Expert Voices: Financial planning for people with multiple sclerosis

In the first installment of our new series, “Expert Voices,” Multiple Sclerosis News Today asked Martin Shenkman, a certified public accountant and lawyer, to answer some of your questions related to financial planning for people with multiple sclerosis (MS). 

Shenkman is an attorney in private practice in Fort Lee, New Jersey, and New York City. He founded ChronicIllnessPlanning.org, which educates professional advisers about planning for clients with chronic illness and disability. Shenkman has written more than 1,275 articles and 43 books, including for the Michael J. Fox Foundation for Parkinson’s Research, the National Multiple Sclerosis Society, and the COPD Foundation. Visit his website at shenkmanlaw.com.

Generally speaking, what is financial planning, what does it involve, and why is it important?

Martin Shenkman is a CPA and lawyer who specializes in financial planning for those with chronic illnesses. (Photo courtesy of Martin Shenkman)

Financial planning in its broadest sense (and that is how consumers should view it) is planning for a wide range of goals and objectives like: budgeting to make sure you can meet expenses, retirement planning to be certain you are on track to eventually retire (or if you are retired that you won’t run out of money), insurance planning (to protect you against a wide range of risks that could be devastating — property casualty, liability, long-term care, life insurance, and more) and estate planning (to make sure you have the right planning and documents to protect you from health issues, disability, and your loved ones against your death).

What additional factors do people with MS have to take into consideration when planning their finances? 

When you have MS, you may face a shorter work life so you need to adjust your budgeting, investment planning and more to address that. You will face higher medical costs. You may face short durations when you have an exacerbation and may need someone to assist you. So you need the proper organization of your finances and the appropriate legal documents to facilitate that. It is important to simplify and consolidate financial accounts and communicate the relevant information to those you will rely on. You also need the right legal documents to authorize someone to step in and help you. These include a durable power of attorney for financial matters and a healthcare proxy for medical decision-making.

After an MS diagnosis, what steps should one take to secure their financial future? 

Immediately meet with your insurance consultant and review ALL insurance coverage. You might need to increase auto and liability coverage. What if you get fatigue or other symptoms while driving? Review life insurance. If you have term insurance, does it have options to convert to permanent coverage? You might want to do that while you can as you might never get the option to get the same type of coverage again in the future after your diagnosis. Review all health insurance coverage to understand what it means with the new diagnosis and costs you will face. Also, evaluate what MS may mean to your career/job. If you may have to stop working in five years (ask your neurologist), what happens to your insurance coverage and your uncovered medical expenses? If you then qualify for Medicare review, what costs will you be responsible for?

If a family’s chief earner (not near retirement age) has been diagnosed with MS, how can they prepare for the future financially?

Review health insurance as addressed above. Review your disability insurance to see what you have in terms of benefits and what requirements you may have to meet. Complete a realistic budget and cut it as required to address your new reality. Meet with a financial adviser to review both the budget and your investment plan. All may have to change. It will be really tough, but evaluate options that might secure your financial future. For example, you might need to sell your house and scale back. Don’t put these decisions off as immediate action may make all the difference.

For those with a chronic disease, what are common financial planning pitfalls or errors?

Many receiving a diagnosis of a chronic illness are in denial for a long period of time or cannot emotionally deal with the impact. No matter how hard it will be — and it will be really hard — jump on your new reality and take immediate steps. Many are uncomfortable talking about their new reality. You have to talk to a financial planner, insurance consultant, and others to do the planning you need to do. If you defer cutting your budget, selling a home, exercising options on life insurance, and other vital steps, you might lose critical options.

From a financial planning lens, how does one prepare for the possibility of becoming unemployed due to illness?

There is no magic bullet and don’t buy lottery tickets. Create a budget and then cut it, then revise it, and cut it again. If you have a spouse that is not working, they might have to take on a job. If your spouse or partner is working, they may need to step up with a second job or other options to expand income earning capacity. If you are working maximize your current savings, review your investment planning with a financial planner. Meet with a lawyer and evaluate your rights at your job. If you are a shareholder in a business, have your lawyer review all legal documents so you can ascertain your rights.

What strategies would you recommend for those balancing medical costs with paying off large debt?

That is tough. See if you can refinance the debt at a lower rate. Work out a payment plan. Meet with a financial planner. If the numbers don’t work, speak to a bankruptcy lawyer so you can plan. Deferring tough decisions only makes it worse.

What medical tax breaks might be overlooked?

If you have to improve your home to make it accessible, you might be able to write off those costs to the extent that they don’t add to the value of your home. While medical expenses used to be deductible since 2017 when the standard deduction was doubled, most Americans will not get a deduction for medical expenses. Speak to a CPA to plan in case there is anything you can do to get deductions to help with the new costs you face.

What is your advice when it comes to health and life insurance for those with a chronic disease? 

As soon as you are diagnosed, call your insurance consultant and also have a consultation with a lawyer, (Pay hourly at this point; don’t sign up initially for someone who will charge a percentage of what they collect for you.) Find out your rights and options. Then assess next steps.

What do you advise when it comes to estate planning for people with a chronic disease?

You need to update your documents (or get them if you don’t have them) for your new reality. You must have a durable power of attorney. That is a document that names an agent to act on your behalf if you cannot. “Durable” means it meets your state law requirements to remain valid even if you become disabled. Get a healthcare proxy designating an agent to make medical decisions for you. Sign a HIPAA release authorizing someone, perhaps the same agent, to access medial records and speak with physicians.

Is there anything else you think is important for people with MS to be aware of when it comes to their financial planning?  

Take full advantage of the great resources that the National Multiple Sclerosis Society and other organizations have created. You are NOT the first person with these struggles. Let yourself benefit from the efforts so many others have made.

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Expert Voices is a monthly series involving a Q&A with an expert in the MS space about a specific topic. These topics and questions are curated from a survey in which we ask readers what they want to learn more about from experts.

Multiple Sclerosis News Today is strictly a news and information website about the disease. It does not provide medical advice, diagnosis, or treatment. This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website.