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suezyque said:   turtlebug said:   suezyque said:   Kashisti said:   suezyque said:   My brother lost his wife to cancer 4 years ago. The SS survivor benefits for his 3 children were $1000K each/month. They were 8,9 and 11 at her death. They will receive those benefits until the age of 18.

I'm very sorry for your brother's loss, and for the information. I imagine that only my three biological children would be eligible for the benefits. My step-son (9 year-old) lives with me full-time. My wife has full legal custody. I have zero legal custody.

Actually, if he were eligible for benefits - I would think that the system was even more broken that I used to!


You can adopt him and then I'm sure he would qualify.

I don't think the 9yo's dad would like that.


Under the circumstances, I think he would understand.

Why would he agree to do so? Also, in consenting to an adoption, the noncustodial parent relinquishes all parental rights and responsibilities, including child support.

Glitch99 said:   It may be too soon, but look to draw credit card advances for cash to pay off the mortgage, etc. The life insurance will be hers, don't plan to use it to pay off your debts.

Yeah, while OP doesn't sound like he wants to abuse this, and while it may be basic knowledge among the FWF crowd, twice in my life now, I've had the spouse of a recently deceased husband mention to me about how much CC debt they had and how she's having an impossible time paying it back with him gone. Even if you don't want to abuse it, make sure she is aware that CCs in your name are not a debt she needs to worry about generally.

What are the scenarios for taking on additional Credit Card debt, to use at this difficult time, that MAY not have to be paid of "in the end".

You said "We have a few credit cards". Are these joint cards with your wife or in your name only? Not sure how to say this but if you feel the time is coming close to where you wont make, max them out (cash advance, buy stuff your family will need) and then stick the bill to the credit card companies, only if they are in your name only. The credit card companies can only go after your estate if it has money in it, they cant go after your wife or her life insurance inheritance. Just an idea, of course not ethical but....

edit: 3 of the same ideas all within 2 minutes of each other

suezyque said:   turtlebug said:   suezyque said:   Kashisti said:   suezyque said:   My brother lost his wife to cancer 4 years ago. The SS survivor benefits for his 3 children were $1000K each/month. They were 8,9 and 11 at her death. They will receive those benefits until the age of 18.

I'm very sorry for your brother's loss, and for the information. I imagine that only my three biological children would be eligible for the benefits. My step-son (9 year-old) lives with me full-time. My wife has full legal custody. I have zero legal custody.

Actually, if he were eligible for benefits - I would think that the system was even more broken that I used to!


You can adopt him and then I'm sure he would qualify.

I don't think the 9yo's dad would like that.


Under the circumstances, I think he would understand.


And not to be too shrewd, but he'd be free of his child support obligation at that point as well (if I'm not mistaken).

My prayers are with you, but please allow me to try to just get right to the chase and give some advice. My focus will be strictly on the life and disability insurance issues.

The advice is designed to try to help you, but it also should serve as a cautionary tale for others.

Your basic situation is 1) you are uninsurable and 2)you might die within the next two years. That second part is true for all FWF readers and we are all insurable until that very day that we are not.

Questions:
Long Term Disability Insurance:
1)Is your long term disability insurance through work? If so, if you can make any of the following changes either now or at open enrollment, make the changes!
A)Increase the benefit.
B)Shorten the elimination period.
C)If your employer is paying the premium, see if you can find the way for you to pay it. For instance, maybe your employer can up your salary and then have you pay for it.
D)If you are paying the premium, pay it post tax and not pre tax. (C and D are so that the benefits would be tax free.)
E)"Terminal Illness" does not equal "disabled". Being disabled is all about the contract. What does your contract say? Does your policy expire as soon as you separate from your employer? For example, you get to the point where you realistically know that are not going to survive. You are still capable of working part time. However, obviously, you would rather use that energy to spend as much time as possible with your wife and children. If you quit to do this, would you lose your disability insurance?

Short term disability insurance:
1)If you can add it, do it!

Life Insurance:
1)If you can get any additional coverage through open enrollment, do so.
2)If you leave your job, do you lose all of your coverage? It may or may not be something that you can keep. It is very possible that in order to keep it as term insurance, you will have to show evidence of insurability. You may be able to convert it to permanent insurance, but expect to pay significantly more money. I think, but am not certain, that you won't be able to keep your employer paid portion of coverage.
3)It has been a number of years since I've explored it, but I have sold policies to people who had terminal diseases. I'm not sure if these policies still exist for decent amounts. Basically, they are graded death benefit guaranteed issue policies. In English, for the purpose of this discussion, it typically means that if you die within 2 years, you would get the premiums back + interest, and after that, the full death benefit would be paid. If I recall correctly, they made sense for people who realistically were not going to live for 10 years.

SSDI:
1)This may be useless to you. If your long term disability policy is through work, it is going to integrate with SSDI. Collecting $1,000 from SSDI will reduce your group DI benefit by $1,000.

