Importance of Disability Planning

You and your loved ones may be relatively healthy today, but can you guarantee you’ll be just as healthy 20 years from now? Of course not. No one can predict when and if they develop a physical disability or disease. No one can be ready for the day they walk into their doctor’s office and are told they’re suffering from Alzheimer’s or cancer. Even if you eat a perfect diet, exercise every day and take supplements, you still can’t avoid the risk of suffering a debilitating physical ailment. For example, one-third of adults over the age of 65 suffer a fall each year. Another shocking statistic – one in three Americans will face at least a 90-day disability before reaching age 65, according to

Another critical factor in properly preparing for a disability is the unfortunate fact that nursing homes and long-term care facilities are extremely expensive. In fact, nursing home costs would probably consume many Americans’ financial assets. Studies done at Harvard showed that nearly 70 percent of single people and almost 35 percent of married couples would exhaust all of their assets after only 13 weeks (i.e., a little over three month) in a nursing home.

This is why you need to incorporate disability planning in your estate plan.

Below are some important estate planning tips for properly preparing for a disability, or for needing care at a nursing facility:

1. Long-term Care Insurance
A good way to avoid exhausting all of your assets on nursing home costs or the costs of hiring an in-home nurse is to invest in long-term care insurance. For many plans, you can choose the amount of coverage you want and the types of benefits you desire. For example, if you don’t want to leave your home, you can choose a long-term insurance plan that will cover the cost of an in-home care professional so you don’t have to leave the comfort of your home.

Some of you may be asking, “Why don’t I just keep my money and just get Medicaid to cover my long-term care expenses?” Answer: Qualifying for Medicaid is not easy. The fact is – it’s a complicated process and you usually have to possess very limited funds before Medicaid will pay for nursing home costs.

2. Broad Powers of Attorney
A properly drafted document listing the powers of attorney is also a good planning strategy. A well drafted Power of Attorney can empower an agent to help manage your property and assets if you suddenly become disabled. The person you entrust with power of attorney can also be the decision-maker for critical health care decisions (which can reduce the stress level for your loved ones when/if you become permanently disabled).

3. Fully Fund a Revocable Trust
Revocable trusts are a fantastic estate planning tool, especially when preparing for a disability, either for you or a loved one. Why? Because a revocable trust gives you an enormous amount of planning flexibility and can be used as a financial tool to set forth criterion on how the assets in that trust are used. For example, if you set up a revocable trust for a disabled loved one, you can set specific criterion on what the funds on the trust are used for so your loved one is cared for. Additionally, they can be used to protect your own assets and ensure you and your family are taken care in the event of your disability.

For more information about properly planning for a disability, it’s important that you sit down with an experienced estate planning attorney to learn about your options.