As you grow older, the chances of developing health problems increase. Although you may be someone that will be unaffected by serious health issues, you can never count on being of sound health and mind until you die. Your estate planning should include the possibility of various health risks in which you may no longer be able to make decisions for yourself.
Health Insurance Costs
Treatment for some conditions can sometimes go on for years, and someone must pay what health insurance does not. Calculating the possibility needs to be included in your risk management plans because any unpaid bills at the time of your death will come out of the estate before being dispersed unless you prepare for it.Life Insurance Can Make a Difference
If you are at high risk for developing a particular health problem or disease or already have one, you may want to consider buying life insurance while you can. If you wait until you have the disease, it may be almost impossible to get life insurance or to get it at a reasonable price. The younger you are when you buy life insurance, the less expensive it will be. Life insurance proceeds can ensure that your loved ones have quick access to cash and the money does not have to go through probate.Consider Long-Term Care Insurance
Long-term care insurance provides coverage when you need to go into a nursing home or similar arrangement. It is less expensive when you buy the policy at a younger age, preferably in your forties or fifties.Medicaid Long-Term Care Requires Spending Down Your Assets
If it becomes necessary for you to go into a nursing home or a similar facility and you plan to use Medicaid to pay for it, there are limited income and asset requirements. You will need to spend down your assets before receiving any benefits.Your primary residence does not count as an asset if you continue to live in the home or intend to return to it. There is also an equity limit on the home, which ranges from $688,000 to $1,033,000, depending on your state.
If You Are Already Diagnosed With a Critical Illness
When you have been diagnosed with a critical disease that may affect your ability to make decisions, Forbes advises that you get your estate planning documents drawn up immediately. Having your documents drawn up for failing health purposes is necessary to protect your assets and health.Putting Money Into a Trust
There are different kinds of trusts, and if you choose to create one, you must have one that best suits your intent to pass on your assets safely. Money put into a trust is not taxed when a contribution is made, but all earnings are taxed. It can also protect assets from creditors.Testamentary Capacity
When making a will and other estate-planning documents, you must create them when you are of a sound mind. Soundness is not determined by age, but most states require you to be 18 years or older to enter into contractual agreements. The Legal Information Institute says that capacity requires knowing what assets you have, who you want them to go to, and the ability to create a plan to disperse them.The Trust Protector
Trusts, particularly revocable trusts, can be used to keep information from the public. Once you become sick and unable to make your own decisions, it becomes necessary for another person to manage your assets in the trust for you.Even though you may have given that person power of attorney, Forbes suggests you may want an independent CPA to act as a monitor. You can also have the person caring for the trust provide annual (or more often) reports to the CPA for accountability. This person may also have the power to remove and appoint a new person to handle the money in the trust, if necessary.
A good wealth-management plan can help you retain much of your wealth and pass it on successfully. You will need an estate-planning attorney to guide you through the intricacies of the law and its frequent changes.