Preparing for Coronavirus
Below we have assembled several Healthcare, Financial and Estate Planning considerations that are particularly relevant for those wishing to best prepare for the Coronavirus.
If you catch the coronavirus, are you going to be able to get the care you need? Here are a few tips.
- Make sure you have Health Insurance. If you do not already have a plan, the marketplace may be having a special enrollment period. If you are able to Maximize HSA contributions a High Deductible Health Plan is usually the best deal.
- Have a Power of Attorney Ready. In case you are denied a ventilator you need to have both your Health Care and General Attorney-in-Fact acting quickly to file an emergency injunction as well as be looking for other sources of care.
- Get a Health Savings Account. If you have an HSA and maximize your contributions you will build a health care emergency fund to use toward your deductible or other healthcare costs. These accounts receive excellent tax treatment as you get a tax deduction for yearly contributions, investment money pays no capital gains tax, and when you spend the money on health care you pay no income tax on the back end either!
- Pay for Medical Expenses with FSA before using HSA savings. You also get a tax deduction for using an FSA but the funds only last for a calendar year and cannot be invested. Therefore you may want to contribute to the FSA only for paying for medical care instead of depleting your HSA savings
- Maximize HSA Contribution. Depending on available resources now may be a good time to invest in your HSA account as the stock market is in a dip. At this time you can still maximize 2019 contributions as well as 2020, equalling over $7,000 for an individual. However, if you are a lay investor please speak to a professional on how to allocate your funds effectively.
Has the current crisis caused you to lose income or savings? Here are a few tips to makes the most out of a bad situation.
- Build and sustain a 6-month emergency fund. Many advisors recommend a 3 month to 2-year emergency fund. We believe 6 months is a good middle-ground for most to strive toward to get through emergencies like the current one. If you don’t have 6 months of income saved, now is a good time to start!
- Invest additional savings. The market is currently in a slump due to the pandemic, which essentially means that many investments are on sale. If you have the extra funds, now may be a great time to put them to work instead of selling the investments you do have at a discount.
- Get or Increase Disability Insurance. What would happen if your lung function were to be damaged because of the Coronavirus and you couldn’t work anymore? This or many other things cause 1 in 4 Americans to go on disability at some point. Though the government offers some benefits through Social Security we recommending getting a private policy to make sure your income would not take a hit at all.
- Life Insurance. It’s a worst-case scenario but term policies are cheap and it’s important to get it now because if you get the virus it will be next to impossible to qualify or afford.
- Government Programs. New programs are rolling out everyday that can help individuals get paid sick leave, obtain affordable mortgage rates and more, keep an eye out for programs that you can use.
Estate Planning Considerations
You will likely have many years left on this earth but it is never to early to start planning and sometimes an event like this is a need push to get things started. Here are a few documents that are more important now than ever:
Living Will – This Document allows you to make end of life decisions such as whether to pull the plug, instead of leaving that burden on family.
Healthcare Power of Attorney – This document allows someone you trust to make Healthcare decisions for you if you are unable. There is also a Financial Power of Attorney for legal and financial matters.
Last Will & Testament – This document allows you to name an executor to administer your estate as well as allows you to distribute probatable assets. Parents should also use this document to name a guardian and trustee for their minor children.
Family Trust – This document is highly customizable and can be used to provide for your family now and after death, as well as protect funds from taxes and creditors.
Beneficiary Designations – These should be used for cash, investment, and insurance accounts to avoid probate.
Deeds – We recommend either transferring your real property to beneficiaries before death or leaving the property via a transfer by death deed, instead of leaving it up to your beneficiaries to draft deeds of confirmation.
Last Wishes and Inventory. This document is a tool for your loved ones where you can leave any instructions or details they may want or need to know.