Estate and Financial Planning for those Living with Chronic Illness or Disability pt1

By Martin Shenkman, CPA, BMA, JD







  1. Introduction
    to Chronic Illness Planning    .
    1. 120 million Americans are living
      with chronic illness. 20%+ are living with two or more chronic illnesses.
    2. 120 Million American’s are living
      with chronic illness
    3.  Chronic illness affects every aspect of
      planning
    4.  Advisers must ask; clients must tell.
    5.  Every legal document, plan, etc. has to
      be tailored to address chronic illness.
    6.  Standard documents and planning will
      often not protect the person living with chronic illness.
    7. Every aspect of planning is
      affected: financial planning, estate planning, legal documents, tax
      considerations and planning, insurance planning and more.
    8. Variations are substantial from
      disease to disease, even within different people with the same disease
      and even for the same person over time.
    9. Don’t make assumptions. Variations
      are wide and the nuances can be important.
    10. Cognitive issues affect some, but
      not all. There is often no correlation between physical and cognitive
      symptoms.
    11. Emotional issues – depression,
      apathy, and others affect many of those living with chronic illness.
  2. Competency
    and Chronic Illness    .
    1. Is the person living with chronic
      illness competent to sign a will? What about a contract?
    2. Consider what steps are necessary to
      confirm the competency of the person. Should a letter from an attending
      internist and/or neurologist be obtained? What should the letter
      reference? It should describe the health status generally, medications
      and their impact, any cognitive impact, etc.
    3. Competency has to be considered in
      the context of the act being undertaken. For example, a will leaving an
      estate equally to the persons only two natural children is far less
      suspect than a will leaving the entire estate to a home health aide when
      there are children.
    4. Many illnesses have only limited impact,
      such as affecting specific domains, not memory or intelligence.
  3. Working
    with Advisers    .
    1. Annual meetings are essential for
      everyone, but are even more critical for those living with chronic
      illness.
    2. Consider authorizing advisers to
      speak to each other, your heirs and your fiduciaries. This should include
      your accountant, attorney, estate planner, financial adviser, etc.
    3. Coordination of all your advisers,
      revisiting planning as your disease progresses is vital to your security.
    4. The team approach, a collaborative
      effort, is the best protection.
    5. Consider having a quarterly
      independent social worker or geriatric agency make a home visit and
      prepare a status report. The cost of this might be as little as
      $100-250/quarter. Having an independent, trained, professional meet you
      in your home will identify issues others may not. Importantly, it is a
      tremendous protection to identify abuse or neglect.
    6. Consider having an independent CPA
      get copies of all your monthly statements, have all payments and
      transactions entered into a bookkeeping program like Quicken, and
      generate a monthly or quarterly report. If the accountant also obtained a
      periodic credit report and attended the annual investment adviser
      meeting, the independent protection and monitoring can be extraordinarily
      important for someone with a chronic illness.