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How to Prevent Losing Everything Due to a Chronic Illness

Estate Planning for Chronic Illness

Everyone deals with some kind of sickness at some point in their lives. Whether it’s a burst appendix or a common cold, being sick is part of life. At the same time, most of these illnesses have an end in sight. Knowing that the flu only lasts so long makes it easier to cope and get through the treatment. Most people don’t schedule an appointment with an Orange County estate planning lawyer because they need a common surgery.

On the other end of the spectrum are chronic illnesses. Things like high blood pressure, diabetes, Alzheimer’s disease, osteoporosis, and other chronic diseases don’t just go away. While there are treatments available and the potential for a long, normal life, there is also the potential for a significant impact on your life.

At their worst, chronic diseases can cost you your life. At their best, they are an inconvenience that can empty your bank account, disrupt your routine, or put you at some kind of risk.

Luckily, having a chronic illness does not have to end with you in the poor house. With the proper planning and professional help from an Orange County estate planning attorney, you can not only manage the illness but survive without losing everything.

Here is what you need to know: 

Why Do Chronic Illnesses Cost So Much?

It’s estimated that one in three American’s deals with some kind of chronic illness that ends up costing them more than 10% of their income. This can lead to massive amounts of medical debt or declaring medical bankruptcy. There are two significant reasons chronic illnesses have such an impact on your finances.

Out of Pocket Costs

A typical healthy person doesn’t go to the doctor more than a couple of times a year, if at all. Someone who is chronically ill has to make visits much more often to manage symptoms, take diagnostic tests, and calibrate treatment. This could mean several visits a month.

Since most insurance companies work on a cost-sharing basis, you have to pay some part of the visit’s overall cost. That means paying a copay, deductibles, and more. While the healthy person’s yearly visit may only cost $30 for the co-pay, those with chronic illnesses may have to make that payment several times a month or more. That co-pay doesn’t include fees towards medicine, equipment, or other items needed for the proper management of their condition. Of course, not all insurance plans cover all situations or treatments, so the cost can rise even more.

Missed/Lost Work

Chronic illnesses don’t just have the potential to cost a fortune, but they can also hurt your income. Many of these illnesses make it difficult to keep a job. Take someone with rheumatoid arthritis. The pain caused by this disease can make it unbearable to tap a keyboard for even a few minutes, let alone all day. On top of that, this patient may need to get regular medical infusions that can take up to four hours each, multiple days a week.

People who can’t schedule outside of work hours or need treatments to even stay alive might find keeping a job almost impossible. Since most people have insurance tied to their employment, losing your job means paying for everything out of pocket. This exponentially raises their overall medical costs.

An Estate Planning Attorney Orange County Can Help You Stay Afloat

With the rising cost of medical care and the uncertainty with healthcare plans, a chronic illness might feel like hitting a financial iceberg. Your job is to focus on your health and get into a positive routine. You don’t need to spend all of your time worrying about money as well.

Luckily, estate planning lawyers in Orange County can help. Most people think that estate planning attorneys only deal with wills, trusts, and power of attorneys. These are an essential part of these lawyers’ skill sets. In fact, making sure that your affairs are in order is a huge part of having a chronic illness. While it’s never fun to think about your own passing, having a proper estate plan in place gives you control over what happens to your assets. 

Everyone should draft a will in case the unthinkable happens. Someone with a chronic illness should absolutely consider designating a healthcare power of attorney. This POA allows someone of your choosing to make medical decisions on your behalf if you are incapacitated.

Estate planning attorneys do more than simply write wills. They are also invaluable at helping their clients with long-term and end-of-life car. That means they can help you create a plan that includes dealing with medical costs.

Here are some ways estate planning attorneys can help:

Long-Term Care Insurance

It’s not uncommon for people to purchase some kind of life insurance. This can be a great asset if something happens to you. It can help offset taxes in your estate and leave your beneficiary in a better financial position. Long-term care insurance is a similar kind of insurance, but it’s meant to help you. This kind of coverage is complicated, so you’ll want to make sure your estate planning lawyer helps negotiate terms.

Maximize Retirement

If you are still working and dealing with a chronic illness, it would be prudent to build up your retirement account. There are a variety of strategies to do this, including opening new accounts like a Roth IRA. There are still legal limits to how these accounts are funded, so you’ll want to get the proper guidance from an experienced professional.

Social Security and Other State or Federal Programs

There are a variety of government-run programs meant to help people with long-term care. The challenge is knowing how to best utilize these accounts. Social Security, for example, pays out different amounts depending on when you start collecting. A smart strategy looks at getting the maximum benefit without waiting too long.

There are also strict rules around programs like Medicaid and Medi-Cal. Medi-Cal, for example, is meant for lower-income people. While some people believe that if they transfer assets out of their name, they can meet the income requirements. In reality, there is a timeline of when these kinds of transfers can be made. Taking action at the wrong time could mean having to wait to be eligible.

Orange County Estate Planning Attorneys Work to Help You

From helping you create your last will and testament to guiding a strategy to maximize your income and eligibility for assistance programs, estate planning attorneys are jacks of many trades. Just like modern medicine has made it so that a chronic illness is not a death sentence, estate planning lawyers are here to make sure a diagnosis doesn’t end in bankruptcy.

If you are someone you know is dealing with a chronic illness, take advantage of a free consultation to find out how an estate planning attorney can help.

Thomas McKenzie Law
Estate Planning Attorney in California. Full-service law firm specializing in estate plans, wills and trusts, long-term care, and financial consulting. Thomas L. McKenzie received his Juris Doctor degree from Western State University College of Law, in Fullerton, California. While working full-time at night and attending full-time daily classes, Tom graduated law school with honors in 1993.

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