?

Thanks


I am so sorry to hear about your wife. I know you have a lot on your mind but care for your son is a big deal, so being able to be close to family is a big deal here. Lots of other good advice for you here, but hang in there... you can get through this
VTSAX and chill

StrawMan
Posts: 30
Joined: Mon Jul 07, 2014 7:51 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by StrawMan » Sun Jan 12, 2020 9:30 pm

Ten years ago I was in your position. I lost my wife to cancer. I also had a young child.

I’ll pray for you and your family. I’m truly sorry.

My wife had made sure to write down/record all of her account passwords and user names - this proved invaluable.

I’m sure there is some other strategic advice. But honestly, that [stuff -- mod oldcomputerguy] is going to work itself out. Focus on the time you have left together as a family. We did some audio book recordings of my wife reading (daughter was 2 at the time), things that will create lasting memories.

User avatar
Watty
Posts: 18115
Joined: Wed Oct 10, 2007 3:55 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by Watty » Sun Jan 12, 2020 9:32 pm

hmw wrote:
Sun Jan 12, 2020 12:13 am
-When my FMLA leave ends, I do not plan to go back to work. Will use Cobra for health insurance.
Be sure to see if they will extend your leave even though they legally do not have to.

They may also be able to switch you to some other roll or a contracting or consulting roll.

In some situations you may even find that "escaping" to work might occasionally be a good thing to help get your mind off of the situation for a few hours.

perplexed
Posts: 64
Joined: Thu Feb 02, 2012 4:32 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by perplexed » Sun Jan 12, 2020 9:37 pm

So very sorry for you. I am in my early 40, and personally going through this for the last 3 years. We also have an (almost) 9 year old, making matters worse but at the same time gives me strength and reason to go on. We both work, and lucky to have a very stable jobs, but were not prudent to have a significant life insurance. Many of the suggestions have been really useful. I am curious, if there are specific documents that the SSA office accepts as spouse. For example, does a marriage certificate count!? I know it may sound dumb, but still asking if I need to do more than that.

Luckywon
Posts: 603
Joined: Tue Mar 28, 2017 10:33 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by Luckywon » Mon Jan 13, 2020 1:56 am

hmw wrote:
Sun Jan 12, 2020 8:49 pm


Thanks for letting me know about the step up basis for investment and house. Our house has not gained much since the purchase. However we do have significant unrealized capital gains in our taxable account. From the linked articles sited, it appears that I will be eligible for full step up basis since TX is community property state. Should I speak to a CPA or a tax attorney about it? Is one better than the other? Would it make sense to sell all equities that have cap gains in my taxable account shortly after DW's death, and buy VTI immediately after to reset the basis and have a clean slate going forward?

I have looked into this in California. What I found helpful was to speak to the estate department/cost basis team at each brokerage where we have funds. I was able to get answers from them about how the various forms of account titling affected the process and eligibility for, upon death of one spouse, resetting full rather than half of cost basis and whether or not probate may be required.

At both E*trade and Schwab, for accounts titled as Joint Tenants With Right of Survivorship (JTWROS), upon death of one spouse, the brokerage would reset the cost basis of the full account, upon request of the survivor (and the survivor must specifically request it). Probate would not be necessary as the funds would pass to the survivor automatically.

Holding the account as community property would also provide full cost basis step up at both Schwab and E*trade but at E*trade their community property accounts are without right of survivorship so probate may be necessary to transfer the funds to the survivor. At Schwab, it is possible to title the property as community property with right of survivorship such that probate would not be required. The process to get this set up at Schwab requires close attention and a couple of steps. So, it is complicated and varies at the brokerages.

For me in California, I decided it is best to hold accounts at both Schwab and E*trade titled as JTWROS. It may be different in Texas, even though both California and Texas are community property states-specifically the step where you request the brokerage reset the full cost basis in an account titled JTWROS based on your considering the account community property sounds like it might conceivably be open to challenge by the brokerage or the IRS and might vary by state, I don't know for sure as I am not a lawyer or tax professional.

I'd suggest starting with your brokerages' estate departments and confirming what you find out with either your CPA or an attorney. I don't know which would be better, it would depend on the CPA/attorney.

As stated previously, there is no need to sell the equities to reset the cost basis. The cost basis for each share held by the decedent ideally is reset by the brokerage to the value as of the date of death and becomes applicable if and when the beneficiary sells that share. If you were not able to get the brokerage to do that, you could manually do this on your return for the year in which you sold that share. If you never sold it, your heirs would get another step up upon your death.

Again, my sympathies and thoughts are with you.

Newlearner19
Posts: 43
Joined: Tue Nov 05, 2019 3:59 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by Newlearner19 » Mon Jan 13, 2020 5:52 am

hmw wrote:
Sun Jan 12, 2020 8:49 pm
OP here,


Thanks for letting me know about the step up basis for investment and house. Our house has not gained much since the purchase. However we do have significant unrealized capital gains in our taxable account. From the linked articles sited, it appears that I will be eligible for full step up basis since TX is community property state. Should I speak to a CPA or a tax attorney about it? Is one better than the other?

