Your health and finances are more closely linked than you might think. From medical expenses to the impact of illness or disability on your ability to earn a living, declining health can have a significant effect on your financial well-being. Making sure that you have financial and estate plans in place that have been adjusted to accommodate a long-term medical condition can help make a very difficult situation less overwhelming - for you and for the people who care about you.
Carefully review the terms of both your health care and life insurance policies. You can't plan ahead for dealing with a potential illness or disability until you know exactly how far your health care coverage will go toward helping you pay for co-pays, prescription costs, hospitalization, medical equipment and other associated costs. Next, review your life insurance policy. Some types of life insurance have a disability rider that can help pay for some of these medical costs.
Plan now for future health care decisions. Many people choose to prepare advance directives, which are legal documents that provide instructions for medical care and only go into effect if you cannot communicate your own wishes due to illness or severe injury. The most common advance directives include a living will and a durable power of attorney for health care.
A living will tells doctors how you want to be treated if you cannot make your own decisions about emergency treatment. You can be specific about which medical treatments you would want, which ones you would want to avoid, and under which conditions each of your choices applies.
A durable power of attorney for health care names a person to be a healthcare proxy and make medical decisions for you if you are unable to communicate these yourself. In addition to being someone you trust, your proxy should be someone who is familiar with your personal values and wishes.
Empower your caregiver. Be sure to give permission in advance for your doctor(s), healthcare insurance provider and legal advisor to talk with your caregiver as needed.
Make your paperwork accessible. Put your will, trust documents, insurance policies, deeds, loan paperwork and copies of legal documents in one place and provide your family with the location of the file. If your papers are in a bank safe deposit box, keep copies in a file at home. And remember: facing serious health issues makes it even more important to review and update your will and any trusts. If you have a trust, you should make certain that the title and ownership of property is correct.
Don’t overlook your personal property. If you own a home or other real estate, vehicles, or valuable art or other collections, it’s important to prepare for management of your property in the event that you may need to move to a nursing care facility. These assets will need to be protected and preserved for your estate beneficiaries, and you may want to appoint someone as power of attorney to manage your property.
If you have online access to your bank accounts, securities accounts, retirement accounts or business accounts, a trusted advisor should know all of the passwords. A financial power of attorney gives someone you choose the legal authority to act as your agent and make financial decisions for you if you cannot. If you are in long-term care in the hospital or a nursing home, your agent may need access to your accounts.
Consider establishing a revocable living trust. With a revocable living trust, your property is transferred to the management of a trustee. While you may be the initial trustee, your trust document will list a successor trustee to take over if you are no longer able to manage your assets. If you are facing a serious illness, you may wish to resign and have the successor trustee take over while you still have the ability to offer advice and counsel.
Keep your financial advisor in the loop. If you are diagnosed with a condition, share information about the likely progression and symptoms of your illness with your financial advisor. Your doctors may advise that you'll need to retire earlier than you had planned, or maybe your spouse will need to leave work to care for you. Your home or vehicle may need expensive modifications to accommodate any physical limitations. You may eventually require home health care. Knowing the situation allows your financial advisor to adjust your investment portfolio and budget to prepare for projected costs.
Remember the causes that mean the most to you. If you currently support a charity that is important to you, like Drexel University, make sure that the person holding your power of attorney knows to continue that support. If you have a revocable living trust, there will need to be a specific direction in the trust or power of attorney document to enable that individual to continue making charitable gifts.
It’s important to have your health care and financial arrangements in place before there’s a serious illness or a health care crisis. Contact your financial and legal advisors to discuss key financial decisions you may need to make now to ensure that you and your family are optimally prepared and protected.
Questions? Contact David Toll, JD, senior associate vice president for Gift Planning, at 215.895.1882 or giftplanning@drexel.edu.
Carefully review the terms of both your health care and life insurance policies. You can't plan ahead for dealing with a potential illness or disability until you know exactly how far your health care coverage will go toward helping you pay for co-pays, prescription costs, hospitalization, medical equipment and other associated costs. Next, review your life insurance policy. Some types of life insurance have a disability rider that can help pay for some of these medical costs.
Plan now for future health care decisions. Many people choose to prepare advance directives, which are legal documents that provide instructions for medical care and only go into effect if you cannot communicate your own wishes due to illness or severe injury. The most common advance directives include a living will and a durable power of attorney for health care.
A living will tells doctors how you want to be treated if you cannot make your own decisions about emergency treatment. You can be specific about which medical treatments you would want, which ones you would want to avoid, and under which conditions each of your choices applies.
A durable power of attorney for health care names a person to be a healthcare proxy and make medical decisions for you if you are unable to communicate these yourself. In addition to being someone you trust, your proxy should be someone who is familiar with your personal values and wishes.
Empower your caregiver. Be sure to give permission in advance for your doctor(s), healthcare insurance provider and legal advisor to talk with your caregiver as needed.
Make your paperwork accessible. Put your will, trust documents, insurance policies, deeds, loan paperwork and copies of legal documents in one place and provide your family with the location of the file. If your papers are in a bank safe deposit box, keep copies in a file at home. And remember: facing serious health issues makes it even more important to review and update your will and any trusts. If you have a trust, you should make certain that the title and ownership of property is correct.
Don’t overlook your personal property. If you own a home or other real estate, vehicles, or valuable art or other collections, it’s important to prepare for management of your property in the event that you may need to move to a nursing care facility. These assets will need to be protected and preserved for your estate beneficiaries, and you may want to appoint someone as power of attorney to manage your property.
If you have online access to your bank accounts, securities accounts, retirement accounts or business accounts, a trusted advisor should know all of the passwords. A financial power of attorney gives someone you choose the legal authority to act as your agent and make financial decisions for you if you cannot. If you are in long-term care in the hospital or a nursing home, your agent may need access to your accounts.
Consider establishing a revocable living trust. With a revocable living trust, your property is transferred to the management of a trustee. While you may be the initial trustee, your trust document will list a successor trustee to take over if you are no longer able to manage your assets. If you are facing a serious illness, you may wish to resign and have the successor trustee take over while you still have the ability to offer advice and counsel.
Keep your financial advisor in the loop. If you are diagnosed with a condition, share information about the likely progression and symptoms of your illness with your financial advisor. Your doctors may advise that you'll need to retire earlier than you had planned, or maybe your spouse will need to leave work to care for you. Your home or vehicle may need expensive modifications to accommodate any physical limitations. You may eventually require home health care. Knowing the situation allows your financial advisor to adjust your investment portfolio and budget to prepare for projected costs.
Remember the causes that mean the most to you. If you currently support a charity that is important to you, like Drexel University, make sure that the person holding your power of attorney knows to continue that support. If you have a revocable living trust, there will need to be a specific direction in the trust or power of attorney document to enable that individual to continue making charitable gifts.
It’s important to have your health care and financial arrangements in place before there’s a serious illness or a health care crisis. Contact your financial and legal advisors to discuss key financial decisions you may need to make now to ensure that you and your family are optimally prepared and protected.
Questions? Contact David Toll, JD, senior associate vice president for Gift Planning, at 215.895.1882 or giftplanning@drexel.edu.