Here is the cautionary tale for everyone:
1)Not only is getting life insurance through work usually more expensive, it is dangerous. It is very possible that the coverage will force someone to remain employed when they want to be with their family or take a different job. If one can't/doesn't remain employed, they may lose coverage.
2)Group disability coverage will be lost when one leaves their job. The contractual terms make collecting in the best of situations difficult. For example, if the OP is capable of working part time, there is a very good chance that despite being terminal, he may not be disabled.

Please, everyone, get your life insurance outside of work and, if possible (often it isn't), try to do the same with DI.

One of the things that the OP said was something along the lines of "If I knew that I was going to die in 30 days (or 60 or 90 or whatever), I would quit and spend all of my time with my family." We all feel that way. Having coverage through work may very well take away this option.

turtlebug said:   suezyque said:   turtlebug said:   suezyque said:   Kashisti said:   suezyque said:   My brother lost his wife to cancer 4 years ago. The SS survivor benefits for his 3 children were $1000K each/month. They were 8,9 and 11 at her death. They will receive those benefits until the age of 18.

I'm very sorry for your brother's loss, and for the information. I imagine that only my three biological children would be eligible for the benefits. My step-son (9 year-old) lives with me full-time. My wife has full legal custody. I have zero legal custody.

Actually, if he were eligible for benefits - I would think that the system was even more broken that I used to!


You can adopt him and then I'm sure he would qualify.

I don't think the 9yo's dad would like that.


Under the circumstances, I think he would understand.

Why would he agree to do so? Also, in consenting to an adoption, the noncustodial parent relinquishes all parental rights and responsibilities, including child support.



Yes, that is correct. If the child support is greater than the SS benefit, it wouldn't benefit them to adopt the child. If it's the other way around, they adopt the child and gain the survivor benefit upon death of the OP. If the child's natural father is willing to relinquish his parental rights, he is also off the hook for the support, which may be of interest to him. Yes, the natural father loses his rights, but it sounds as if everyone gets along and does things for the best interest of the child. Not to be cold, but the OP's tumor has been classified as terminal and he won't be around in the future as a father to this child. This could all be done without the child's knowledge, so that the child doesn't have hard feelings regarding the natural fathers choice to relinquish his rights.

I was eligible under my step father's health insurance when living with him and my mother a few years ago. I believe I was 19. I'm in NYS if that matters. She had full custody..

jaytrader said:   I was eligible under my step father's health insurance when living with him and my mother a few years ago. I believe I was 19. I'm in NYS if that matters. She had full custody..


Health insurance and SS survivor benefits are much different.

Gertrude23 said:   The main thing that comes to my mind is the television-advertised insurance that says "no medical questions/you can't be turned down." Now that may be because they'll charge you too much to even consider it, but it may be worth a shot.

Secondly, I'm so very sad to read of your situation. Central Virginia is a somewhat vague area, but if you are near Lynchburg, I am down the street. PM me. Seriously. You can vet me and I'll be glad to help in whatever way I can. Blessings to you...


Most of this is for older ages, but if there is something that he can get, it makes sense. He will need "guaranteed issue" as opposed to "no medical exam". "No medical exam" does not mean "no medical questions".

suezyque said:   jaytrader said:   I was eligible under my step father's health insurance when living with him and my mother a few years ago. I believe I was 19. I'm in NYS if that matters. She had full custody..


Health insurance and SS survivor benefits are much different.

Sorry, I was responding to the first page. Someone said something about health insurance and step-children. Perhaps I misread. My bad!

Edit: Yep. I misread.

soundtechie said:   My condolences.

You won't be able to get payment protection, or additional life insurance, due to the diagnosis. If your buy up is less than two years old, the insurance company may try to wiggle out of it. Your wife needs to get a job. SSA won't provide you with health insurance, so keep your job as long as you can.


As long as he answered the questions honestly, he will be fine. Even if the answers aren't perfect, as long as it isn't something that would have caused him to get turned down, he'll still be fine. Even if he likely had the brain tumor at the time that he applied (but didn't know it), he will be fine.

lazypinkmonkey said:   You said "We have a few credit cards". Are these joint cards with your wife or in your name only? Not sure how to say this but if you feel the time is coming close to where you wont make, max them out (cash advance, buy stuff your family will need) and then stick the bill to the credit card companies, only if they are in your name only. The credit card companies can only go after your estate if it has money in it, they cant go after your wife or her life insurance inheritance. Just an idea, of course not ethical but....

edit: 3 of the same ideas all within 2 minutes of each other


We have no joint cards. I have two cards, she is an "authorized user" on one of them. She has one card. I am an "authorized user" on it.

Kashisti said:   
We have no joint cards. I have two cards, she is an "authorized user" on one of them. She has one card. I am an "authorized user" on it.


Hey, please check your PMs.

Here's some information that you might find useful. Benefits can be paid to stepchildren under certain circumstances. You may want to look into that further.

