Understanding Disability Insurance and Your Estate Plan

December 17, 2022

Understanding Disability Insurance and Your Estate Plan

While there are common estate planning documents that can be used effectively, there are other legal aspects that one should think about when establishing a complete and comprehensive estate plan that provides the most protection and security. Considering disability insurance could be another critical aspect of a robust estate plan that may assist you in the future. To learn more about disability insurance and your estate plan, please call the Colorado estate planning attorneys at the Johnson Law Group at (720) 463-4333 or text-to-Chat at (720) 730-4558.

What Is Disability Planning?

Starting the estate planning process is critical, and getting started early can make a big difference. Estate planning is not just for the elderly and it does not only have to revolve around what happens when one dies. Estate planning can also incorporate other life-altering situations such as becoming ill or suffering extensive physical bodily harm.

Disability planning within an estate plan describes the process of considering what is needed and must happen should a catastrophic event leave a person incapacitated. At any age, a person can suffer from tragic life events like chronic disease or debilitating injuries that turn their life upside down. While death is inevitable for us all, the unpredictability of life also highlights the importance of disability planning.

Trusts and Disability Planning

A trust, set up correctly, can be a critical part of the disability planning process. Typically, a fully funded revocable living trust can play a key role should a disabling event occur. Suffering a disability can mean that functioning independently on a daily basis is impossible. As such, working and earning a living may also not be feasible. A revocable living trust can work to take care of a person in this situation and also their dependents.

Without a strategic estate plan in place that includes a trust, one’s assets are vulnerable. Having considerable mental or physical disabilities where one cannot take care of themselves or make decisions for themselves could result in financial and legal challenges. Consider visiting with an experienced estate planning attorney at Johnson Law Group to learn all of your legal options.

Disability Insurance and Disability Planning

It is essential to protect one’s estate through different estate planning methods such as a fully funded living trust to avoid the public process of probate. There are other planning tools one can utilize too that can aid themselves and their families during life. Since a disability can happen at any time in a person’s life, disability insurance is another worthwhile part of an estate plan to consider. When something happens that causes substantial injuries or illness to transpire, this type of insurance can be a welcome safety net to help make up for a portion of missed wages lost in the aftermath of such an ill-fated life event.

If you have questions about disability insurance and your estate plan speaking to a Denver estate planning lawyer at the Johnson Law Group is one way to get answers and obtain more information. According to the Centers for Disease Control and Prevention, there are more than 61 million American adults that have some type of disability. Everything from destructive car accidents to medical malpractice and genetics causing disease can be why a person becomes disabled. Purchasing disability insurance in advance can help in these situations.

How Much Disability Insurance Should You Purchase?

A common question that is asked when it comes to buying insurance is how much coverage is actually necessary. For disability insurance, policies that account for up to 70% of one’s salary are a good starting point. Sometimes, though, even though 70% of one’s salary is helpful, it is insufficient for the true needs should a disability event happen where one is unable to work. Here, it may also make sense to add a supplemental plan as well.

Ultimately, the final cost of coverage will depend on several factors. These include a person’s current health status, age, gender, type of employment, lifestyle factors, and more. Finding the right coverage and provider is key because some policies allow for the changing the terms of coverage or denying the renewal of a policy. Visiting with an estate planning attorney can help you understand all of the legal and financial implications of disability insurance, which can help you make the decision that is right for you and your family.

Speak to a Colorado Estate Planning Attorney Today To Learn More

Everyone’s life situation and needs are different. Making the decision to plan for unforeseen life events that have the potential to change your life and those of your loved ones forever is an important decision. Disability insurance and your estate plan work well together because you can ensure that you will have protected both you and your family in the event of an serious long-term illness or debilitating injury. If you suffer a life event that causes a disability, then disability insurance could be the life preserver that keeps you and your family afloat.

If you have questions about how to put together your estate plan or if you would like to learn more about different aspects of a plan, such as how disability insurance could be beneficial in your circumstances, please call the Denver estate planning lawyers at the Johnson Law Group at (720) 463-4333 or text-to-Chat at (720) 730-4558. Our experienced, dedicated, and reliable estate planning legal team offer compassionate legal guidance to help you meet your goals.

Written by Family Law Attorney Myles S. Johnson
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