As poet Robert Burns mused centuries ago, “the best-laid plans of mice and men often go awry.” 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.
A 2015 report published by the Centers for Disease Control and Prevention (CDC) offered this sobering assessment: “In 2013, approximately 1 in 5 U.S. adults reported any disability, with state-level prevalence of any disability ranging from 16.4% in Minnesota to 31.5% in Alabama.” The CDC also reported that “annual disability-associated health care expenditures were estimated at nearly $400 billion in 2006, with over half attributable to costs related to non-independent living (e.g., institutional care, personal care services).”
Frustrating as it may be, once a disability takes away your mental capacity (often referred to as your “legal capacity to sign documents”; examples include advanced dementia, systemic illness, or significant injury), you cannot turn back the clock and revisit your past estate planning decisions, if you even had a plan in place at all. Alternatively, should your disability only prevent you from working or performing day-to-day functions yet you retain your mental capacity (ex: cancer or a workplace injury), there will be items to address in the wake of your newfound limitations. To these ends, here are some recommendations:
Work with a qualified estate planning attorney and your financial advisor (these two individuals should already have a relationship that maximizes professional transparency) today to ensure that:
- There’s an authorized person(s) 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(s) 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 burial vs. cremation preferences, have been communicated in a legally valid and binding manner.
- Ensuring you have appropriate insurance; disability insurance and long-term care insurance are critical if you are concerned about potential loss of income or overall long-term health care expenses.
If, someday, you are faced with a physical disability but your mental capacity is still intact, you will still want to address the following issues with your professional team at that time:
- 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.
Now is the time to tap your network of family, friends, and professionals for assistance with the heavy lifting. While no single advisor will have all the answers, your collective team can work in concert to reduce any anxiety and uncertainty in an effort to keep you focused on what really matters. Please feel free to reach out to us to assess your long-term plans to ensure you are as secure as possible.