Text

As you plan for the future, you'll want to think about what your family would need if you should die now. Social Security can help your family if you have earned enough Social Security credits through your work.

How You Earn Social Security Survivors Benefits

You can earn up to four credits each year. In 2013, for example, you earn one credit for each $1,160 of wages or self-employment income. When you have earned $4,640, you have earned your four credits for the year.

The number of credits needed to provide benefits for your survivors depends on your age when you die. The younger a person is, the fewer credits he or she must have for family members to receive survivors benefits. But no one needs more than 40 credits (10 years of work) to be eligible for any Social Security benefit.

However, benefits can be paid to your children and your spouse who is caring for the children even if you don't have the required number of credits. They can get benefits if you have credit for one and one-half years of work (6 credits) in the three years just before your death.

Your unmarried children who are under 18 (up to age 19 if attending elementary or secondary school full time) can be eligible to receive Social Security benefits when you die.

And your child can get benefits at any age if he or she was disabled before age 22 and remains disabled.

Besides your natural children, your stepchildren, grandchildren, step grandchildren or adopted children may receive benefits under certain circumstances.

corporateclaw said:   Glitch99 said:   It may be too soon, but look to draw credit card advances for cash to pay off the mortgage, etc. The life insurance will be hers, don't plan to use it to pay off your debts.

Yeah, while OP doesn't sound like he wants to abuse this, and while it may be basic knowledge among the FWF crowd, twice in my life now, I've had the spouse of a recently deceased husband mention to me about how much CC debt they had and how she's having an impossible time paying it back with him gone. Even if you don't want to abuse it, make sure she is aware that CCs in your name are not a debt she needs to worry about generally.
But the estate does. Unless, all the assets move directly out of the estate or credit card life insurance pays it off

But, still, I don't know that this fundamentally changes the situation

Thank you everyone for your input so far - this is all really and truly helpful.

I'll update the OP, but I'll add it here since it's been the topic of many replies - I just created account over at the SSA website and checked my benefits status. I also ran through the online calculator using my old tax records and got a fairly similar result.

Survivor Benefits - Child: $1,492
Survivor Benefits - Spouse: $1,492
Total Maximum Family Benefits: $3,481

While it would certainly be a thorny subject, we do have a very good relationship with my son's bio-dad (as I call him). The child survivor benefit is greater than the child support payment, so it would normally be advantageous to my wife. That family maximum makes it a moot point, however. She'll max out her benefits before his benefit would be considered.

I don't know what makes that max benefit change over time, but from the light reading I did it doesn't sound like it would move too significantly in the near future.

BrodyInsurance said:   ...Please, everyone, get your life insurance outside of work and, if possible (often it isn't), try to do the same with DI.

One of the things that the OP said was something along the lines of "If I knew that I was going to die in 30 days (or 60 or 90 or whatever), I would quit and spend all of my time with my family." We all feel that way. Having coverage through work may very well take away this option.
This is worth repeating! The same calculation crossed my mind too but as a single guy this issue never quite raised to the level where I did anything about it.

BrodyInsurance said:   My prayers are with you, but please allow me to try to just get right to the chase and give some advice. My focus will be strictly on the life and disability insurance issues.

The advice is designed to try to help you, but it also should serve as a cautionary tale for others.

Your basic situation is 1) you are uninsurable and 2)you might die within the next two years. That second part is true for all FWF readers and we are all insurable until that very day that we are not.

Questions:
Long Term Disability Insurance:
1)Is your long term disability insurance through work? If so, if you can make any of the following changes either now or at open enrollment, make the changes!
A)Increase the benefit.
B)Shorten the elimination period.
C)If your employer is paying the premium, see if you can find the way for you to pay it. For instance, maybe your employer can up your salary and then have you pay for it.
D)If you are paying the premium, pay it post tax and not pre tax. (C and D are so that the benefits would be tax free.)
E)"Terminal Illness" does not equal "disabled". Being disabled is all about the contract. What does your contract say? Does your policy expire as soon as you separate from your employer? For example, you get to the point where you realistically know that are not going to survive. You are still capable of working part time. However, obviously, you would rather use that energy to spend as much time as possible with your wife and children. If you quit to do this, would you lose your disability insurance?

Short term disability insurance:
1)If you can add it, do it!

Life Insurance:
1)If you can get any additional coverage through open enrollment, do so.
2)If you leave your job, do you lose all of your coverage? It may or may not be something that you can keep. It is very possible that in order to keep it as term insurance, you will have to show evidence of insurability. You may be able to convert it to permanent insurance, but expect to pay significantly more money. I think, but am not certain, that you won't be able to keep your employer paid portion of coverage.
3)It has been a number of years since I've explored it, but I have sold policies to people who had terminal diseases. I'm not sure if these policies still exist for decent amounts. Basically, they are graded death benefit guaranteed issue policies. In English, for the purpose of this discussion, it typically means that if you die within 2 years, you would get the premiums back + interest, and after that, the full death benefit would be paid. If I recall correctly, they made sense for people who realistically were not going to live for 10 years.

