Each of us faces illness from time to time. We can and should do what we can to prevent illness. However, we also can prepare for when illness does occur.
Preparation for illness has two components: 1) financial preparation for the costs, and 2) legal preparation for decision making authority. The preparation for the costs of illness includes savings through traditional means, such as savings accounts, and obtaining health insurance to help defray the costs. There is also a new method of saving to pay for the costs of illnesses: Health Savings Accounts or HSAs. In order to be eligible for an HSA, you must be covered by a high deductible health insurance program, otherwise known as catastrophic health insurance. Your deductible must be over $1,050 in 2006. If you qualify, you can contribute the amount of your health insurance deductible up to $2,700. Your contributions build up tax-free until or unless they are needed. Your contributions to the HSA can be taken as an “above the line” deduction on your income tax return. In other words, you do not have to itemize deductions in order to take this deduction. This is important because typically medical expense deductions are only allowable as deductions if you itemize your deductions and then only to the extent your medical deductions exceed 7.5% of your adjusted gross income. The number of people eligible for HSAs has tripled in less than a year. The number is expected to quintuple again by 2010, so that 10% of all insured will qualify. If you qualify by having a high deductible plan, a supplemental HSA is a prudent way to save money for medical expenses on a tax-free basis.
Once you have the money socked away to cover illness, you still have to address the legal issues. You need to appoint someone to make health care decisions for you in case you become unable to make your own decisions. A Health Care Power of Attorney serves this purpose. You appoint an agent to make decisions for you when you are unable to do so for yourself. By appointing such an agent, you can rest assured that your health care decisions will be in the hands of someone you trust.
As a part of this process, you can also do an “Advanced Health Directive” or “Living Will” to express your wishes regarding what to do if you are terminal and cannot make end of life decisions.
With the financial and legal aspects addressed, you can focus even more on preventing illness by reducing stress and living life to the fullest. A qualified estate planning attorney can help you address the financial and legal aspects of protecting against illness.
Morrison Law Group, PLC has devoted its practice to estate planning and elder law matters for more than 16 years and has been a Member of the American Academy of Estate Planning Attorneys since 2017. Morrison Law Group, PLC is one of only three firms in Louisiana to be admitted to Academy Membership. The firm has helped thousands of clients throughout southern Louisiana meet their estate planning goals and pass on lasting legacies to their loved ones. To learn more about how you can achieve your estate planning goals, please call our office at (504) 831-2348 or contact us through our website.
- A Time for Thanks and Community - November 23, 2023
- Tips For Widows/Widowers - November 2, 2023
- Assignment and Nominee - October 30, 2023
