Probable Death of Spouse; How do I protect what little assets there are?

by Kacy
(Milwaukee, WI)

My husband was recently diagnosed with stage 4 colorectal cancer with wide mestases to the liver and lymph nodes. While he is currently doing well with chemotherapy, I understand that there is a big probability that I may lose my husband to this disease as quickly as 18 months (which only leaves me about 11 months with him If I'm lucky) Of course I do not claim to know his hour of death, nor do I want this to happen, but I need to protect myself. I am only 48 and can't fathom the thought of starting over with nothing after working so hard all my life. We own our home and 3 vehicles, we have about 90k in equity in the house and I have my own retirement account. My husband unfortunately made some mistakes that I was not aware of until the diagnosis; He used all of his life insurance money, savings and 401k and we had no health insurance either due to the economy. So, not only will I be left with no money, no husband and no life insurance money, I will be left with all the debt as well. I need to find a way to protect the assets in the event of my husband's death. What can I do now to protect the equity I have in the house from creditors?? I live in Wisconsin, which means it's a community property state and I will be held responsible for my husband's debts; which will be insurmountable for a woman earning less than $40,000.00 per year. I'm seriously scared because I will more than likely have to file Bankruptcy after his death. I won't qualify for a mortgage on my own, especially with the debt....So, I don't know what to do! I just know that doing nothing is not an option for me at this point.
Thank You!!!

Comments for Probable Death of Spouse; How do I protect what little assets there are?

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Jul 10, 2012
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I am so sorry for your situation. I know it must be horrible to be worried about your husband's health and the fact that you will lose him and to be stressed out about your future financial future as well.

My best advice for you is to schedule an appointment with a fee-only financial planner immediately so the two of you can discuss what you might be able to do now to improve your financial situation later and hopefully to avoid bankruptcy. I would do this immediately.

If the financial planner believes that your situation is such that you may end up having to file for bankruptcy, schedule an appointment with a consumer bankruptcy attorney right away. The attorney will help figure out if there is something you can do to avoid it and will also tell you what you should and should not do. Some people do things with their finances that end up working against them when they file for bankruptcy. You want to avoid being in that situation.Go here to schedule a free initial evaluation with a bankruptcy attorney.

Also, you should know that filing for bankruptcy does not mean that you necessarily have to lose all of your assets. Some of your assets are protected by law and with the right pre-bankruptcy planning, done with the help of a bankruptcy attorney, you can hold on to others. Furthermore, if you file a Chapter 13 reorganization bankruptcy you will lose few if any assets.

Finally, has your husband prepared a durable power of attorney for his finances, a durable medical power of attorney, and a living will? These are all simple documents that an estate planning attorney can help you prepare. If your husband loses the ability to make financial decisions for himself as his disease progresses, you will need his durable power of attorney (I am assuming he will name you as his financial agent.) to sign documents on his behalf, close accounts and so on while he is still alive -- things the financial planner or bankruptcy attorney may advise you to do. Also, assuming your husband gives you medical power of attorney, you will have the right to make medical decisions on his behalf if he is no longer able to make them. The living will spells out the kinds of life sustaining treatment your husband does and does want when he is close to death.

Also, does your husband have a will? That is another document he should prepare before his death. Again, an estate planning attorney can help with this.

I know I am adding a lot to your plate, but my recommendations will help you minimize any disruptions to your financial situation once your husband dies and will help you ensure that you have the legal documents you need during the months prior to his death. Good luck.

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