SSDI:
1)This may be useless to you. If your long term disability policy is through work, it is going to integrate with SSDI. Collecting $1,000 from SSDI will reduce your group DI benefit by $1,000.

Here is the cautionary tale for everyone:
1)Not only is getting life insurance through work usually more expensive, it is dangerous. It is very possible that the coverage will force someone to remain employed when they want to be with their family or take a different job. If one can't/doesn't remain employed, they may lose coverage.
2)Group disability coverage will be lost when one leaves their job. The contractual terms make collecting in the best of situations difficult. For example, if the OP is capable of working part time, there is a very good chance that despite being terminal, he may not be disabled.

Please, everyone, get your life insurance outside of work and, if possible (often it isn't), try to do the same with DI.

One of the things that the OP said was something along the lines of "If I knew that I was going to die in 30 days (or 60 or 90 or whatever), I would quit and spend all of my time with my family." We all feel that way. Having coverage through work may very well take away this option.


Wow, thank you for all of this information. I really appreciate it. I've already requested hard-copies of all my policies from work (I think I sent my request about two hours after my diagnosis!). Frankly, I wasn't sure what kind of things to look for, so this is very helpful. I'll post a follow-up with what I find.

Kashisti said:   Thank you everyone for your input so far - this is all really and truly helpful.

I'll update the OP, but I'll add it here since it's been the topic of many replies - I just created account over at the SSA website and checked my benefits status. I also ran through the online calculator using my old tax records and got a fairly similar result.

Survivor Benefits - Child: $1,492
Survivor Benefits - Spouse: $1,492
Total Maximum Family Benefits: $3,481

While it would certainly be a thorny subject, we do have a very good relationship with my son's bio-dad (as I call him). The child survivor benefit is greater than the child support payment, so it would normally be advantageous to my wife. That family maximum makes it a moot point, however. She'll max out her benefits before his benefit would be considered.

I don't know what makes that max benefit change over time, but from the light reading I did it doesn't sound like it would move too significantly in the near future.


$3481/month plus your life insurance will go a long way to helping your family survive in your absence. I commend you in taking these steps for their health and safety. You sound like a very unselfish person and your family is fortunate you are in their lives.

OP, you can change your benefits at two points in time
1) Annual plan year
2) Life event

Life events are things like employment of spouse, unemployment of spouse, birth of child. Consult your HR for full definitions. In general, if income increases / expenses decrease you can, but are not required to reduce your benefits. And in general, if income decrease / expenses increase you can but are not required to increase benefits

Can you force two life events? Specifically
1) Wife gets employed. You make no changes in benefits
2) Wife quits employment. You use the opportunity to make all the changes that you can. Get ST Disability. Increase LTD, increase life insurance.etc

suezyque said:   Kashisti said:   Thank you everyone for your input so far - this is all really and truly helpful.

I'll update the OP, but I'll add it here since it's been the topic of many replies - I just created account over at the SSA website and checked my benefits status. I also ran through the online calculator using my old tax records and got a fairly similar result.

Survivor Benefits - Child: $1,492
Survivor Benefits - Spouse: $1,492
Total Maximum Family Benefits: $3,481

While it would certainly be a thorny subject, we do have a very good relationship with my son's bio-dad (as I call him). The child survivor benefit is greater than the child support payment, so it would normally be advantageous to my wife. That family maximum makes it a moot point, however. She'll max out her benefits before his benefit would be considered.

I don't know what makes that max benefit change over time, but from the light reading I did it doesn't sound like it would move too significantly in the near future.


$3481/month plus your life insurance will go a long way to helping your family survive in your absence. I commend you in taking these steps for their health and safety. You sound like a very unselfish person and your family is fortunate you are in their lives.


Thank you very much - taking whatever steps for them I can now has really helped me feel like I have sort of control over this disease. Sometimes I wonder what state of mind I'd be in right now if I didn't have my family - and not just from a support standpoint, but from a "I'm no longer the self-absorbed, single male that I used to be" as well. Who knows, maybe have something worth fighting for might make a difference in my longevity. A guy can hope!

Hey, OP. Not sure if you're ignoring me or just didn't see...can you please check your PMs?

ellory said:   Kashisti said:    The life insurance is $220,000.00. If these are all your assets that will be liquid, you have a serious problem

Best case, you can spend 4% per year of an amount and expect that it will last 20-30 years or more

4% of $220K is $8800. A year. That's $700 a month.

Assuming you have paid in to Social Security your kids (and maybe your wife, haven't checked lately) are entitled to Survivors Benefits

Figure out what that is. Add that to the $700 per month. That's what your wife and kids have to live on. Food, mortgage, medical, everything

Now make a budge of your current expenses. Mortgage, property tax, everything.

