5 Things You Need To Do When Your Spouse Is Ill, According To A Financial Planner

No one wants to think about what life might be like without the companionship and support of a spouse they've spent years beside. You and your partner form a team that has experienced the highs and lows of life together. That's a powerful thing, and it makes major illnesses and other setbacks later in life a bitter pill to swallow. Unfortunately, hardships will come to meet all of us at some point, and for retirees, this can frequently come in the form of a difficult diagnosis. Caring for a sick spouse is hard enough already, but without a few key financial elements put into position at the outset of news like this, bad news can effectively deliver a combination of blows that are difficult to recover from.

In a piece published by Kiplinger in September 2025, Evan T. Beach, a certified financial planner, spells out the five most important steps to take for financial stability when the worst comes to pass. No one wants to focus on preparing financially to carry on with a sick or lost spouse, but Beach says that this is a must: "these things may understandably be the furthest from your mind, but I view them as non-negotiables." By at least taking stock of these five action items, you'll place yourself in a position to carry on, no matter what the outcome of the treatment plan might be. "You'll be so much better off if you take care of these things right now," the article notes. Fortunately, none of these tasks are particularly time consuming or mentally demanding.

It's important to set out basic guidelines for how you want your assets distributed after you pass. This is something that anyone can do, regardless of age. It's also a task that becomes more important both as you age and as your life becomes more complicated (for instance, having numerous children or taking on a support role for a parent, sibling, or other family member). It's a good idea to set out a will before you enter retirement, alongside a few other important items and services you might want to invest in at this stage. However, Beach points out that "Most people think of a will as a tool to transfer assets. And it can be. However, in this context, the most important parts of your legal documents don't have to do with asset transfer."

He suggests that other elements of the legal documentation process are even more important when one spouse falls ill. Legal frameworks such as a "medical [power of attorney] POA allows you to make health care decisions on behalf of your spouse." If you don't jointly own all of your assets, financial POA documents "make sure you can pay the bills for the things that aren't titled in your name." Finally, he adds that "in the worst-case scenario, a will names a guardian for minor children."

While you're sitting down with an attorney to review or augment your estate planning documents, it's also a good idea to revisit the ownership and beneficiary status of key accounts and assets. Beach warns that "things like retirement accounts, life insurance policies, and annuity contracts will default to your beneficiaries. Your home, your bank accounts, and your taxable investment accounts will not." This means that you'll need to spell out specific instructions to grant access to bank accounts and other important financial tools in the event of a death in your partnership. The last thing you want is for an illness to ultimately lock one spouse out of their partner's accounts, if even temporarily.

Beach advises that many clients he works with use trusts to protect and streamline the transfer of access and assets to others. There's an important difference between a will and a trust in that the trust technically owns the things that are reassigned and placed into it while your will simply outlines instructions for the assets you possess. As such, a trust won't be the best tool for everyone, but the reality is that anyone can set one up for their spouses and family members. Beach adds that "it makes sense to simplify where possible. You may have five different 401(k)s that tell your career story. Modern brokerages have made it possible and easy to consolidate." This makes it easier to find assets later on, potentially when someone unfamiliar with the specifics of your household's finances has to sort through what's been left behind.

Beach bought term life insurance in 2014 and 2021 and said "Outside of the death benefit and the terms, I can tell you very little about my policies. Even for those in the weeds, like me, once this box is checked it is as easy to forget as your middle kid's birthday." It's not always advisable to buy into new life insurance products after you retire, but maintaining existing policies might serve your household well, especially if the subject of a policy has fallen ill. Keeping the details of coverage tools straight is important because failing to pay the monthly bill through an oversight or change in banking details or strategies can leave you out in the cold when it comes time to collect the benefit.

According to Beach: "You'll want to review any long-term care, disability, and life insurance policies to ensure you have adequate coverage but also to make sure that the address, billing information and beneficiaries are up to date." These are simple steps aimed at confirming details and ensuring continuity as things in your life become more complicated. But taking the time to work through this part of the checklist can mean the difference between a major financial payout that helps support the other spouse or a compounding effect in which financial instability and grief both plague the home.

As is the case with disparate accounts and complex collections of assets, the passwords that unlock your financial tools can either be an easy step or something that's wickedly difficult to work through. "When you visit an estate attorney, they will ask for an inventory of your assets and liabilities," Beach says. Working with a financial professional is great, but that doesn't mean you shouldn't be doing your own work on your accounts, assets, and obligations outside of that relationship. Keep a list of your passwords, accounts, and other key data points. Beach also suggests using support tools to make this process even simpler: "There are plenty of software solutions out there that can help you track this and will help you make sure everything is accounted for if your spouse passes."

Passwords and locations for accounts are just one piece of the puzzle. "Beyond financial assets, you'll want to inventory your personal property. Things like jewelry can pass via a will or trust but often can be left via a side letter of instruction," he adds. This means that some desires can be crystallized as simple decrees and others require a little more logistical planning. Either way, taking the time to review your wishes and taking stock of things can streamline any future distribution tasks that may be headed your way.

Finally, Beach notes that illness and the potential aftershocks can leave retirees particularly vulnerable for a range of financial reasons that might not be immediately obvious. Losing a spouse, he says, "can be extremely disruptive to your monthly cash flow." This much isn't a surprise, but the ways in which you'll see your financial picture change come in hard and heavy. "You'll drop to one Social Security benefit and may lose a pension, but you don't get an equal reduction in your expenses," he adds.

Working around this problem can be accomplished in a few ways. For one thing, you might consider investing in an annuity with some of the capital you do have before your household dynamics change. It can also be beneficial to consider a reverse mortgage or other tools that can deliver either an additional, monthly stream of income or a lump sum payout that can act as another pillar alongside your IRAs or 401(k)s. Regardless of the path that works for your specific needs, Beach suggests that "it's better if this is not a surprise after the fact. You'll want to make sure that you can maintain your current lifestyle or at least know what you would have to do to live a life you're comfortable with."