What to Do When a Loved One Is Diagnosed with a Terminal Illness

Matthew F. Erskine, JD, Contributor
July 14, 2025

By taking these legal, financial, and personal steps, you give your loved one control over their final chapter, and peace of mind for those who will carry on.

When a loved one receives a terminal illness diagnosis, families face emotional upheaval and crucial decisions. It's a challenging time, marked by urgency—not only for medical care but also for financial, legal, and legacy planning. These steps are vital to preserve dignity, reduce conflict, and ensure that your loved one’s wishes are honored.

Drawing on my experience as a Trusts and Estates attorney, here is a comprehensive guide for navigating the complexities that follow a terminal diagnosis. These essential actions support the patient and prepare their spouse or adult children for the weeks and months ahead.

1. Review and Update Estate Planning Documents

• Will and Revocable Trust – Ensure they reflect current wishes.
• Durable Power of Attorney (DPOA) – Designate a trusted individual to manage financial matters.
• Healthcare Proxy and Advance Directives – Authorize someone to make medical decisions and outline treatment preferences.
• Do Not Resuscitate (DNR) and Medical Orders for Life Sustaining treatment (MOLST) forms – Provide guidance to emergency responders and physicians.

Outdated or incomplete documents can create legal bottlenecks. For instance, a twenty year old will and trust should be updated to align with the current family structure and tax goals.

2. Check Beneficiary Designations and Access to Accounts

Beneficiary designations on retirement accounts and life insurance policies override what’s written in a will. Confirm that:

• Designations are current and correctly name the spouse or intended heir.
• Joint accounts provide sufficient liquidity for immediate expenses.
• The location and access credentials for any digital assets, including cryptocurrency, are known.

If the patient holds crypto or NFTs, ensure someone knows where the assets are stored and how to retrieve them to prevent loss.

3. Confirm Financial Authority Through a Valid Power of Attorney

Without a valid DPOA, families may need to seek court-appointed guardianship—an expensive and time-consuming process. If the DPOA is outdated, banks or brokerages may refuse to honor it. Ensure the appointed individual is ready and informed, especially regarding assets titled solely in the patient’s name.

4. Discuss Burial and Funeral Preferences

Though uncomfortable, discussing funeral preferences and the disposition of remains is an act of kindness. Considerations include:

• Burial or cremation?
• Religious or secular service?
• Preferred funeral home?
• Any prepaid arrangements?

Documenting these preferences avoids family conflict and uncertainty in the immediate days following death.

5. Create an Asset Inventory and Clarify Ownership

Families benefit from a comprehensive inventory of:

• Bank and investment accounts
• Real estate and vehicle titles
• Safe deposit boxes
• Collectibles or high-value personal property
• Business interests

If the individual owns a company, transferring non-voting shares to children or successors can reduce estate tax exposure and ensure continuity.

6. Keep the Advisory Team in the Loop

Inform your CPA, estate attorney, financial advisor, and insurance agent. This team can assist with:

• Strategic gifting before death
• Minimizing estate and income taxes
• Coordinating asset retitling or trust funding
• Preparing final tax filings

Having all professionals aligned is especially critical if the patient has complex assets or resides in a high-tax state like Massachusetts.

7. Provide for the Caregiver

Spouses and adult children often assume caregiving roles that can stretch physical, emotional, and financial limits. Consider:

• Hospice or in-home palliative care
• Respite care options
• Delegating household and administrative responsibilities
• Therapy or support groups for caregivers

Caregiving plans should be as clear and realistic as the medical and legal ones.

8. Educate and Involve the Next Generation

Include children and other heirs in the planning conversation. Help them:

• Understand the estate plan
• Meet the family’s advisors
• Access essential records
• Learn the values underpinning financial decisions

Transparency today reduces confusion and conflict tomorrow.

9. Capture Legacy Beyond the Legal Documents

Consider what can’t be passed through a will:

• Letters to family members
• Audio or video messages
• Family recipes or photo albums
• Ethical wills or value statements

These legacy items often become the most treasured family heirlooms, providing meaning and healing long after the paperwork is settled.

Final Thoughts: Planning Is a Gift

A terminal diagnosis is devastating, but it presents an opportunity for clarity, connection, and legacy. By taking these legal, financial, and personal steps, you give your loved one control over their final chapter, and peace of mind for those who will carry on. Don’t wait—engage your advisors, update your documents, and have the conversations that matter. Planning is not about giving up—it’s about giving meaning to every moment that remains.

By Matthew F. Erskine, JD, Contributor