Chronic Illness and Estate Planning

Written by Robert Nickerson

Estate Planning becomes a greater challenge when a loved one like a spouse or an offspring has a chronic illness like Parkinson’s, senile dementia or multiple sclerosis. 
 
Chronic Illness is Not a Rare Situation
 
If we were to look at the numbers, there are over a 120 million Americans that suffer with a chronic illness. It’s bound to go up even higher by 2030. In fact, over twenty-five percent of those over sixty five have had their lives changed by a chronic illness. As with new generations and increasing age, it’s likely the number will continue to climb. Since this is essential to estate plans, it’s not only important to have something in place, but something prepared that will handle potential chronic illness; something that that covers a large umbrella.
 
Estate Plans for Those Already Living with Chronic Illness 
 
Though those with chronic illness will need similar documents in an estate plan that regular people use, the difference here is that they need to be modified to serve your needs. This is why it’s important to get them done as soon as you get a prognosis. Putting off too long could result in the illness impairing your ability to understand or even sign the right papers. This is understandably a hard and difficult decision, perhaps as much as the medical diagnosis. This is an important note to think about when searching for an advisor that can empathize with what your going though and can help.
 
Here are some documents that should be able to help you out when getting an estate plan together. 
 
HIPAA Releases
 
HIPAA stands for Health Insurance Portability and Accountability Act of 1996. This law prevents an unauthorized person from altering with your personal healthcare plans and protects your confidentiality of your healthcare information and insurance. The purpose of a HIPAA Release is that it assigns someone your know (family member or friend) to have access to your private health information. This is important for whoever your going to trust when communicating with doctors and insurance companies. Let’s say you’ve become too sick to make any decisions and cannot take your medicine. The person on the HIPAA Release will then take that responsibility as instructed.
 
When making this decision, it needs to be in writing and that whoever is being assigned is doing so on a voluntary basis. It also needs to show how much medical information is available. Sometimes its everything and sometimes it’s only what needs to be known. It should say where and what needs to be provided in order to care for an illness. It could be medical care professionals or the names of hospitals. It’s doesn’t need to be specific, as it could just refer to a category.
 
Does it make sense to have an expiration date for a HIPAA Release? Not if you have a progressive illness. What does make sense is having the right to revoke any access to prevent abuse. This could be an explanation for them to be replaced if needed. This is why this is only necessary if your electing someone that isn’t as close. This is why you should probably look to a close family member or friend. 
 
Watch out for the standard form. Some law practices will simply hand you’re a “standard form” that looks like any typical document. You might be told it’ll cover the loved one, even though there’s no one better who understands their problem then you. Only look for a lawyer who will cater to ones specific needs and can get it all in writing.
 
Living Wills and Chronic Illness
 
A living will exemplifies one’s health care requests. It’s common for end of life wishes, but it can cover a lot of things. It’s something that can be altered based on other medical requirements or religious beliefs that could affect them. It’s language can be rewritten to suit about anything. But don’t assume that just because you have one ailing illness doesn’t mean you won’t have another. Be sure to include similar instructions, but vague enough that more information can be put in later. But for the original illness, clarify what disease you have, what stage it’s in and what course it’s set to go in. Don’t forget to add what and how it needs to be treated. Are you open to experimental treatments? Then you may want to add your more then willing to go through experimental treatments. But also add whether the one responsible for financial power of attorney is paying for this or if it’s being covered with something else. 
 
Health Care Proxy and Chronic Illness
 
What a health care proxy does is legally assigns a person to your medical power of attorney. This is called your “agent” who will make your medical decisions when your no longer in a position to do so. Be sure to discuss with them what you want even before you get it on paper. This also includes guardianship should you have children. Do you want them as guardians or someone else? That’s another matter that goes into ones estate plan.
 
Physician Order for Life-Sustaining Treatment
 
This is a specific document that’s given to your doctor once completed by whoever is your agent in your health care power of attorney. This purpose is normally for end of life decisions, so this is not meant for broader medical information. This is also important for those that have no family to name.
 
Revocable Trust and Chronic Illness
 
This is one of the most common documents used in an estate plan. This is to prevent major trouble in probate court later on. This helps avoid those high costs and drawn out court proceedings. For someone with a chronic illness, this will help a lot when figuring out the successor and their management of finances. For example, if you want someone who will keep watch over the accounts, you can have them complete a review each year. You can even have an independent CPA to serve as a monitor, to at least have more protection and a safeguard. 

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