Expecting the Unexpected: Estate Planning for a Chronic Illness

Estate planning for a chronic illness

This is part two of three in our series “Expecting the Unexpected. You can read part one on catastrophic illness here.

For many, estate planning immediately brings to mind ways you can protect your assets and retirement funds for your heirs. While it serves this function, comprehensive estate planning can also help prepare you for possible future events that can affect the quality of your life and potentially that of your loved ones. One of these events is the onset of a chronic illness.

A chronic illness often comes unexpectedly, leaving families to navigate new financial and emotional burdens for which they may not be prepared. The good news is the impact of many of these burdens can be lessened with the protections an estate plan can provide. Such peace of mind can bring comfort not only during the time when a chronic illness appears but also in the present when you are in good health, so you don’t have to worry should such a scenario arise.  

An experienced estate planning attorney can help by including specific documents in your estate plan that can provide the protection you need in the event you find yourself facing a chronic illness. Once you are diagnosed, time will be a critical factor for getting the protection you need. With the safeguards an estate plan can provide already in place, you can afford yourself more time to focus on care instead of worrying about what is going to happen “if” and “when.”

But before discussing further the issues you should think about when preparing for a chronic illness and what documents you will need to do so, let us take a moment to understand what a chronic illness is first. No one is immune, which is why it is best to expect the unexpected.    

What is a chronic illness?

The Centers for Disease Control and Prevention (CDC) defines chronic illness as a severe condition or disease that is sustained, lasting at least one year, and may not have a cure. Chronic illnesses can be diagnosed without warning, which can often make individuals and families unprepared for the immense life changes that are often emotionally taxing. They can require medical care such as extensive treatments, expensive medication, and changes in diet or exercise. Chronic illness also often alters living conditions and can make aspects of daily life difficult, such as maintaining a job.

According to the CDC, six in ten American adults live with at least one chronic illness and four in ten have two or more, with cancer, heart disease, and diabetes among the most common. As you age, these numbers increase. The National Institute on Aging offers the following dismal outlook: 85% of older adults have one chronic illness, while 60% have two. These chronic illnesses can be exacerbated by taking lifestyle risks such as using tobacco, consuming an unhealthy diet, not exercising, and using drugs.

Why do I need to include preparations for a chronic illness in my estate plan?

Chronic illnesses can significantly alter your quality of life, as well as the lives of your loved ones. Therefore, one of the best ways to preserve your future is to prepare for the possibility of a future chronic illness now using your estate plan.

Those diagnosed with chronic illness should expect extensive medical treatments, medications, and the costs that come with them. They may be unable to continue working in their jobs, which may impact the financial security of their family members. They may also experience a decrease in quality of life that requires dependency on others, and long-term care or assistance. This can be an immense emotional and financial strain on those who are ill and their loved ones.

Your estate planning attorney can likewise help you navigate the resources that can protect your loved ones and your assets in the event a chronic illness should strike. The choices you make now, while you are physically and mentally capable, can protect your needs and wishes in the future. These medical and financial decisions are critical; preparing for these possibilities can make future events less complicated and less uncertain for you and your loved ones, guiding them as to your wishes should you become unable to communicate them.

What estate planning documents can help me prepare for a chronic illness?

  • Medical power of attorney. This document allows your agent to make important medical decisions on your behalf in the event that you are not physically or mentally able to make them yourself. For example, a medical power of attorney may be necessary for deciding on temporary treatment issues or whether to proceed with life-extending care.
  • Financial power of attorney. This document authorizes your agent to manage your finances and assets in the event that you are unable to do so yourself. The agent you choose will be able to oversee your retirement accounts, take care of medical costs, provide for family expenses, manage real estate, among many other financial concerns you may wish to appoint to them.
  • Advanced healthcare directive or living will. These documents communicate the health care decisions you would want to make should you be mentally incapacitated. Your living will can outline your preference for medical treatments, pain treatment, and life-extending care, among other choices.
  • HIPAA authorization. With this document, you consent that your otherwise protected health information, such as your medical history, current diagnosis, and physician recommendations may be released to your family or another trusted individual.

Should I create a trust to help pay for the expenses associated with my chronic illness?

Another option to include in your estate plan when considering protection for a chronic illness is to create a revocable trust with funds earmarked for your long-term care. A revocable trust allows you to retain control over the assets you place in it during your lifetime while offering specific tax advantages. The revocable trust will also not be subject to probate.

Finally, by creating a revocable trust, you can require the trustee you name to provide reports as to the usage of funds for your care to the individuals you choose. A revocable trust can also line up successive management of your care should the trustee you assign be unable to continue in their role.

If I have an estate plan already, am I automatically prepared for a chronic illness?

While it is certainly a good start to have an established estate plan, it should be updated to include your preparation for the possibility of a catastrophic or chronic illness. Too often, people wait to plan for such outcomes until after the onset of a chronic illness, and doing so can cause immense mental and financial strain on their families.

By updating your estate plan to reflect the possibility of a chronic illness, you are giving your family a set of instructions as to how they can best follow your needs if you are unable to express them yourself. Having a plan in place can protect you in the future as well as allow you to enjoy life in the present, knowing that you have done everything that you can.

You should have your estate plan evaluated regularly, preferably every two or three years. In the event of major life changes such as getting divorced, having children, or death in your family, that may mean you making updates sooner. 

There is no limit as to how many times you can amend your estate plan and your estate planning needs and preferences can change throughout your lifetime. A regular legal checkup can ensure that your wishes are accounted for as completely as possible.

Hire a Seattle estate planning attorney to help you prepare for a chronic illness.

The estate planning team at Elise Buie Family Law Group has the skills and expertise to create an estate plan that can protect you in the event you are diagnosed with a chronic illness. Though thinking about what life could be like with a chronic illness may be unpleasant, taking affirmative steps toward planning for one could make such a difficult time easier for your loved ones and you easier. Call us today to get started

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