My Survivorship A to Z Guide

• The idea of the list is to have in one place all the information that keeps your financial and personal life functioning. The list is helpful to:
  • Save precious time.
  • Help you keep organized through the year to make sure things are done in a timely manner.
  • Make it easy for someone to take over for you if you travel or it becomes necessary.
• For convenience, we provide a List of Instructions for your use.
• If you don't want to take the time to write the whole List now, then just start. As things in your life happen, put them on your List. For example, if you call a repair person or pay a bill that you pay once a year, or call your attorney. Put house maintenance on the List so you're reminded each year when you're supposed to do it.
• Keep your List with your medical file so it doesn't get lost. If you keep it on your computer, make sure people know where it is, and your password.

Most people realize that credit can provide cash when you need it. The more credit you have, the better off you are. For example, if you have to stop working because of a disability, and have to wait until you receive a check from for your disability income.

Having credit doesn't mean you have to use it.

Credit cards have other uses as well:

• Credit cards can be a source of additional life insurance, disability insurance and unemployment insurance.
• Credit cards can provide bonuses such as free travel, gifts and discounts -- or a cash rebate.
• Ultimately, if you reach an end stage, credit can legally be used to benefit your heirs. For instance, if you go into a hospital and think you're not going to come out, you can write a check to pay the hospital. Credit life insurance will pay off the debt.
• You can use credit to pay premiums to purchase life insurance which in turn can provide both a source of cash for you and a benefit to your beneficiaries. (See below.)

For more information, see Credit, Protecting Your Credit, How To Get More Credit and Identity Theft.

Your initial instinct on learning your diagnosis may have been to spend the store. Why not? But now that you are in survivor mode, an informed CEO would be more prudent with spending money. If nothing else, take some time to re-examine what you spend to see what you spend from habit and what's meaningful. $40 a month on cappuccino is almost $600 a year.

To help avoid a money crunch:

Create a budget.

You'll quickly see if there are expenses you can reduce or eliminate. The numbers don't have to be to the penny, only relative to your financial situation. Look at our article about budgeting for a person with a life changing health condition, or create your own system. The idea is to divide your expenses into:

• Core -- Expenses you can't eliminate (such as your mortgage or rent)
• Discretionary -- Expenses that you have a choice over but which are important to your life
• Unnecessary -- That cup of high end coffee that you're tempted to call "core".

When you start thinking of areas where you can reduce expenditures, maybe you can even cut core expenses (such as moving to a less expensive place.)

Once you have a budget, it's not as important to stick with strictly as staying reasonably on target. Keeping some fun in your life is important to your mental health. Consider whether there are less expensive ways to do things. Some of the best things in life really are free.

Use every money saving technique available to you.

We have a lot of them noted in our article about Saving Money in general and in specific articles mentioned there about saving money in specific situations such as forhealth care, drugs, and when in a hospital.

Ask your most frugal friend or family member to look at how you spend your money. If the person were you, how would he or she save money? Let the person know up front you may not take the suggestions and not to be offended.

Consider whether you are maximizing your income.

Calculate what we refer to as your Real Earnings. When you get a fix on how much time and money you spend with respect to your job, you may find ways to reduce expenses and/or increase income. To learn more, see Real Earnings.

• Is there a better job or another job for which you qualify, that would pay more?

If you need or want money, there are uses of your existing assets to be considered which provide cash without having to sell the asset. For example, you can get a loan against personal property such as jewelry or investments. To learn more, click here.

Before you use any of these alternatives, consider all of them to find out which would work best for you.

You may be able to borrow from the life insurance company

Depending on the type of policy you have, and how long you've had it, you may be able to borrow money from the life insurance company at a low rate of interest. Look in your policy for such words as "loan" or "loan value."

You may be able to get money from the life insurance company if your policy has an "Accelerated Death Benefit." 

If your policy has an accelerated death benefit, and you fit the company's criteria, the life insurance company will give you an advance on the death benefit. With some companies, this can be as much as 95% of the death benefit. If you have a $100,000 policy, the company gives you $95,000 now. Money received from an Accelerated Death Benefit is generally tax free.