If our jointly owned house will have to go through probate, is it a complicated process in TX? Anything I should do now to make things easier?

Will get DW's various login/password as suggested.

Our son has handled the difficult situation reasonably well so far. I realize that I will need to keep a close eye on him. I am sure it will only get more difficult for him.

Thanks
Terribly sorry for your family. It wasn’t clear in first post if you had attorney draft your wills. Maybe not as you aren’t sure about probate issues & that should have been discussed at same time. Please see an estate planning lawyer to be sure your wills are valid & will do what you think they will.

An attorney should have drafted living will/durable health care power of attorney so you can make health care decisions for your wife if she’s not able. You need those also.

Lawyer can think of things no one here can advise you about if probate is required. Including how to set up a trust under your will to provide for your child in tragic event you die before child becomes adult.

Someone else mentioned that you would need to designate guardian for your child in your will. You may choose the same or different person to take care of your child and to take care of the finances for providing for your child.

Look into hospice care sooner not later. Your insurance likely pays for it. It may pay for a hospital bed and other supplies while she is at home. And periodic home nursing visits. Social worker at doctors office should be able to give you both information about out of hospital DNR. Hospital of choice should have a form for in hospital DNR.

If her parents bought life insurance when she was a child they may be the beneficiaries. Lower priority than other matters but probably easier for her to ask them about it now than for you to ask later. If it matters to you.

Have you made plans together about burial or cremation? If you make arrangements in advance you have the ability to find better prices and to have all those decisions made in advance, not when your child will need you most.

God bless all of you.

GlennK
Posts: 41
Joined: Tue Mar 26, 2019 7:20 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by GlennK » Mon Jan 13, 2020 11:13 am

I am very sorry to read of your situation. Prayers to you and your family.

My wife died of cancer nearly 4 years ago after fighting it for 19 months. We were in our mid-50's.

Most of the needed tasks have been covered by others. We were stupid and never had wills (I do now) so if at this time you can get your wife to have one written, please do. Once diagnosed, my wife refused to discuss the idea. She thought it was defeatist.

I had a good relationship with my local credit union which helped when I received checks in my wife's name after her death. I simply had to tell them/show them(?) I was the executor and they would deposit any checks in her name to my account. I actually received a check over a year after she passed and the accounts were in my name only. So if you do not have a good relationship with a local bank, start working on it. I really kept a minimum amount in the credit union but I do use it for my paycheck's automated deposit and bill payment. Each pay period I then transfer any remaining funds to my higher dividend paying online bank. So it is surprising I do have a relationship.

PoppyA
Posts: 525
Joined: Sat Oct 11, 2014 4:24 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by PoppyA » Mon Jan 13, 2020 11:51 am

So sorry.

This is not financial, but be bold and spend time together as a family. Even if the wife is reluctant. Take vacation or staycations. Make memories.

And, my #1 caregiver tip - paper plates.

J295
Posts: 2246
Joined: Sun Jan 01, 2012 11:40 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by J295 » Mon Jan 13, 2020 2:06 pm

Sympathy, thoughts, and prayers your way.

stw
Posts: 30
Joined: Wed Jul 05, 2017 10:29 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by stw » Mon Jan 13, 2020 3:02 pm

One thing regarding online accounts. Be sure to keep her cell phone account active for awhile. If you forget to get the userid/password for a specific account or they were written down incorrectly, you will be able to reset most of them using her email and two factor authentication, if used (like a text to the phone, for instance).

I wish that you all feel comfort and peace in the coming days.

focusedonwhatmatters
Posts: 156
Joined: Wed Nov 29, 2017 11:49 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by focusedonwhatmatters » Mon Jan 13, 2020 10:52 pm

I am so, so sorry. I lost my husband when I was 41, my kids 5 and 9. Try to spend what time you have making memories.

Most things have been covered in other responses, but two I didn't see mentioned:

Order at least a dozen death certificates. They are required by far more organizations than I ever imagined, and many never returned them. They are cheaper and easier to order at the onset and only require that emotional turmoil once.

If you have Comcast and she is on the account, have her removed now. They were by far the worst of the utilities to deal with.

There are lots of grief groups and camps for kids which I highly recommend. It's a tough, lifelong haul.

fowm

Topic Author
hmw
Posts: 662
Joined: Sun Mar 02, 2014 11:44 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by hmw » Tue Jan 14, 2020 7:01 pm

perplexed wrote:
Sun Jan 12, 2020 9:37 pm
So very sorry for you. I am in my early 40, and personally going through this for the last 3 years. We also have an (almost) 9 year old, making matters worse but at the same time gives me strength and reason to go on. We both work, and lucky to have a very stable jobs, but were not prudent to have a significant life insurance. Many of the suggestions have been really useful. I am curious, if there are specific documents that the SSA office accepts as spouse. For example, does a marriage certificate count!? I know it may sound dumb, but still asking if I need to do more than that.
I wish you the best!

