Financial Advice During a Health Crisis


Written By: Brian Ellenbecker, CFP®, EA, CPWA®, CIMA®, CLTC®


It is one of the days you may fear most – you have a serious health event for the first time. This can be challenging for even the best prepared individuals. On top of the health event itself, it can be very emotional for you, your family and friends. Focusing on finances and planning may be the last thing on everyone’s mind, but it may be one of the most critical times to be sure all your “ducks are in a row”.

What can do you to help prepare yourself for a health crisis? Below are some important steps to take to ensure your affairs can be managed while you focus on getting better.

Keep Important Information Available to Decision Makers

If you need a loved one to step in and help manage your affairs during your illness, be sure they have easy access to your most important financial information. Keep your logins and passwords for important websites stored in a secure location that can be shared. The best option is a password manager like LastPass, Bitwarden or 1Password.

Make sure your login information for investment and retirement accounts, bank accounts, insurance policies, liabilities (mortgage, credit cards, car loans, etc.), and regular bills are stored there. Store key documents and information like estate planning documents, tax returns and even driver’s licenses and Social Security numbers securely. A great place to start is in your “Vault”, which is a secure document storage area within your Shakespeare Client Website. Any documents you have shared with us are already stored there.

Understand Available Income Sources

If you’re still working, inquire about the disability coverage you have in place. You may have coverage through your employer and/or you may own an individual disability insurance policy.

  • Short-term disability insurance policies are good for replacing a portion of your salary for the first few weeks of an illness.
  • Long-term policies could replace income for several years.
  • If you paid premiums with after-tax money, the benefits are tax-free. If you paid the premium with pre-tax funds (typically through payroll deductions with your employer), the benefit is taxable.
  • In the case of a long-term disability that is expected to be permanent or result in death, Social Security Disability may be available.
  • If you collect Social Security Disability payments for two years, you also become eligible for Medicare.

Know Your Health Insurance Coverage

Be sure to understand the key provisions of your health insurance coverage. Items to focus on include:

  • What is the deductible?
  • What is the out-of-pocket maximum?
  • Which providers are included in your network?
  • Does the policy limit certain prescriptions and treatments?
  • Are other policies available that give you better access to needed services?

Keep Estate Planning Documents Updated

Estate law has been changing at a relatively rapid pace for the past 20 years or so. On top of that, things can change in your personal situation like family members (births, deaths, marriage, divorce, etc.), finances and your wishes for your legacy.

Your estate documents should contain a will, Durable Power of Attorney, healthcare documents (Healthcare Power of Attorney/proxy), and living will. Many estate plans will also include a Revocable Living Trust.

The Healthcare Power of Attorney (sometimes referred to as healthcare proxy), names the individuals that can make medical decisions on your behalf if you are unable to. A living will or other advance directives are instructions regarding your preferences for medical care if you are unable to make decisions for yourself.

A will makes your wishes known after you pass away. It provides instructions regarding who will receive your assets, who will take care of minor children, who will care for your pets, etc. If you have a Revocable Living Trust, that document will govern any assets owned by it. It helps you manage your financial affairs in the event of either incapacity or death.

Dealing with a family health crisis is difficult enough. Planning early and considering advice from a professional can make the financial aspect less stressful and more secure. Reach out to your Shakespeare team with any questions you may have at 262-814-1600.