Serious Medical Diagnosis? Four Financial Steps to Take
A serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.


As a wealth manager, I often guide clients through unexpected financial and health care challenges, including receiving a life-altering medical diagnosis.
According to the National Institutes of Health, 85% of Americans over 65 years of age have at least one chronic health condition, and 60% have at least two chronic conditions.
Receiving a diagnosis of a serious condition, such as cardiovascular disease, cancer, chronic respiratory disease or diabetes, can bring up a wide range of emotions. Many people feel shock, fear or anxiety as they process what the diagnosis means for their future.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Others may feel sadness, frustration or even denial, especially if they were not expecting the news. Some might experience relief if the diagnosis explains ongoing symptoms and opens the door to treatment.
If you’re affluent, financial security may not be your primary concern, but structuring wealth to align with new health realities is crucial.
When faced with such news, the first step is to organize your priorities and ensure that your health care, legal and financial strategies support your evolving needs.
1. Establishing a health care plan
Your medical diagnosis will dictate various aspects of your future planning. Consider asking your health care team these key questions:
- What does your treatment plan entail?
- Where will you receive care — in your home, a specialized community or a hospital?
- Who needs to be involved in your care management?
- How might your health change over time?
- Who in your circle — family, friends or medical professionals — will take an active role in making decisions with you?
By clarifying these priorities, you can develop a strategy that aligns with what matters most to you.
Whether your top priority is staying at home, ensuring your spouse’s financial stability or securing the best medical care available, identifying these objectives early leads to a more effective financial plan.
2. Organizing your finances
Once your health care plan is clear, the next step is reviewing your financial landscape. As your medical professionals will have a plan for your health, your financial team will need to come up with a plan for your finances based on your diagnosis.
Even for high-net-worth individuals, cash flow, liquidity and asset structuring are vital to ensuring financial stability through medical transitions, and organizing these key items is essential.
Here’s a list of what you will need:
- Comprehensive asset inventory. Create a detailed list of all assets, including real estate, investment accounts, business holdings, valuable personal property and any other financial resources.
- Identify and project income sources. Assess all sources of income, including Social Security benefits, pensions, veterans’ benefits, annuities, dividends, rental income and other passive income streams.
- Evaluate health care and long-term care costs. Examine current and projected medical expenses, including insurance coverage, out-of-pocket costs, and potential long-term care needs.
- Ownership structure and estate planning review. Confirm that beneficiary designations are up to date. Review the ownership structure of investment accounts, trusts and real estate holdings to ensure they align with estate planning goals.
- Assess financial decision-makers. Evaluate whether designated financial decision-makers — such as power of attorney agents, trustees or financial advisers — are still the best individuals for the role. Consider their financial acumen, trustworthiness and willingness to act in your best interest, and update documents as necessary.
A well-prepared financial plan should address not only current needs but also future scenarios, including increased health care costs, the need for more structured wealth distribution strategies, or potential liquidity needs in the future.
Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.
Consider how these expenses will impact overall cash flow and whether adjustments to spending or investment strategies are necessary.
3. Legal considerations and estate planning
With a clearer understanding of your health and financial priorities, you can update your legal documents accordingly, including:
- Wills and trusts that reflect your new health care and financial priorities
- Powers of attorney for financial and health care decisions, ensuring the right individuals are authorized to act on your behalf if you were to become incapacitated
- Health care directives specifying your preferences for medical treatment
- Beneficiary designations on retirement accounts, insurance policies and investment vehicles
Estate planning is not just about wealth transfer but also about ensuring that your wishes regarding health care and financial management are followed precisely.
4. Communicating with successor decision-makers
The final step is sharing your updated plan with those who will fulfill your wishes, including:
- Your spouse or immediate family members
- Trustees or executors
- Financial and legal advisers
- Health care proxies or designated decision-makers
Having open conversations ensures that your financial, legal and health care plans are executed smoothly when the time comes, avoiding unnecessary stress for your loved ones.
Conclusion
A shocking medical diagnosis can be overwhelming, but with a structured approach, you can regain control of your financial, legal, and health care future.
By aligning your wealth management strategy with your new reality, you ensure that your assets support your priorities, allowing you to focus on what truly matters — your well-being and quality of life with your loved ones.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Financial adviser Tom West, CLU®, ChFC®, AIF®, founded Lifecare Affordability Plan (LCAP) to address a critical need for actionable planning that integrates finances, healthcare and senior housing. Tom has nearly 30 years of experience guiding families through financial and healthcare decisions. By bridging the gap between finance and healthcare, LCAP’s experienced team works with individuals and financial advisers to provide families with a financial strategy that meets changing healthcare needs while preserving the caregiver’s quality of life.
-
Worried Social Security Benefits Will Be Cut? This Is How Much More You Need to Save to Be Safe
The Social Security trust fund will be insolvent in 2033 and by 2035 will have to reduce benefits by 17%. Here is now much more you need to save to cover the potential shortfall.
-
The Odd Couple: Renting Out a Room in Retirement for You?
Whether you're more Golden Girls or Felix Unger, renting out a room in retirement might make financial sense. You might even have fun.
-
Worried Social Security Benefits Will Be Cut? This Is How Much More You Need to Save to Be Safe
The Social Security trust fund will be insolvent in 2033 and by 2035 will have to reduce benefits by 17%. Here is now much more you need to save to cover the potential shortfall.
-
The Odd Couple: Renting Out a Room in Retirement
Whether you're more Golden Girls or Felix Unger, renting out a room in retirement might make financial sense. You might even have fun.
-
How to Be Your Own Consumer Watchdog
Big changes are afoot at federal agencies. Make these moves to protect yourself financially.
-
The Three Retirement Tax Issues I Nag My Clients About
A financial professional highlights areas of tax planning that retirees should have on their radar as they finalize their retirement plan.
-
Do You Need Disability Insurance? Three Things to Know
Disability insurance can help replace some of your income during unexpected life events. Here are the basics, courtesy of a financial professional.
-
How to Age Gracefully: Learn from Bill Gates, the Who and David Attenborough
Getting old isn’t nearly as bad as many people think it will be. Nor is it quite as good. Maybe it’s somewhere in between.
-
Stock Market Today: UnitedHealth Drags on Dow After CEO Splits
UNH created headwinds for the price-weighted Dow on news that its embattled CEO, Andrew Witty, is stepping down.
-
April CPI Keeps Fed Rate Cuts on Hold for Now: What the Experts Say
The April CPI report is unlikely to change the Fed's wait-and-see approach to interest rates.