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How should COVID-19 change your approach to estate planning?

by Kelly Gicale | Contributor
April 27, 2020

During these unprecedented times of the COVID-19 pandemic and its aftermath, it has become even more important to make sure you have the right estate plan in place for you and your loved ones. Although most estate planning attorneys recommend updating your plan regularly, few people actually follow this advice, and even fewer have a plan in place at all. Consequently, families are often left with outdated or inadequate plans that result in unnecessary taxes or costs, cause avoidable burdens, and worst of all, do not reflect their loved one's wishes.

Now is an ideal time to either review your estate plan or create one, but you might be wondering how to do so during the COVID-19 pandemic. COVID-19 has not only impacted the way we work, dine and socialize, it also has affected the way we plan for the future.

However, just as in those other areas of our lives, the current crisis has not changed everything about estate planning. There are aspects of the considerations, planning strategies and even logistics that have remained the same. To help you navigate the process of planning your estate during COVID-19, here are a few examples of the ways you can expect estate planning to change, and the ways you can expect it to stay the same.

What are the most important functions of an estate plan?

First, it is helpful to know the primary functions of an estate plan. A well-crafted plan typically allows you to do the following:

  • Determine asset distribution (decide how and to whom your assets will be given)
  • Minimize taxes (on your estate and on the assets transferred)
  • Name powers of attorney (decide who can make decisions on your behalf if necessary)
  • Establish an advance directive or living will (clarify your preferences for certain medical treatments and end-of-life interventions)

How has COVID-19 changed estate planning?

Estate planning is even more critical. Although it has always been important to have an estate plan in place, most recognize that it is infinitely more critical now that we are facing a global pandemic. The primary functions of estate planning are even more essential now that the future is less certain and hospitalizations are on the rise. The best way to protect yourself and your loved ones is by having the right plan in place, and many people have wisely used their time in quarantine to create or update their plans.

Health decisions are of utmost importance. While just a few months ago most people planning their estates were more concerned about how their assets would be distributed, health care considerations are now top of mind instead. Many are now understandably concerned about potential hospitalization and incapacitation, and so they are taking action to ensure their wishes are documented. This means that having an advance directive and the appropriate powers of attorney in place is even more consequential right now.

A few questions to ask yourself about these provisions include:

  • Do I have a legal document naming who can make health care decisions on my behalf if I am incapacitated or otherwise unable to?
  • Are my preferences regarding medical intervention or allowable treatments provided in an advance medical directive?
  • Do I have the legal documentation in place to enable someone in my life to make other legal and financial decisions for me in case I am unable to?

If the answer to any of these questions is "no," then like many others during this time, you would also benefit from creating your estate plan and addressing these key decisions. If the answer is "yes," then your best course of action is to review your documents to ensure they are still accurate. If they are not, then you will want to make sure these are updated as soon as possible.

Estate Plan document updates

There are new logistical considerations with probate and document signing. Avoiding probate remains an important estate planning objective. A plan that prevents prolonged probate proceedings and unnecessary court time and cost is almost always preferred, but because of COVID-19, avoiding court is even more attractive now. In addition to physically avoiding crowded courtrooms, it is even less desirable to have your estate primarily or solely processed within probate. This is because the delays from court shutdowns and modified operations could be long-lasting and substantial. As a result, it is important to review your plan to determine which assets will pass through probate and which will pass outside of probate and see if any modifications are necessary. Or, in creating your estate plan, it may be useful to keep this in mind to prevent your loved ones from having probate drag on for months, or years, because of the sustained impact on the court's caseload.

Getting documents signed during social restrictions presents new challenges. Fortunately, there are many electronic document signing applications available, and most are convenient and easy to use. Most legal documents signed this way are accepted by courts and financial institutions, and they are treated the same as documents signed by hand. So, your attorney or fiduciary may send you something to sign electronically that he or she might have asked you to sign in person pre-COVID-19. However, this is generally not the case with wills, codicils (amendments to a will) and other testamentary documents. While some states have enacted laws to allow for "electronic wills," most still do not have such legislation in place. So, during this pandemic and in the months to come, your attorney may arrange for an unconventional method of signing and witnessing your will that is not in the home or at a law office. Parking lot signings, driveway signings and other outdoor arrangements have become common during this period of social distancing.

How has estate planning stayed the same?

Estate planning will always be important. Estate planning has always been important for those who care about avoiding undue hardship for their loved ones and ensuring their wishes are carried out. Completing your estate plan has also always provided peace of mind, and that kind of relief is even more welcome during a crisis like this.

Everyone needs to plan their future. Although the health care aspects of estate planning have come to the forefront recently, all parts of a complete estate plan are still necessary today. In addition to powers of attorney and an advance directive, you still want to ensure that your assets will be divided as you wish and that your plan is structured in the most tax-effecient way.

Experience matters. Just as before the crisis, your attorney's experience and estate planning expertise are paramount in making sure your plan is executed properly. Often, mistakes made by inexperienced attorneys are not detected until after it is too late to correct them. By working with a knowledgeable attorney, you can protect against the risk of a small mistake preventing your plan from being implemented exactly as you had imagined.

These are only a few ways that estate planning been impacted by COVID-19, but below you will find a chart containing other possible ways that estate planning could change or remain the same:

Changes to Estate Planning Ways Estate Planning is the Same
An estate plan is more critical than ever before An estate plan has always been important for protecting your future
Health provisions are now a major focus (vs. asset distribution It is still important to have all aspects of estate planning taken care of
Electronic signatures may be used for many legal documents Wills, codicils and other testamentary documents may still need to be signed by hand
Avoiding probate is even more attractive because of court delays It is always advisable to understand how your assets will pass to avoid unnecessary burdens and costs
How you communicate with your attorney may change (telephone/electronic) The experience and expertise of your attorney is still key for ensuring your wishes are carried out
Logistical considerations may influence how your attorney structures your estate plan Your intentions and wishes will continue to dictate the strategies your attorney recommends
Yur attorney may recommend strategies to protect your family's finacial wellbeing in anticipation of an economic recession An experienced attorney will always be looking for ways to protect and preserve your assets through expert estate planning

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

Phone - 844.445.3422
Email - info@legacyassuranceplan.com
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