By: Martin M. Shenkman, CPA, MBA, JD
Financial Planning for Those Living with Multiple Sclerosis or Other Chronic Illnesses
Introduction to Financial Planning for those with MS
For those living with Multiple Sclerosis (MS), Lupus, Parkinson’s disease, Alzheimer’s disease, ALS, or other chronic illnesses or disabilities (we’ll just refer to them collectively as MS for this article), and their financial and other professional advisers, planning must be viewed through the lens of MS. Standard rules of thumb, or generalizations about how you might think MS affects financial planning can prove dangerously wrong. The starting point for most investors is to define their goals, present their advisers with the facts, create a plan, implement and then monitor that plan. For those living with MS, and their loved ones, the first step is to honestly assess your current health status and the likely course of your disease. Then each of the next phases can be addressed appropriately. Monitoring, however, takes on special importance. Given the uncertainty of how your MS might progress, the hope of new therapies in the pipeline, regular monitoring is more important than for others. Another key distinction for those with MS is the potential of an unexpected exacerbation (attack) and its impact on you and your loved ones. This risk needs to be addressed in every plan. Remember, not only does every chronic illness have its own unique disease course and circumstances, but your experience of your particular illness may be quite different than many other people living with the same chronic disease. Any comments below should be viewed through the lens of your personal situation and circumstances. See Estate Planning for People with a Chronic Condition or Disability http://www.demosmedpub.com/prod.aspx?prod_id=9781932603668 for more information.
Define Your Goals
What do you wish to accomplish? What type of lifestyle to you want to maintain? Where do you want to live? If you reside in a hot Southern climate, might you wish to relocate to a cooler region to minimize the difficulties heat causes to many with MS? Do you have loved ones who rely on you financially and that you want to take care of? Every person has their own unique set of goals. Identify and write yours down.
Determine Your Resources
Once you have determined your goals, you need to assess the resources you’ll have to meet those goals. Prepare a balance sheet (listing of assets and liabilities). List the sources of cash flow that you have. These might include:
Wages or profits from work or your business. Realistically note how long you expect to continue generating those earnings.
Social Security, private disability, and other periodic payments. If you receive private disability payments, when will they end?
Interest, dividends and other passive income.
This information is essential to determining how you will provide for yourself and those who may depend on you. For free templates to organize key information, see http://www.laweasy.com/viewall.php?cat=financial&type=form.
Estimate Your Needs
The foundation of every financial and estate plan is a budget. For those living with MS, or supporting a loved one with MS, additional costs may have to be estimated. What will it cost to make your home accessible? What do your therapies and other medical needs cost. If these are covered by insurance or government programs, note this. Are there other special expenses that you might incur? Along with these, estimate the typical cost most people do: college for the kids, retirement expenses, and so forth. Your financial plan should include savings for a large cost to possibly make your home accessible in 10 years just like others plan to meet a future college cost or second home purchase.
Everyone needs to protect themselves from financial fraud and abuse. For those living with MS, many of the steps are similar, but more is advisable and the steps you take should encompass your experience with MS and your likely disease course. While most people living with MS don’t experience significant cognitive issues, enough do that the risk of this should be planned for. Simplify and consolidate your investment accounts, use automatic bill paying for as many bills as possible, have duplicate monthly statements sent to a trusted family member or friend. These steps will make it easier for you to stay in control of your finances if your disease progresses, and they will minimize the difficulties you, and those helping you, will face in the event you suffer an exacerbation (attack).
Disseminate Emergency Information
Make a detailed listing of all key personal, financial and related information and give it to several trusted friends and family members. While this is standard advice for everyone, if you’re living with MS you need to be certain that trusted people who are willing and able to help should you suffer an exacerbation have the information to do so. List: key financial accounts (account number, bank or brokerage firm, contact/planner name and phone number — the fewer the accounts the less details to address); key bills that have to be paid (the more on auto-pay, the fewer that will need to be addressed in an emergency); medical providers names, phone numbers and specialties; religious adviser and contact data; location of key legal documents (power of attorney, living will, etc.) and a contact name and phone number, with a listing of key neighbors and family with contact information.
Plan Your Investments
Your investment plan must be tailored to your specific situation. If you are in your 30's and might only be able to work another 15 years you may need a more aggressive investment plan to reach your financial goals at an earlier age than most people. If you have a large expense to make your home accessible in light of a recent attack, more liquidity than might otherwise be the norm will be advisable. Plan just like everyone should, just tailor the planning to address your specific MS implications.
Customize and Sign a Living Will and Health Proxy
Every adult should have a living will (statement of health care wishes) and a health proxy or medical power of attorney (appoints an agent to make medical decisions for you). Be very careful relying on standard forms. They may not address your present, and likely future, MS experience. Most standard forms don’t address religious and other personal preferences either. Be certain to sign at least three originals of each, and have an agent and trusted friend or family member each have an original. Also, be certain your primary care physician has a copy. If you suffer an exacerbation, it will smooth the way if these documents are already part of your medical records.
Customize and Sign a Durable Power of Attorney
Every adult needs to sign a power of attorney which authorizes a named person (agent) to handle financial matters for them. If you have MS, you need to tweak the standard powers to fit your situation. To deal with the possibility of an unexpected attack, consider a power that is effective immediately (not “springing” into effect only if the agent can prove your disabled). This power might limit the agent’s right to change beneficiary designations on insurance or retirement accounts or sell your house. If you suffer an exacerbation that makes it difficult for you to address financial and legal matters for a period of weeks, you don’t need to relinquish total financial control. Rather, you need to empower someone to address emergencies during that time frame. You might then choose a more typical power of attorney that will protect you if you become fully and totally incapable of handling financial and related matters.
Protect Your Minor Children
As with much of the planning above, you need to have in place a back up plan to care for your children if you suffer an attack. If your children have another parent, that might be the easiest plan. If not, be certain to make arrangements, document key information the designated caregiver will need, put in place a mechanism to notify the caregiver if you suffer an attack, and sign a document authorizing that caregiver to take care of your children and their medical emergencies if you cannot. A guardian appointment under your will is important, but that won’t empower someone to help your children while you are alive. For a free sample form see: http://www.laweasy.com/file.php?file_id=20060626114731.
Sign and Implement a Revocable Living Trust
The best mechanism to protect you during the advance of your MS is a funded revocable living trust. You’ll need to hire an estate planner to implement this.
Give Back – Support Charities that Help You and Others with MS
Charitable gift annuities (CGAs) are commonly used by many elderly to obtain higher cash payments than they could obtain from a CD or money market account. If you or a loved one are living with MS, the added bonus is that they will help the organizations helping you! Be careful, however, not to commit too much of your investment assets to CGAs, as you cannot access the principal in an emergency. If you’re wealthier, speak to your investment manager and estate planner about using charitable remainder trusts.
Financial and related planning is important for everyone, but if you or a loved one are living with MS or any other chronic illness, it is even more vital that you take steps to plan and protect yourself. Planning is similar to that everyone pursues, but depending on your personal experience with MS or another chronic illness, and likely disease course, there could be important modifications to your financial planning, investment approach and estate planning documents. Always work with professional advisers to assure that your planning is done correctly and in accordance with your state’s laws.
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