Topic Author
hmw
Posts: 662
Joined: Sun Mar 02, 2014 11:44 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by hmw » Tue Jan 14, 2020 7:02 pm

Luckywon wrote:
Mon Jan 13, 2020 1:56 am
hmw wrote:
Sun Jan 12, 2020 8:49 pm


Thanks for letting me know about the step up basis for investment and house. Our house has not gained much since the purchase. However we do have significant unrealized capital gains in our taxable account. From the linked articles sited, it appears that I will be eligible for full step up basis since TX is community property state. Should I speak to a CPA or a tax attorney about it? Is one better than the other? Would it make sense to sell all equities that have cap gains in my taxable account shortly after DW's death, and buy VTI immediately after to reset the basis and have a clean slate going forward?

I have looked into this in California. What I found helpful was to speak to the estate department/cost basis team at each brokerage where we have funds. I was able to get answers from them about how the various forms of account titling affected the process and eligibility for, upon death of one spouse, resetting full rather than half of cost basis and whether or not probate may be required.

At both E*trade and Schwab, for accounts titled as Joint Tenants With Right of Survivorship (JTWROS), upon death of one spouse, the brokerage would reset the cost basis of the full account, upon request of the survivor (and the survivor must specifically request it). Probate would not be necessary as the funds would pass to the survivor automatically.

Holding the account as community property would also provide full cost basis step up at both Schwab and E*trade but at E*trade their community property accounts are without right of survivorship so probate may be necessary to transfer the funds to the survivor. At Schwab, it is possible to title the property as community property with right of survivorship such that probate would not be required. The process to get this set up at Schwab requires close attention and a couple of steps. So, it is complicated and varies at the brokerages.

For me in California, I decided it is best to hold accounts at both Schwab and E*trade titled as JTWROS. It may be different in Texas, even though both California and Texas are community property states-specifically the step where you request the brokerage reset the full cost basis in an account titled JTWROS based on your considering the account community property sounds like it might conceivably be open to challenge by the brokerage or the IRS and might vary by state, I don't know for sure as I am not a lawyer or tax professional.

I'd suggest starting with your brokerages' estate departments and confirming what you find out with either your CPA or an attorney. I don't know which would be better, it would depend on the CPA/attorney.

As stated previously, there is no need to sell the equities to reset the cost basis. The cost basis for each share held by the decedent ideally is reset by the brokerage to the value as of the date of death and becomes applicable if and when the beneficiary sells that share. If you were not able to get the brokerage to do that, you could manually do this on your return for the year in which you sold that share. If you never sold it, your heirs would get another step up upon your death.

Again, my sympathies and thoughts are with you.
Thank you! That was very helpful
Last edited by hmw on Tue Jan 14, 2020 7:06 pm, edited 1 time in total.

Topic Author
hmw
Posts: 662
Joined: Sun Mar 02, 2014 11:44 am

Re: Spouse diagnosed with cancer. Financial steps?

Post by hmw » Tue Jan 14, 2020 7:05 pm

PoppyA wrote:
Mon Jan 13, 2020 11:51 am
So sorry.

This is not financial, but be bold and spend time together as a family. Even if the wife is reluctant. Take vacation or staycations. Make memories.

And, my #1 caregiver tip - paper plates.
Thank you! We did a European trip in the summer between rounds of chemo. Flew biz class and stayed at 5 star hotels. I have some regrets that we didn’t spend more money on travel before the diagnosis.

User avatar
JoeRetire
Posts: 4523
Joined: Tue Jan 16, 2018 2:44 pm

Re: Spouse diagnosed with cancer. Financial steps?

Post by JoeRetire » Tue Jan 14, 2020 7:13 pm

hmw wrote:
Sun Jan 12, 2020 12:13 am
My wife has been diagnosed with late stage cancer. :( She is currently undergoing treatment but the prognosis is grim.
I'm so sorry.
Will I be eligible for unemployment insurance after my FMLA leave ends? I have never applied for unemployment insurance in the past. Not sure about the rules regarding the requirement for actively seeking employment, which I will not be doing.
You'll need to check with your state's unemployment office. Where I live, you need to be actively looking for work.
Any other steps I should take during this difficult time?
Seek help from advocacy groups. When I was diagnosed with cancer, several came to me with offers of group help, counseling, etc. It's good to now them, in case you need their services. And often, talking with others in a similar situation can help.

Try not to make any irrevocable decisions that aren't necessary. You are going through a difficult time. But over time, things change and your thoughts may change. (For example, at some point in time you may want to go back to work. Or you may wish to work from home, or part time while your child is in school.) Remain as flexible as you can.
Very Stable Genius

Post Reply