Adverse health situations can occur at any time.  As a financial advisor, you can help your clients prepare financially for such events.  Your role is to help the individual or family focus on recovery or dealing with the illness with as little concern about ongoing expenses as possible.

When this happens, a previous financial plan can become less useful.  All of the assumptions may not apply when a serious health issue crops up, especially with little warning.  Presumably if the client has an ongoing or chronic condition, you have addressed the issue but most likely the change in health will create a need to start anew or at least to a great degree.

While planning in advance for health issues should be part of the overall financial approach, a diagnosis suddenly puts a different perspective on the arrangements.  The previous plan needs to be reviewed and adjusted to adapt to the situation at hand.

The client(s) are probably still reeling from the diagnosis and feeling out of control.  As an accountant, you can bring some concrete facts to the table.  It is hoped that this will create some stability.

It is always good to start with a list. 

• Assets – This would include savings, property or other valuables.

• Health insurance, if applicable.

• Life insurance policies

• Retirement savings

• Salaries or disability plans

The other side of the balance sheet needs to be addressed as well:

• Debt – Include mortgages, credit cards, business lines of credit, etc.

• Household and living expenses

• Relatives who may be able to step forward to ease the burden

• Expected cost of care

With all this identified, it is possible to develop a short-term financial care plan and budget.  Depending on the type of illness and prognosis, a longer term focus may need to be developed as well.  The short-term budget will focus on cash flow as well as the tax implications of early withdrawals or sales. 

Your accountant needs to keep in mind the needs of the sick client but also advocate for the future of the family.  It is all too easy to lose sight of the burden on the caregiver(s) and the additional stress of financial insecurity it has on them.

A serious illness is difficult to manage for all concerned.  Accountants can play a significant role in providing a detached perspective and helping the client manage during a difficult time.  If the diagnosis is one that may not be terminal, a long-term viewpoint is important to take into consideration additional expenses in the future.  Working with attorneys and family members, a serious illness can be addressed as a team.  You will probably be the primary contact if money becomes an issue.  Not every situation may be resolved to the financial advantage of the client or family.  That will certainly become an emotional issue for all concerned, including you as the accountant. 

The bottom line is that in a circumstance where a serious and often terminal illness is involved, each person does their part to support the patient and family to the best of their abilities.

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- The Capex Team