By: Martin M. Shenkman, CPA, MBA, JD
Nothing in these slides or any accompanying presentation is to be considered tax, legal, investment, or other professional advice. The information is merely provided for educational purposes and no action should be taken without the individual consulting his or her own tax, estate, legal, financial, investment, insurance, and other advisors. The National Multiple Sclerosis Society and any hosts, sponsors, moderator, panelists, or others associated with this program are NOT responsible for its content or accuracy.
The process of providing peace of mind for you, and your loved ones (however you define the term). It should address both the issues you may face while you’re alive, and those that might occur after your death, including the variables and uncertainties associated with having a chronic illness. It is more about planning for life rather than death. It is an integrated plan that coordinates your investments, insurance, emergency and disability planning, retirement, and other needs. Define what “estate planning” means to you.
Same process as for everyone just tailored to fit your special circumstances – your experience with MS. Even more so, it must be about planning for life rather than death. An integrated plan that coordinates your investments, insurance, emergency and disability planning, retirement, and other needs – but each component must be modified as required. Define what “estate planning” means to you in light of your, or your loved ones, living with the challenges of MS.
Powers of Attorney – everyone names an agent to handle financial and legal matters, but your document might need to differ:
Your advisors need to understand: Chronic Illness is a common challenge. At least 400,000 Americans are living with Multiple Sclerosis, therefore, planning for MS and, for that matter, any chronic illness is something every attorney, CPA, etc. should understand in order to help their clients – it should not be a favor for you. 120 million Americans are living with chronic illness or disability. By 2020, about 157 million Americans will be affected by chronic illnesses. The lives of 26% of those ages 65-74 have been significantly impacted by chronic illness. 50% of those age 85 and older have had some cognitive impairment.
My symptoms can be physical, emotional, and/or cognitive – because of the tremendous variability in MS symptoms, explain yours. For instance:
This is the planning you should undertake to make it easier for you to deal with legal issues and finances as your MS progresses.
Title (ownership) of accounts:
Analogies to help you plan:
Type up a list on your computer so you can update it, email it, and back it up. Disseminate the list to key people, ask for their help, and tell them what they might need to do to help and when. Each professional advisor should have the list in their file. Organize the list by category (e.g., banking, religious advisor, professional advisors, family, neighbors). List info needed for emergency action (e.g., account number, policy number, etc.).
Your challenges, especially cognitive issues affect when effective and scope of powers granted your agent. Consider naming co-agents to build in safeguards and to share work. Plan for exacerbations (unless you have primary progressive MS which tends not to bring exacerbations), organize finances to facilitate management during a short term disability &ndash consider limited durable power of attorney coupled with a broad general power of attorney if you become permanently disabled at a future date. Consider special provisions – e.g., don’t sell my home, modify my home to make it accessible even if the cost won’t be recoverable when the home is sold, etc.
Choose a trusted agent and several successors. Hire a lawyer to draft powers tailored to your disease course and financial situation. Discuss modifications to standard forms:
Does your agent have sufficient knowledge of Multiple Sclerosis and the decisions that might be required? Is your agent geographically close enough to respond to a sudden emergency? Do your medical wishes contradict religious beliefs of your agent or family that you need to address? Are there specific powers or rights which you do/don’t want your agent to have?
Choose an agent and several successors who understand your health situation/wishes. Hire a lawyer to draft a health proxy that accomplishes your personal goals. Determine specific powers to give/not give agent. Sign several originals, distribute them, be sure a copy is included in your medical chart. Discuss your decisions with family, friends and most importantly, your agents.
Statement of health care wishes to guide/direct your health care agent. Address broad array of decisions:
What some call “heroic”, may be essential to you. Differentiate level of treatments at different stages of your disease course. Carefully modify quality of life decisions to reflect MS issues. Direct home modifications. With multiple sclerosis, you may wish to mandate donation of brain and CNS tissues to further MS research. If you experience pain you may wish to specify maximum pain relief even if it shortens life.
Review and consider personal wishes that should be reflected, e.g. religious observances, care instructions. Hire a lawyer to draft a living will that communicates your personal decisions. Discuss modifications to forms: Religious restrictions; organ donations – e.g., CNS to foster MS research; experimental or non-traditional treatments; pain relief perhaps regardless of the impact on life expectancy. Sign several originals, distribute them, be sure one is included in your medical chart. Discuss your decisions with family and agents.
Disclose child’s care information. Indicate medical data. Disclose insurance coverage.
