Protecting Your Health and Your Legacy: How Estate and Healthcare Planning Work Together

Jenny Lou Faber |

When most people think about estate planning, their minds jump straight to wills, trusts, and passing assets to the next generation. Healthcare planning, on the other hand, usually brings up questions about long-term care, medical decisions, and who will advocate for you if you can’t.

But in real life, these two conversations are inseparable. For retirees especially, healthcare is often the single biggest variable that can reshape—even erode—a lifetime of savings. That’s why approaching estate and healthcare planning as a coordinated strategy gives you more control, more protection, and more confidence.

In today’s post, we’ll break down how these pieces fit together, the core documents every family should have in place, and why planning ahead protects both your financial legacy and the loved ones who may one day need to step in.

Why Healthcare Expenses Matter So Much in Estate Planning

One of the biggest threats to a retirement nest egg isn’t a market dip—it’s an unexpected healthcare event.

The final decades of life can bring a steep rise in medical costs: hospital stays, rehab, in-home assistance, or long-term care facilities. Not only are these expenses unpredictable, they increase faster than general inflation. For many families, a single health event can dramatically alter what’s left to support a spouse or be passed along to heirs.

Building healthcare planning into your estate strategy helps you:

  • Protect the assets you’ve worked so hard to accumulate
  • Reduce the chance that long-term care needs drain your financial resources
  • Ensure your spouse or family isn’t left scrambling to cover costs
  • Keep your wishes front and center if a future health issue limits your ability to speak for yourself

The Core Documents Every Plan Should Include

A strong estate plan is more than “I have a will somewhere.” It’s a coordinated set of instructions—financial, medical, and legal—that make sure your wishes are carried out clearly. At a minimum, consider putting the following in place:

1. Will or Trust

A will outlines where your assets go. A trust can add privacy, simplify transfers, and help bypass probate.

2. Durable Power of Attorney

This gives someone you trust the authority to handle financial or legal matters if you become unable to do so.

3. Advance Healthcare Directive

Also called a living will, this document spells out your medical preferences and names the person who can make decisions on your behalf.

4. Updated Beneficiary Designations

On accounts such as IRAs and 401(k)s, these designations override your will—making them a critical part of the plan.

5. Clear Document Organization

Keep account details, policies, and essential paperwork in one place. Your loved ones should know where to find everything, not have to piece things together during a crisis.

Long-Term Care: A Key Defense Against Draining Your Estate

Long-term care coverage is often the missing piece that protects both your spouse and your legacy.

Whether care is needed at home or in a facility, costs add up quickly. LTC insurance—or hybrid solutions that blend life insurance and long-term care benefits—can help offset those expenses and preserve assets for your family.

A few reminders:

  • It’s typically more cost-effective to explore coverage earlier
  • Health changes can limit options or raise premiums
  • Every family’s needs and risks look different, so customization matters

Making Hard Moments Easier for Your Loved Ones

A thoughtful plan is one of the greatest gifts you can give your family. When documents are clear, decisions are documented, and responsibilities are defined, you lift a tremendous emotional and logistical burden off the people who care about you.

And if you’d rather not put a child or sibling in the hot seat, professional fiduciaries—such as a bank’s trust department—can serve as neutral decision-makers and reduce the risk of conflict.

A Modern Cautionary Tale: When Promises Don’t Match Reality

Recent headlines have highlighted why working with experienced professionals matters.

NASCAR driver Kyle Busch filed suit against an insurance company after purchasing an indexed universal life (IUL) policy he believed would produce high, tax-free payouts. According to reports, the policy underperformed its illustrations, leaving him questioning whether he fully understood the fees, risks, and assumptions behind it.

While most people aren’t dealing with policies of that size, the lesson applies to everyone:
If something sounds too good to be true—especially in the world of insurance or “guaranteed returns”—it probably is.

Know what you’re buying. Know who you’re buying it from. And make sure it fits your actual financial plan.

Bringing It All Together

Here’s the bottom line:

  • Healthcare and estate planning are deeply connected. Rising medical costs can change what’s left to pass on.
  • The right documents matter. Wills, POAs, directives, and beneficiary updates keep your wishes intact.
  • Long-term care planning protects your assets—and your loved ones.
  • You don’t have to put all the responsibility on family. Professional fiduciaries can step in when needed.

Proactive planning isn’t just about money—it’s about clarity, confidence, and making sure the people you love aren’t left guessing during the hardest moments.

If you’d like to explore these strategies or review your current plan, we’re here to help you navigate what fits your life and your goals.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.