Estate Planning in Turbulent Times

Overnight, our lives have been turned upside down. We are concerned about the wellbeing of family and friends but are advised (or ordered) not to be in their physical presence. Although it may seem as though circumstances are spinning beyond our control, we are not powerless. There are steps we can take to protect ourselves and our families, both physically and financially.

First, we can exercise caution in our interactions with others to ensure their health as well as our own, taking care to stay the recommended distance away from others, especially those who are more susceptible to illness, and washing our hands to avoid spreading germs. COVID-19 is a dangerous virus for some people, but the good news is that a large majority of people have not been infected, and most of those who have become ill are recovering fully.

Constant news reports about the COVID-19 virus have brought the wellbeing of ourselves and our families into a sharper focus, highlighting the importance of planning for the unexpected. A second concrete step you can take to ensure the welfare of your family is to pull out your estate planning documents and take a close look to verify that they still reflect your wishes and are able to accomplish your goals.

As you review your documents, ask yourself a few important questions:

Will your last will and testament and revocable living trust still achieve your goals? In these documents, you have specified how you want your money and property distributed to the beneficiaries you have chosen. In addition, if you have children, you probably have named a guardian in your will to care for them if you cannot and perhaps you have even specified a caretaker for your pet. In your revocable living trust, you likely have named a trusted person to be your co-trustee or successor trustee who can step in to manage the money and property held in the trust even during your lifetime if you are unable to do it yourself. In addition, you have specified how the money and property in the trust should be distributed to beneficiaries you have named in the trust document once you pass away.

Life is constantly changing, so it is important to review not only the people you have named as beneficiaries, but also to consider whether the people you named to act as your executor or trustee are still your top choices. Even if you are still comfortable with your previous choices, are the individuals you selected currently available to act in those roles? Is the person you chose to be the guardian of your children still available and willing to care for them? If several years have passed since you drafted your documents, your executor or trustee may have moved away or may not be willing or able to serve. In the current crisis, the person you have selected may be unavailable due to illness, quarantine, or a stay-at-home order, and if he or she lives out of state, may be subject to travel restrictions.

Are you still comfortable with the people you have named to be your agents under your health care proxy and power of attorney? As mentioned above, because of the prevalence of stay-at-home orders, travel restrictions, and self-quarantines, make sure the person you have chosen is currently available to act as your agent. Consider designating individuals you trust but who also live close by to act in these roles.

If you have a living trust, have you transferred all appropriate assets into the trust to avoid the cost and delay of probate?

If you have an estate that will be taxable under the federal and state estate tax laws, have you taken steps to minimize these taxes. Have you considered transferring assets to trusts to reduce your potential estate tax, freeze values for estate tax purposes and structured the trusts with maximum flexibility to permit use of trust assets by appropriate family members and yourself if that is an important consideration.

Does your living will, the legal document that spells out your wishes concerning end-of-life care, still accurately reflect your wishes, for example, whether you would like to receive life support if you are in a permanent vegetative state or have a terminal condition? Make sure family members have a copy of it or know where it can easily be found to ensure that they will not have to guess about what you would want if you become very ill and are unable to communicate your wishes.

Do the beneficiary designations for your retirement accounts and insurance policies still reflect who you want to receive the funds or proceeds? Now is the time to make any changes that are necessary.

Do you have a current list of all your accounts and important documents? The list should include bank and investment accounts, titles to vehicles and homes, credit card accounts or loans, digital accounts (e.g., Facebook, LinkedIn, and Twitter) and passwords, Social Security cards, passports, and birth certificates, which may be needed to manage your property if you become ill or to settle your estate if you pass away.

Our primary goal is to help you have peace of mind about the future‚ÄĒregardless of the circumstances. Eventually, this crisis will be over but right now, we want you to know that we are still here for you. Please call us if you wish to review your estate plan and discuss appropriate updates.

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