The gap between that income number and the expenses needs to closed. Ruthlessly. You said that you don't think she can find anything cheaper than our current payment ($1,600/month).

Not to be harsh, but the mortgage payment alone will consume most or all of your life insurance allocation + social security survivors benefits.

Do you see how untenable the financial position is? If there is nothing cheaper around where you are, you may really need to move to a much lower cost area.


I am sure that your math is correct, but I'm not so sure that this is really the way to go about it. Of course, there really isn't a "right" way.

The children are used to having a stay at home mom. If they lose their dad, it becomes even more important for mom to be around more. This is doubly true when the dad is an involved dad.

At 4%, the money certainly could realistically last for 30 years or more, but without enough of it, I don't think that is the way to go.

Also, losing a parent is hard enough, it isn't the time to be moving houses, changing schools, losing extra curricular activities, etc. The best course of action is to have enough life insurance, but that can't be corrected.

In general, changes following a traumatic event should be minimized. It simply isn't the time to make decisions. If I was the OP, this is what I would tell my wife to do with the money. We would make a realistic budget that would allow the family to maintain the exact same standard of living. We would figure out what SS will pay and take it from there.

Ex. The family spends/will spend $5,000 month. SS will pay $3,000. She needs $2,000/month. I would instruct her to take $48,000 and put it in checking/savings..enough for 2 years. The rest would be put away very conservatively for now. When she's ready, and I would assume that it would be at least a year, it would then be time to start thinking of making some decisions. The insurance money won't be enough to support the family. It will only be enough to buy some time and to supplement her eventual income. Cutting back may very well be needed, but it can/should wait.

Suggest you work a budget that has her live on less than 3481, and puts some of that away for savings. The monies will fall over very quickly when the kids become 18

Don's spend the life insurance - treat it as a start for her retirement

BrodyInsurance said:   

I am sure that your math is correct, but I'm not so sure that this is really the way to go about it. Of course, there really isn't a "right" way.

The children are used to having a stay at home mom. If they lose their dad, it becomes even more important for mom to be around more. This is doubly true when the dad is an involved dad.

At 4%, the money certainly could realistically last for 30 years or more, but without enough of it, I don't think that is the way to go.

Also, losing a parent is hard enough, it isn't the time to be moving houses, changing schools, losing extra curricular activities, etc. The best course of action is to have enough life insurance, but that can't be corrected.

In general, changes following a traumatic event should be minimized. It simply isn't the time to make decisions. If I was the OP, this is what I would tell my wife to do with the money. We would make a realistic budget that would allow the family to maintain the exact same standard of living. We would figure out what SS will pay and take it from there.

Ex. The family spends/will spend $5,000 month. SS will pay $3,000. She needs $2,000/month. I would instruct her to take $48,000 and put it in checking/savings..enough for 2 years. The rest would be put away very conservatively for now. When she's ready, and I would assume that it would be at least a year, it would then be time to start thinking of making some decisions. The insurance money won't be enough to support the family. It will only be enough to buy some time and to supplement her eventual income. Cutting back may very well be needed, but it can/should wait.
Well stated, and I certainly understand your points. I really worry about running out money. The longer that gets put off the deeper the cuts become

But, it is certainly true as the kids get older they need less expensive care when their Mom is not around

Its a tough problem and once again, I can see you are a gem among insurance agents

ellory said:   Squeezer99 said:   

#1: They have 4 young kids. If the wife works, all of her money will go to day care. There is almost no point in her working.
#2: If he dies, they will likely qualify for medicaid.

Your other points are valid. I would think that his wife should start contacting his and her family and let them know about the situation and that assistance may be required.
Excellent points

Run the numbers. Investigate medicaid, food stamps, and understand the income and asset limits and the rules. If there are asset limitations, make sure the income assets don't go into your wife's name, and move them elsewhere. Perhaps a trust.

Investigate Obama care and whether that helps

Make sure the distributions are small enough not to trigger reduction in benefits. Again, the house she is in may very well be out of the question
I was thinking trust too - OP's goal should be to set up everything so that if death occurs, his desires are carried out, taxes are minimized, and assets are protected the best that they can be.

OPs, the wife may need to move... you said that housing is $1600/mo. That seems steep. Might need to move far away. Maybe to another town or out of state. Where is family? She'll need them - if nothing else to help take care of the kids, not to mention emotional support. Help her with the move when you're still strong, although one of the best ways you can help her is to continue working to sock away money, so that could get tricky.

A few jobs out there help cover the cost of day care. Otherwise family is typically free.

Marc







Marc

jaytrader said:   Hey, OP. Not sure if you're ignoring me or just didn't see...can you please check your PMs?

I apologize for the delay in getting back to you - jumping between this thread, work and my wife/kids. I just sent you a response now.

OP sorry to hear about your diagnosis and best of luck with your fight against it.