Naming a guardian is all most people do but your child may need formal care arrangements if you are alive but disabled and a guardian appointment under a will won’t accomplish this. Power of attorney should address expenditures for children, not just you. Your financial resources may be limited. Disability and life insurance may not be available or limited to what you had pre-diagnosis – financial planning is vital.
Review all aspects of protecting your children with your advisors. Name trustees under a revocable trust while you are alive and disabled and direct payments for care of children, and trustees and guardians under your will, to provide care. Financial planning – set up 529 plans, review resources. Prepare and sign child emergency medical form. Write a personal letter of instruction. Include directions in your power of attorney addressing children.
Name executors and guardians. Distribute assets. Tax planning (bypass and martial trusts). Trusts for heirs. Plan flexibly – laws and life change. Consider caps on amounts bequeathed to different trusts.
Does it make sense for loved ones to name you executor or guardian? If not, suggest they revise their documents. If you are named a beneficiary, suggest that your possible benefactor name a trust designed to protect you, rather than name you outright.
Wills are important, but if you’re facing a progressive chronic illness it is only one step of many and perhaps not the most important step. Include personal letters of instruction. Consider trusts for minor children. Donate to charities that have helped you – even modest donations send an important “thank you”. Opt for flexibility in case you cannot update the document to reflect future changes. Suggest others establish trusts for you in their wills.
Establish a personalized (not boilerplate) living trust. Transfer assets to a trust during your lifetime. Avoid probate and intestacy. Contain dispositive provisions of your will. Manage assets during disability or illness – unlike a will addresses planning while you are alive and well, or disabled.
Depending on your current status (e.g., cognitive impairment), you can serve as sole initial trustee, but serving as initial co-trustee may be preferable. Tailor clauses to retain control while protecting you. Trustee removal clauses should consider your challenges now and likely disease course – e.g. you can’t be removed unless disabled for 30 days to avoid your removal for a short term exacerbation. Include details on lifestyle you wish maintained. Address care for children and authorize trustee to distribute for them.
See comments for “Wills” above, and coordinate. Boilerplate Trusts, designed to avoid probate, won’t accomplish your goals – be wary of the trust mills. Focus of document should be protecting you (and your loved ones) and communicating your wishes as your disease progresses. Tailor trustee replacement, disability, and other provisions to the nuances of your anticipated disease course. Fund the trust (transfer assets into the trust name) other than retirement assets or professional practices.
Does homeowner’s insurance cover home health aids? If you have disability coverage are you collecting; are your payments correct? If you have life insurance can you borrow against it, convert it to permanent coverage if it is term, can you benefit from a viatical settlement? Does your partner/spouse have long term care coverage? – Consider the impact of your MS on them.
Don’t make assumptions – MS doesn’t mean you don’t have insurance planning options. Have all your insurance coverage reviewed at least every 2 years. Evaluate all options – Can you convert term life insurance to a permanent policy? Can you sell life insurance in the secondary market to free up cash. Standard homeowners coverage may not suffice – do you need a rider for home health workers/home improvements?
Standard provisions are not always adequate. Coordinate with Revocable Trust. What powers should agent have? Give copies to your advisors. Update when banks merge. Revise when tax laws change.
Should a trust for your benefit be named instead of you as beneficiary? Should someone else be named beneficiary instead?
Consider all beneficiary designations: life insurance, pensions, IRAs, brokerage accounts, and more Be cautious about signing beneficiary designations for non-retirement accounts. Obtain copies of the forms you filed and blank forms to facilitate revision. Have family members, who name you as beneficiary instead, consider a trust for you.
Demonstrate important values to heirs. Thank those that have helped. Inspire others to give. Give however you can.
Make a donation (time, cash, insurance, even stuff). Include a bequest in your will – even small bequests can make a big statement. Write a heartfelt letter of instruction to heirs and thanks to those that have helped. Inspire others to give that have the wherewithal to do so.
Educate and inform your fiduciaries. Preparation of beneficiaries.
Explain your finances, family, care, disease, and so forth to your advisors – tell all, so they can help properly. Discuss with family, friend,s or others involved in your life, what help you might need. Can those you expect to rely on really help – do you have alternatives. Express your wishes in face to face meetings and then confirm key points in writing. Consider a consultation/evaluation by a licensed independent care manager.
Nothing remains static:
Estate and Financial Planning For Life: In 12 Steps Get Started Now. For more information: See the National Multiple Sclerosis Society’s website: www.nationalmssociety.org See www.rv4thecause.org or www.chronicillnessplanning.org.
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