Part of this process may involve deciding what to do with your money. Let’s say, for example, that Paul is 56 and has a type of brain cancer with a pretty low survival rate. Although Paul has $1.7 million in assets, he doesn’t have any heirs.
Given his health status, Paul is considering just spending his cash quickly and truly enjoying the rest of his life by buying an expensive sports car, taking some lavish vacations, and giving in to his every whim.
But experts warn he shouldn’t necessarily rush into that, even if there seems to be a solid reason to check off items on his bucket list.
Spending his money too fast could be a huge mistake
Although Paul may be tempted to run off and start spending, April D. Jones, founder and CEO of Jones Law Firm and incoming president of the Colorado Bar Association, told Moneywise that she “would absolutely not recommend going on a spending spree.”
“‘Likely terminal’ is not the same as certain,” Jones told Moneywise. “Medical research and treatment options are developing rapidly, including advances supported by artificial intelligence. We can’t know what new treatments might become available for a particular diagnosis, but I wouldn’t want someone to spend away the financial resources that could allow them to pursue those options if they arise.”
Jason Grutter, a trust and estate attorney and partner at Trust Law Partners, LLP, agrees. “Money can’t buy you happiness, and leaving yourself with insufficient financial resources to pay for medical care is a sure way to guard against it,” Grutter said.
Grutter believes Paul should do something he’d been dreaming of, like take a trip or buy something special. But he also said, “going on a wild spending spree is unlikely to add anything to your quality of life. For the most part, keep your money conservatively and diversely invested to ensure you have adequate means to provide for yourself in terms of medical care, food, and other essentials. You’ll be glad it’s there when you face difficult decisions later on.”
Paul’s first priority should be an incapacity plan
While it may be fun for Paul to think about spending his money on adventure, he should also think about taking some practical steps to set himself up if his condition progresses — particularly since he has no heirs. This may mean there’s no obvious person to step in and manage his affairs. He needs a plan for that.