I hope your wife doesn't have to activate this benefit but the credit protector feature on most CC's (Citi and others) will waive off the balance in the event of death of the card holder. Enrollment in that means that there will be a small; percentage (like 1% of statement balance) as credit protector fees.

Of course one way to avoid this is to pay off the balance before the statement is generated (I think that will avoid it, others can chime in if I am incorrect).

Might this be useful to have?

I feel that a FWF collection is in order, here.

Please send donations to donateKashisti@gmail.com. I have setup a PayPal donations account. Please contribute anything extra that you can. The funds will go to OP's family on a future date. I have spoken to the OP and as prideful as he is, he reluctantly agreed to let me do this favor for him.

Background: my mother survived non-Hodgkin Lymphoma when she was a teenager and was told she could never have children. Today marks her 45th birthday and she has four healthy children and has had a great life thus far. Thankfully, she has remained in remission. However, as a child, I was always helping out with Camp Good Days events and fundraisers and I got very close with the "cancer community." I donate to St Jude's children's research hospital every year.

Needless to say, when something like this happens, it really hits home for me. I have seen my mother go through many tough times with her friends and family that have been affected by cancer.

Let's do this for OP's family and children.

-jaytrader

PS: If the FWF administration team has an issue with this, please contact me ASAP.

ellory said:   BrodyInsurance said:   

I am sure that your math is correct, but I'm not so sure that this is really the way to go about it. Of course, there really isn't a "right" way.

The children are used to having a stay at home mom. If they lose their dad, it becomes even more important for mom to be around more. This is doubly true when the dad is an involved dad.

At 4%, the money certainly could realistically last for 30 years or more, but without enough of it, I don't think that is the way to go.

Also, losing a parent is hard enough, it isn't the time to be moving houses, changing schools, losing extra curricular activities, etc. The best course of action is to have enough life insurance, but that can't be corrected.

In general, changes following a traumatic event should be minimized. It simply isn't the time to make decisions. If I was the OP, this is what I would tell my wife to do with the money. We would make a realistic budget that would allow the family to maintain the exact same standard of living. We would figure out what SS will pay and take it from there.

Ex. The family spends/will spend $5,000 month. SS will pay $3,000. She needs $2,000/month. I would instruct her to take $48,000 and put it in checking/savings..enough for 2 years. The rest would be put away very conservatively for now. When she's ready, and I would assume that it would be at least a year, it would then be time to start thinking of making some decisions. The insurance money won't be enough to support the family. It will only be enough to buy some time and to supplement her eventual income. Cutting back may very well be needed, but it can/should wait.
Well stated, and I certainly understand your points. I really worry about running out money. The longer that gets put off the deeper the cuts become

But, it is certainly true as the kids get older they need less expensive care when their Mom is not around

Its a tough problem and once again, I can see you are a gem among insurance agents


Thanks, Ellory. Part of this very much revolves around his wife's ability to earn an income. If she really has a limited ability, cut backs will certainly be needed and the life insurance might have to be looked upon as something that needs to last for a very long time. If that is the case, cut backs may be needed fairly quickly. If possible, the idea is still to minimize change for the family. "If possible" isn't always possible. If she has the ability to support the family on her own, life insurance has a much better chance to be something that just buys time until she can do so.

One notion that fortunately hasn't come up is that of getting remarried. Lots of people say/think, "I don't need that much coverage. My wife is attractive and will get remarried." A grieving widow with 4 kids is nobody's idea of a catch. This is even more true when she needs financial support. The best chance for a widow to get remarried to a wonderful husband and father figure to the kids is for that woman to be in a position that she can marry for love and not for money.

Kashisti said:   
  • We closed on a new-construction home in mid-December - about two weeks before learning of the brain tumor.
  • We have a 30-year fixed rate mortgage at 3.25% through a USDA Rural Development loan. We put $10,000 down. The original loan amount was $283,500.00.
  • I am the only one on the mortgage note. My wife is not on the note. My wife and I are both on the title - I think it's "Joint Survivorship", but I could be mistaken if that sounds wrong.
  • The loan closed on 12.20.2012. Wells Fargo bought it from our broker less than 30 days ago (I think it was less than 30 days ago...)
  • We did not purchase any sort of mortgage payment protection, etc.


I received solicitations for HELOC payment protection after having it for a while. Your mortgage may be similar. I don't know, but I got the impression that it might be such a ripoff they didn't bother with any medical questions. If you really knew you'd be offered this if you refi'ed the mortgage, presumably it would be worth it.

I saw glitch mentioned it above, but I don't think too many people stressed it enough.

Start establishing your wife's credit. Get her credit going strong now while it's easier. This doesn't mean racking up any debt for her or making any interest payments. That is not necessary to build up a strong credit report.

I would also persue getting her name off of any debt so it's all in your name. It's much easier for her to brush off the creditors if her name is not even on it to begin with.

