How can I protect my assets from medical expenses?
Mia Phillips
Updated on March 13, 2026
Top 5 Steps to protect your Assets from catastrophic medical expenses:
- Secure a Health Savings Account Qualified (HSA) medical plan.
- Fund the tax deductible HSA to the maximum allowed by law.
- Purchase a critical illness product.
- Purchase a Long Term Care (LTC) policy.
How can I get money for medical expenses?
Federal government and non-profit funded grants can help pay medical bills. The resources are available from a number of private as well as public organizations. They can be a very good option to those who have limited resources and are out of options when it comes to paying health care bills.
Can I reimburse myself from HSA for last year’s medical expenses?
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year? Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time.
How do I protect my inheritance from creditors?
The person or people leaving you an inheritance can also shield those assets from creditors by placing them in a trust. A type of irrevocable trust used when there are concerns about an heir’s ability to preserve the estate is a lifetime asset protection trust.
How do I prove my HSA expenses?
Essentially, any money that comes out of your HSA must have a receipt showing it was for an eligible medical expense. You may face a 20% penalty on any distribution that you cannot prove was for a qualified medical expense.
What is the penalty for withdrawing HSA funds?
Yes, you can withdraw funds from your HSA at any time. But please keep in mind that if you use your HSA funds for any reason other than to pay for a qualified medical expense, those funds will be taxed as ordinary income, and the IRS will impose a 20% penalty.
How are qualifying contributions taken into account for medical expenses?
Qualifying contributions will be taken into account in the determination of the medical allowance. Contributions must have been paid in respect of a specific tax year in order to be taken into account for that tax year. This means that contributions paid in tax year 2 which relate to tax year 1 may only be claimed in tax year 1.
How to calculate medical expenses back from tax?
Now let’s calculate the excess scheme fees by applying the formula for someone under 65 years old without a disability. Next we need to determine the Additional Medical Expense Credit by subtracting 7,5% of Samson’s taxable income from his total out-of-pocket medical costs plus the excess schemes credit.
How to calculate the additional medical expenses credit?
Additional Medical Expenses Credit = (Total qualifying spend + excess schemes credit) – (Taxable Income x 7,5%) (R25,000 + R11,328) – (R360,000 x 7,5%) = R36,328 – R27,000 = R9,328 Remember the additional medical expenses credits is 25% of the sum of excess fees and qualifying medical expenses, so let’s work that out.
How are out of pocket medical expenses calculated?
Out-of-pocket medical costs (i.e. those not reimbursed or claimed from medical aid) Excess medical aid contributions are relatively straightforward to work out as you’ll use the total amount you paid towards medical aid as your base amount and then apply the formula applicable to your individual situation. We’ll get to this in just a moment.