Accelerated Death Benefit provisions are still fairly new. Insurance companies have added these provisions for free to many older policies -- or will add them if asked. You may have the right to an accelerated death benefit even if you don't see it in your policy. 

Unless you obtained your life insurance through a fraudulent statement in your application, there is no reason not to call the insurance company and ask whether your policy has an accelerated death benefit or one could be added.

Borrow from private individuals such as an employer, friends or family.

The beneficiary may be a particularly likely person to lend you money because it's in the beneficiary's interest to keep the policy from terminating.

Borrow from a private company

Some companies will lend you money against your life insurance policy, sometimes as a line of credit that lets you borrow more and more money as needed.

Sell the policy

Companies purchase life insurance policies from people with life threatening conditions. The process is called a Viatical Settlement.

Like a loan, you get money now. However, with a loan, the difference between the amount of the death benefit and the loan goes to your beneficiary. With a Viatical Settlement, the difference goes to the purchaser.

• You can sell all or part of a policy.
• You can sell a policy on your own or through a broker.  

Proceeds may be tax free.

There are several ways you can obtain money from real estate in addition to selling it. Consider:

If you don't have a mortgage

You can take one against the value of your home.  The lender may even be able to arrange credit life insurance.

Keep in mind that if you borrow against your home, there is the risk of losing it if you do not keep up with payments.

If you do have a mortgage

Determine if you have equity. Equity is the  difference between the amount of your loan and the value of the house. If there is equity, you refinance your mortgage.

• Home Equity Line of Credit ("HELOC"): A HELOC also allows you to obtain money against the equity in your home. Check the costs of obtaining a HELOC compared to the costs of a new mortgage. Some HELOCs do not charge any costs if you keep the line for a minimum period of time. Check the provisions carefully. Some mortgages with the same name have vastly different provisions.
• Reverse Mortgages: People age 62 and older are eligible for a reverse mortgage. With a reverse mortgage, you receive a monthly income instead of making payments. Costs of taking out a reverse mortgage can be high, but worth it if you don't have a short life expectancy.
• Rental: 
  • It may also be possible to rent a portion of your home without having to move out. For example, you could set up a separate part of your house as an apartment, or take in a roommate. 
  • If you can't do chores, offer a reduced rent if the renter assumes responsibility for maintaining your home.
  • Speak with an accountant about how to report this income and related expenses.
• Home Care: If you ultimately need home care, it is possible to turn your home into an assisted living facility. You will get companionship in addition to home care.

 Potential sources of lenders are:

• Friends and family, particularly people who would inherit the items.
• Commercial lenders.
• Pawnbrokers - they still exist and are generally regulated.
• An auction house that is putting an item up for sale for you.

NOTE: If you are interested in a loan against a pay check (a payday loan) or a vehicle (a title loan), keep in mind that a missed payment frequently results in a major increase in interest rates and fees making it very difficult to repay the loan.

You can borrow against the following investments without selling or closing them before you want to:

• Certificates of Deposit
• Stocks
• Bonds

Loans on these items can come from:

• Banks or other commercial lenders.
• Brokerage houses.
• Friends and family.

 Storing important papers and documents appropriately:

• Protects them against loss.
• Saves you time.
• Makes life easier if someone needs to take over for you.

For example, the original copy of your Will should be at your attorney's or another safe, accessible place - not in a safe deposit box.  Speaking of Wills, you indicated that you do not have a Will. Please take this as a reminder to write one. Everyone should have a Will. For information about wills, including what should go into one, who should be the executor, how to make a will challenge proof, and when to use an attorney, click here. 

Make a note in your diary for a month from now to start organizing your old papers and records. If you're not up to the task then, move the date off another month. You don't have to organize everything at once.