It has been awhile, but there have been threads on FWF discussing credit cards and their no-questions-asked death benefits. For many, the topic was too "morbid" or "unethical". For the most part, most FWF members concluded the use of such benefits as "legal". The thread that I remember most was started by a cancer patient looking out for his wife.

Following glitch's advice further, you can probably start putting together a strategy to get all the existing debt out of your wife's name, and your name off of all the assets. Perhaps using unsecured debt in your name only to pay down the mortgage.

And last, but not least, Good Luck. Don't hesitate to read up on everything, question your doctors, or get second/third opinions.

I voted this thread green because the way OP laid out it out, this might be the first one that is truly reference worthy. Thanks.

gatzdon said:   I saw glitch mentioned it above, but I don't think too many people stressed it enough.

Start establishing your wife's credit. Get her credit going strong now while it's easier. This doesn't mean racking up any debt for her or making any interest payments. That is not necessary to build up a strong credit report.

I would also persue getting her name off of any debt so it's all in your name. It's much easier for her to brush off the creditors if her name is not even on it to begin with.

It has been awhile, but there have been threads on FWF discussing credit cards and their no-questions-asked death benefits. For many, the topic was too "morbid" or "unethical". For the most part, most FWF members concluded the use of such benefits as "legal". The thread that I remember most was started by a cancer patient looking out for his wife.

Following glitch's advice further, you can probably start putting together a strategy to get all the existing debt out of your wife's name, and your name off of all the assets. Perhaps using unsecured debt in your name only to pay down the mortgage.

And last, but not least, Good Luck. Don't hesitate to read up on everything, question your doctors, or get second/third opinions.

I voted this thread green because the way OP laid out it out, this might be the first one that is truly reference worthy. Thanks.

Not to discount any of the above advice, but I suggest OP find an estate planning attorney ASAP. For example, if OP lives in a community property state, then that might affect the spouse's protection from debt under only OP's name. There might be other asset/debt protection strategies to consider that a good attorney would know of.

My sympathies are with you, OP.

ETA: An estate planning attorney can also obviously help with oher matters, such as Trust setup, wills, DNRs, and other documentation.

donatekashisti.org

donate. I did.

With the SSI, the wife would get $1492 per month for the rest of her life, correct? But I believe the children would only get it until they reach age 18. Each child would get $1492 but obviously the cap is there. IIRC, the eligible children would each get a check for their portion of the $1989. As each child turns 18, the monies would then be divided among the remaining eligible children.

I'm not positive about this but I believe the above is correct. Correct me if I am wrong.

Responding to a few replies at the same time...

BrodyInsurance said:   

I am sure that your math is correct, but I'm not so sure that this is really the way to go about it. Of course, there really isn't a "right" way.

The children are used to having a stay at home mom. If they lose their dad, it becomes even more important for mom to be around more. This is doubly true when the dad is an involved dad.

At 4%, the money certainly could realistically last for 30 years or more, but without enough of it, I don't think that is the way to go.

Also, losing a parent is hard enough, it isn't the time to be moving houses, changing schools, losing extra curricular activities, etc. The best course of action is to have enough life insurance, but that can't be corrected.

In general, changes following a traumatic event should be minimized. It simply isn't the time to make decisions. If I was the OP, this is what I would tell my wife to do with the money. We would make a realistic budget that would allow the family to maintain the exact same standard of living. We would figure out what SS will pay and take it from there.

Ex. The family spends/will spend $5,000 month. SS will pay $3,000. She needs $2,000/month. I would instruct her to take $48,000 and put it in checking/savings..enough for 2 years. The rest would be put away very conservatively for now. When she's ready, and I would assume that it would be at least a year, it would then be time to start thinking of making some decisions. The insurance money won't be enough to support the family. It will only be enough to buy some time and to supplement her eventual income. Cutting back may very well be needed, but it can/should wait.


This type of plan sounds fairly do-able to me. She realizes that she can't eat bon-bons on the couch forever, nor would she be content to do that. But you're right about those practical concerns. The cost to benefit ratio gets raised for me when I think about what it would take for her to carry out some of these steps on Day 1. I think it's fairly realistic for her to plan on an adjustment period, followed by making these tough choices when she's emotionally ready.

Of course, that path will likely conflict directly with the FWF-optimum way, and I get that. That's what makes getting all of this input so interesting.

ellory said:   Suggest you work a budget that has her live on less than 3481, and puts some of that away for savings. The monies will fall over very quickly when the kids become 18

Don's spend the life insurance - treat it as a start for her retirement


Agreed - from the time when we realized we were financially screwed in 2008 we've been living as frugally as possible. We've been saving no less than $1000/month out of my take home pay for years, and we still are. Some of that went to the down payment on our home, of course, but it's building back up now.

If childcare isn't an issue, I think our monthly budget would actually go down. We have basically zero-flex built in to our budget right now - maybe a pizza for the kids once a month. Everything else we save. If/when I pass away, at a minimum our cell phone bill and our grocery bill will both go down. Yes, I realize health insurance and other expenses will go up...just sayin'.

mrand said:   
I was thinking trust too - OP's goal should be to set up everything so that if death occurs, his desires are carried out, taxes are minimized, and assets are protected the best that they can be.

