Most people create an estate plan for two reasons: to ensure that all of their financial resources are available for a comfortable retirement, and to maintain the financial future of their family after they are gone.
Without an effective estate plan for an unforeseen illness, medical bills can rob their savings as well as the financial future of the family. Fortunately, there are some reasonable steps you can take to plan for a long-term or expensive illness:
Have health insurance. If you do not have health insurance provided to you by an employer, you will need to have your own policy. The time to obtain good health insurance is, of course, before you need it.
Get disability insurance. Disability insurance replaces lost income, and can be a life-saver for employed people confronting chronic illnesses. This type of policy typically replaces up to 60 percent of your normal income.
Long-Term Care Insurance
Consider long-term care insurance. If you are nearing retirement, look into long-term care insurance before you are too old to afford it or to qualify.
Own All Assets in an Asset Protection Trust
Standard family trusts and some asset protection trusts do not protect you from expensive medical costs or provide for long-term health care. A Private Asset Trust protects you against financial disaster, medical debt emergencies, and does not restrict you from qualifying with Medicare and other health care agencies. Consider a Home Occupancy Trust.
It's going to be nice to have access to your retirement funds, and have the ability to buy some fast food, a decent dinner, or send a birthday gift, even though you might be forced into assisted living, a convalescent home, or a hospice. If (or when) bad health or old age occurs, being broke or losing all financial resources would be additionally devastating.
Family Living Trusts and Wills
Standard family trusts and some asset protection trusts do not protect you from expensive medical costs or provide for long-term health care. A Private Asset Trust protects you against financial disaster, medical debt emergencies, and does not restrict you from qualifying with Medicare and other health care agencies.
Save With an Emergency Fund
If you fall victim to a sudden illness, you will probably be working less (if at all) and will also have additional expenses. Having six months' worth of living expenses in an emergency fund or establishing a line of credit to tap in case of an emergency is often recommended to alleviate this worry.
Plan Now or Risk It All
It is important to plan as early as possible. Even if you are young and healthy, you'll find some young people in long-term facilities from car accidents, sports injuries, or criminal attacks. Your plan may not be successful if it is not created in advance of the need. Some states require the plan to be in effect for sixty months prior to need.