• Any method of organizing your papers that works for you is the right way.
  • You don't have to spend a lot of money to get organized. A few files and shoe boxes will do.
  • Just be sure that if your system of organizing is not readily apparent, show a friend or family member how you do it. It would be helpful to write down the system as well.
  • For information about simple methods of keeping organized, click here. 
• Consider whatever other time saving devices work for you. For example, banking on line saves time compared with hand writing checks.

• Any method of organizing your papers that works for you is the right way.
  • You don't have to spend a lot of money to get organized. A few files and shoe boxes will do.
  • Just be sure that if your system of organizing is not readily apparent, show a friend or family member how you do it. It would be helpful to write down the system as well.
  • For information about simple methods of keeping organized, click here. 
• Consider whatever other time saving devices work for you. For example, banking on line saves time compared with hand writing checks.

Keep a photocopy of all forms you complete.

• If you mail a form, include a cover letter with a date. Attach a copy of the cover letter to the copy of the form.
• When you mail anything that seems important, send it by certified mail, return receipt requested or by overnight with a delivery system that provides delivery receipts. Note on your copy of the letter the receipt number so there is proof what was included in the particular envelope. Keep the receipt with your copy of the letter or document.
• When you are told things must be done by a deadline, note the deadline in your diary -- and finish on time.

A dollar saved is an easy dollar earned.

Look at all parts of a tax return to see how to maximize your net income by paying the minimum amount of allowable tax. It is perfectly legal to do what you can to take advantage of the tax laws.

Just because a medical expense is not covered by health insurance, does not mean it's not deductible. For example:

• Transportation to and from your doctor is a deductible expense.
• The cost of changing your home to accommodate any physical needs is deductible -- at least to the extent it does not increase the value of your property.
• A wig for hair falling out due to a treatment may be deductible if it is prescribed by your doctor as a cranial prosthesis.

Medical expenses are only deductible from your income to the extent they exceed the threshold. The threshold for the itemized deduction for unreimbursed medical expenses is 10% of the taxpayer’s Adjusted Gross Income (AGI). However, in the years 2013–2016, if either the taxpayer or the taxpayer’s spouse has turned 65 before the close of the tax year, the threshold is 7.5% of AGI. In 2017 the 10% threshold will apply to all taxpayers

If you and your spouse file separate returns, and the person with the lower income pays the medical bills, there may be a deduction that would otherwise be lost.

If you have a flexible savings account: Money not spent by the end of the year is lost. If you are headed toward a year end with a balance, check the rules to maximize your expenditures. Also check the latest date by which the money can be spent.

If you owe past due taxes or haven't filed tax returns, a health condition is not an excuse. Don't wait to get caught. Penalties can be severe.  File the returns and pay the taxes now. If you can't pay the taxes, work out a solution.

On the other hand, your condition can help you through an audit by letting the auditor know about your diagnosis. It's not a legal excuse. However, even though the auditor works for the IRS, he or she is still human.

• Treat the person courteously. We do indeed get more with honey than with vinegar. This can be particularly difficult when you're not feeling well and are confronted with an endless phone tree. It's okay to let the person know how frustrating the wait to get to him or her has been. It wouldn't hurt to also let the person know you're venting, that you understand it's not their fault, but hope they will let the company know how frustrating it is.
• Keep your emotions, particularly anger, in check when dealing with the government or insurance bureaucracy. 
• Use emotional appeals when they would be effective There are times when anger is appropriate. Even then, use it sparingly -- and always in a manner that is under control. If you have to get frustrating emotions out of your system, vent them with family, friends or your support team.
• Before the end of each conversation, to be sure you are both got the same result from the conversation,, summarize to the other person what is to be done, by whom, and by when.  Ask whether the person agrees with your summary.
• Make notes of the conversation:
  • Include the day and time and what was said. 
  • Also include the person's direct contact information such as direct phone number and e-mail address.
  • Keep your notes in the file with whatever subject you're calling about. It will make it easier to find them when needed.
• Make an alert on your calendar to follow up to check to see if what was promised was done on a timely basis. Follow up on the day of your alert.