OPs, the wife may need to move... you said that housing is $1600/mo. That seems steep. Might need to move far away. Maybe to another town or out of state. Where is family? She'll need them - if nothing else to help take care of the kids, not to mention emotional support. Help her with the move when you're still strong, although one of the best ways you can help her is to continue working to sock away money, so that could get tricky.

A few jobs out there help cover the cost of day care. Otherwise family is typically free.

Marc


I suppose $1,600 could seem steep. We *just* finished building our "dream house". We planned to grow old and die here - so part of that will be true (sorry for the morbid touch of humor). It's a 5 bedroom, 3400 sq. ft. single family home within commuting distance of Washington, DC, so the payment is fairly good. We also don't have any PMI to speak of, so that's helpful. As a comparison, our last apartments were 4 bedroom, 1200 sq. ft. and 4 bedroom, 1300 sq. ft. and were $1,500 per month and $1,700 per month, respectively. Also, they were not "luxury" apartments or what-have-you. Just middle of the road places. I have no doubt that she could find some place at $1,000/month, but as was mentioned earlier, I don't think the $600/month in savings is worth the trauma of my kids going from the single rooms they now know to all sharing one, cramped room. As far as location goes, we couldn't be in a better place. We're essentially equidistant from my parents and her parents. Viable job options for her are in our parents' towns anyway. Also, where we are now is fairly rural. There are no apartments here, and the cost of living is a bit cheaper than either parents' town.

As far as her job - I believe because of the way we handled things back when she had to resign, she's got somewhat of an open-door invitation back in to the company. We're lucky there, too - she put 13 years in for this company, and they are a major national company with the benefits to prove it. We've discussed putting feelers out to them, but we're both fairly confident that she'd be able to get a position there again fairly quickly, and with minimal effort.

OP - my heart goes out to you & your family.

A public service announcement for others - especially those under 40 with a family. If you don't have adequate life insurance, don't wait. I was diagnosed with something at a relatively young age that made life insurance difficult to get or cost-prohibitive. I always thought I could wait to get it until later since I was very healthy. But I was wrong.

gatzdon said:   I saw glitch mentioned it above, but I don't think too many people stressed it enough.

Start establishing your wife's credit. Get her credit going strong now while it's easier. This doesn't mean racking up any debt for her or making any interest payments. That is not necessary to build up a strong credit report.

I would also persue getting her name off of any debt so it's all in your name. It's much easier for her to brush off the creditors if her name is not even on it to begin with.

It has been awhile, but there have been threads on FWF discussing credit cards and their no-questions-asked death benefits. For many, the topic was too "morbid" or "unethical". For the most part, most FWF members concluded the use of such benefits as "legal". The thread that I remember most was started by a cancer patient looking out for his wife.

Following glitch's advice further, you can probably start putting together a strategy to get all the existing debt out of your wife's name, and your name off of all the assets. Perhaps using unsecured debt in your name only to pay down the mortgage.

And last, but not least, Good Luck. Don't hesitate to read up on everything, question your doctors, or get second/third opinions.

I voted this thread green because the way OP laid out it out, this might be the first one that is truly reference worthy. Thanks.


Good advice, and some on which I'll ask for clarification.

Her credit is not as established as mine, but it's been getting there. Her credit score (last time we checked) was around 680. She has no secured debt in her name (again, the car and house are only in my name). She only has a single credit card in her name, and that has a zero balance. I've got two credit cards, one with a zero balance and one with less than $1000 on a $7500 limit. She does have an authorized user card.

How do we go about building her credit, while not moving any secured debt to her, while also not adding any unsecured debt to her name? Credit cards with no balance? Monthly expenses charged and paid-off each cycle?

jaytrader said:   I feel that a FWF collection is in order, here.

Please send donations to donateKashisti@gmail.com. I have setup a PayPal donations account. Please contribute anything extra that you can. The funds will go to OP's family on a future date. I have spoken to the OP and as prideful as he is, he reluctantly agreed to let me do this favor for him.

Background: my mother survived non-Hodgkin Lymphoma when she was a teenager and was told she could never have children. Today marks her 45th birthday and she has four healthy children and has had a great life thus far. Thankfully, she has remained in remission. However, as a child, I was always helping out with Camp Good Days events and fundraisers and I got very close with the "cancer community." I donate to St Jude's children's research hospital every year.

Needless to say, when something like this happens, it really hits home for me. I have seen my mother go through many tough times with her friends and family that have been affected by cancer.

Let's do this for OP's family and children.

-jaytrader

PS: If the FWF administration team has an issue with this, please contact me ASAP.


It seems awfully self-serving to give this post Green, so I'll just say thank you again - my wife and I have been truly moved by the response I've already received in this thread.



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