Protecting your financial future from medical bills that result from a serious illness or injury can help you prevent bankruptcy and other catastrophic debt. While surgery, physical therapy, and other medical costs can skyrocket out of control quickly, establishing a living trust before they occur may help you protect your savings and other assets.
Consider Your Medical Risks
Before you can set up a living trust to protect your finances, it is important that you consider your risk connected with the likelihood that you will incur large medical bills. To do so, you can review several different factors that may include:
- Pre-existing medical conditions
- Your current health/recent medical procedures
- Your risk for stroke or heart attack
If you are unsure about your current medical status, you may want to have a complete medical checkup and ask your doctor to check for any issues that could cause your health to decline over time, such as type II diabetes.
Review Your Current Assets
Before you hire a lawyer to help you draft a living trust, you may want to gather and review your assets so you understand what your belongings are worth. Include cash, checking and savings accounts, cars, and real estate. You may want to keep in mind that vehicles and real estate may depreciate in value over time, so occasional adjustments of the total worth may be necessary.
Create an Irrevocable Trust
You may be able to protect your assets with more certainty if you create an irrevocable trust. Unlike a revocable trust, this type of document cannot be changed or amended in any way once it is set up. This can help guard the contents of the trust from creditors, including hospitals and other medical facilities. This can be especially helpful if you want to protect assets for your children or grandchildren and ensure the money is there for the future, even if you do incur significant medical costs due to a sudden illness or disability.
Speak to an Attorney
While it is possible to set up a living trust on your own, doing so with the assistance of an attorney can give you peace of mind that the documents are valid and correct. An estate planning lawyer may also be able to advise you about how to organize your assets, how much to add to the trust, and what kind of taxes you may have to pay on it.
A trust can protect your assets from medical expenses, especially when an illness or accident causes catastrophic debt. Contact a lawyer today for additional information and assistance.