What To Do When a Disability Turns Your Estate Plan Upside Down
“Plans are things that change.”
Despite thoughtful effort and a concerted strategy, you cannot prepare for every emergency. A car accident, sudden illness, workplace injury or chronic medical condition can force you to re-evaluate the core assumptions you used to plan your future and set up your legacy.
According to data by the Centers for Disease Control and Prevention (CDC) in 2020, 26% of adults living in the United States have some type of disability. As you know, the cost of healthcare increases as we age, and a long-term disability does not lighten the load.
Frustratingly, you can’t turn back the clock. However, you can take meaningful actions to protect your legacy and estate in the wake of your newfound limitations. Here are some insights to that end:
When you work with a qualified estate planning attorney, you will ensure that:
There’s an authorized person to make financial and healthcare decisions for you if you become mentally or physically unable to do so yourself.
There’s also an authorized person to manage your property, pay your bills, file your taxes and handle similar business if you’re unable to do these tasks.
Your wishes about health care decisions, such as end of life care and do-not-resuscitate instructions, have been communicated in a legally valid and binding manner.
Get a recommendation from your estate planning attorney or your financial advisor, who can help you take additional actions, such as:
Ensuring that you have appropriate insurance.
Reassessing your investment options and portfolio in light of your new limitations and constraints on your ability to generate income.
Making sure that you have a budget that works and that your bills will all get paid on time.
Mind this important distinction:
Be advised that “disability” for legal purposes is different than “disability” for financial planning purposes.
For example, disability for financial purposes might mean you can’t work gainfully anymore because of cancer or a workplace injury. On the other hand, “incapacity” in an estate planning context typically means that a person is no longer capable of making sound decisions, often due to systemic illness or injury.
In other words, you can be “disabled” for financial/insurance purposes and be non-disabled for legal purposes. However, almost anyone who is disabled for legal purposes would also be considered disabled for financial purposes.
Either way, it’s important for us to work together with your financial advisor to make sure you and your family are fully protected.
Actions to take on your own:
Pay attention to where your money is going as well as to your long term planning strategy. I can help you assess whether your current plans are still realistic and, if not, what alternative options you have.
Maintain a healthy lifestyle. This can mean different things for each individual. Speak with your health care professional to create a plan for your longevity.
Get the help you need from trusted professionals. Now is the time to tap your friends and family and network for assistance with the heavy lifting. No single advisor will have all the answers. Your team can work in concert to reduce the anxiety and uncertainty and keep you focused on what really matters.
Contact me today to assess your long term plans and documents and make sure you are as secure as possible in light of your new challenges.
