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Revise your estate planning if you’re diagnosed with a serious disease

 If you or a loved one has recently been diagnosed with a serious disease, it’s a good idea to review your estate planning documents and adjust them to reflect the diagnosis.

For instance, if someone is diagnosed with the early stages of Alzheimer’s disease – or any other disease that could affect cognitive functioning down the road – it’s wise to expedite your estate planning. Sign documents as soon as possible, while mental competency is not yet in question. You might want to get a letter from a doctor confirming that you or your loved one is still competent to make decisions.

It’s a good idea to review your living will and make additions based on possibilities that are likely to arise with the specific disease, such as experimental treatments.

If you expect to be in and out of a hospital or temporarily incapacitated, consider signing a limited power of attorney for such occasions. This document could give someone the power to pay your bills and handle routing financial matters, but not to sell assets or make gifts.

If a long, debilitating illness is a possibility, consider a durable power of attorney that names successor agents, in case your first agent stops being willing or able to handle the job. If you expect one agent to handle your affairs over a very long period, you might want to provide compensation, even if he or she is a family member. (There can be some tax benefits in this arrangement, since paying compensation can get assets out of your taxable estate.)

You might want to consolidate multiple bank or brokerage accounts into one, because that will probably be easier for you – or your agent – to handle if you become impaired.

Finally, if you have a disease such as Parkinson’s or multiple sclerosis that affects motor skills, the appearance of your signature may change. You might want to execute an affidavit explaining this fact in case anyone questions the validity of your signature.

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