How Can Estate Planning Help Your Family After a Serious Medical Diagnosis?

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How Can Estate Planning Help Your Family After a Serious Medical Diagnosis?

How Can Estate Planning Help Your Family After a Serious Medical Diagnosis?

doctor talking to his female patient at office

You or someone in your family has just received a serious medical diagnosis. You are overwhelmed with doctor’s appointments, treatment options, anxiety, and stress. How will you and your family cope in the future? Careful estate planning can help you with some of the practical issues facing your family in this trying time.

Why Estate Planning?

Making an estate plan is probably not the first thing on your mind after you learn of the diagnosis. But the truth is, taking the time to speak to a lawyer and sign a few documents can help you. Families of those with serious medical conditions often need to make difficult decisions for the patient, and they often need financial resources to pay for care. Estate planning can help through structures such as an advance health care directive, a special needs trust, or life insurance.

Advance Health Care Directive

In California, people can give family members the authority to make medical decisions for them when they cannot by signing advance health care directives. These legal documents combine a durable power of attorney and a living will. The durable power of attorney allows a specific person to direct medical care when the signer is incapacitated, while the living will specifies the signer’s end-of-life wishes.

Avoid family conflicts and confusion by signing a directive if you are ill, or talking to your ill family member about signing one. Keep copies of the directive handy to show doctors and nurses if needed.

Special Needs Trust

A special needs trust (SNT) provides tax advantages for people with significant health care costs. When set up properly, money in the trust does not count against the income and assets requirements to qualify for some government benefits programs such as Medicaid and Supplemental Security Income (SSI). Family members can contribute money or assets to the trust without jeopardizing the beneficiary’s ability to get government benefits. Then the beneficiary can use money from the trust to pay for some types of medical and personal needs. Talk to a lawyer about how to set up an SNT.

Life Insurance

While the family member with the medical condition may not qualify for life insurance, other family members may. Most life insurance companies will not issue policies to people with serious preexisting health conditions. But healthier family members can take out policies and list the ill family member’s SNT as the beneficiary, or maybe the ill person himself. If these family members pass away, the insurance can provide money to pay for continuing care. Your lawyer can advise on who to designate as the beneficiary.

Planning for the future with a serious illness? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call Angela’s office at (424) 400-2125.

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