Wife had a stroke. Need to protect family and estate.

[u/FunnyWalkingPenguin]

My wife (38) had a stroke that left her with no motor function. She will require care for the rest of her life. We have two little girls. 11 and 8. I need advice on how to protect the estate if anything were to happen to me. I don't want her ongoing care to drain the estate if I'm gone. I also need to set up protection for our kids. I have so many questions about long term disability, social security, etc. I'm overwhelmed and don't know where to begin.

Edit #1 I am meeting with a social worker this afternoon. UPDATE: Social worker was amazing and she says the kids are doing very well and to keep doing what I'm doing. The kids like her and I'll continue to have her check in on them.

Edit #2 My wife has a school loan. Can I get this absolved?

Edit #3 My wife is a RN making $65k/year. I've contacted her manager about her last paycheck and cashing out her PTO.

Edit #4 WOW amazing response. As you can imagine, I have a lot going on right now. I plan to read through these comments this evening.

Edit #5 Well, I've had even less time than expected to read everything. I've been able to skim through and I'm feeling like I have a direction now and a lot of good information to reference along the way.

Edit #6 UPDATE: She is living with her retired parents now and going to outpatient rehab 3 days a week. She is making progress towards recovery, but at this point she still needs more attention than I can provide her. The kids and I travel the 2.5 hour drive every weekend to be with her. I believe that she will eventually be well enough to come home, but I don't know when that will be. Could be a few months, or it could be a few years. Recently, she has begun to eat more food orally and I think we are on a path to remove her feeding tube. She is also gaining strength vocally. She's hard to understand, but she says some words very well. A little strength is returning to her left side, but too soon to tell if it will continue. Her right side is very strong. She can stand with assistance. Thanks to the Reddit community for your concern. I hope to continue posting positive updates.

[u/StarryC]

Ridiculous, but true. However, a tax professional might be able to help. It may be her income alone, and I believe it may take up to 3 years to fully process the discharge. Assuming 3 years from now her income is disability benefits of about $1,000 a month, and her loans are $50k, that would put her income to $62k. It may be possible to offset a lot of that with medical expenses exceeding her income. Certainly, OP should have their taxes done professionally for the next 2-4 years because it could save thousands of dollars to plan correctly.

[u/dreamsofaninsomniac → u/StarryC]

My dad got automatically inducted into this program last year. You do have to pay tax on the discharged debt but it is after 3 years once they send you the 1099-C, unless you get it forgiven under special cases like bankruptcy. More info here from the IRS site: https://www.irs.gov/taxtopics/tc431. You can also research "taxable income on canceled or forgiven debt."

ETA: If you read further down the thread, evidently the new Republican tax bill is seeking to eliminate taxation on federal student loans that have been discharged due to disability after Dec 31, 2017 so might want to wait a bit to see if that provision passes.

[u/sysadmincrazy → u/StarryC]

Wait... You guys get a student loan which has interest but if you can absolve it, it's classed as income?

That's insane..

A loan isn't income

[u/Coffee_And_Bikes → u/sysadmincrazy]

A loan isn't income, but when you don't pay it back it becomes income (i.e. money you received that has no obligations upon it). As a rule it makes sense, but as others have said there need to be exceptions for cases where someone clearly has little or no obvious route to paying it back.