The COVID-19 pandemic has raised a lot of valid fears about health and mortality. Simple errands like going to the grocery store and visiting a doctor’s office have created a potential risk for picking up and transmitting a virus that has killed nearly 90,000 Americans so far.
As the coronavirus death toll increases across the country, getting sick – and thinking about what might happen to your loved ones if you pass away – may be weighing heavily on your mind. During quarantine, one productive thing families can do is be proactive about updating their estate plans.
If you do not already have an estate plan, or haven’t updated yours recently, now is the time to tackle this uncomfortable but important task. Here are some important areas to address as you work on estate planning during COVID-19.
1. Your wishes for medical decisions
If you become critically ill, with COVID-19 or any other condition, your loved ones may be faced with some difficult decisions about your healthcare. Medical estate planning documents like a Health Care Directive, a Durable Medical Power of Attorney (POA), and a HIPAA Authorization can make these decisions easier by documenting your wishes for medical treatment.
In the event you become physically or mentally incapacitated and cannot make decisions for yourself, your healthcare providers and your family can refer to these documents and make the choices you would have made if you were able.
2. Management of your finances
Having a Durable General (Financial) POA serves the same purpose as a Healthcare POA, but for decisions regarding your finances. The person(s) you name to serve as attorney-in-fact under your Financial POA (who can be the same person(s) as your Medical POA) will be responsible for making financial choices, ensuring your bills are paid, and managing any investments or business finances you may have in the event of your incapacitation or death.
3. How your assets will be distributed to your beneficiaries/heirs
There are three primary ways to transfer property to beneficiaries: Using payable or transferable on death designations (POD or TOD), having a trust plan to avoid probate, or relying upon a will, where your assets will pass to your named beneficiaries under the supervision (and expense) of the probate court. While you can designate that all your assets pass through your Will, it may be the most ideal way to do so – both because of cost, delay, and lack of flexibility. It may, therefore, be in your family’s best interest that you set up a revocable or irrevocable trust plan depending on your overall estate planning goals and needs. When properly drafted, a trust allows your family to avoid probate, reduce your taxable estate in some instances, protect legacy gifts for the family like a vacation spot for use by multiple generations of the family, and expedite the inheritance of certain assets. This can ultimately save your loved ones time and money.
A revocable living trust in particular is ideal for individuals who want the flexibility to make changes to their estate plans as their life circumstances and wishes change. Additional benefits of using a trust include family privacy (probate court proceedings are part of the public record, while trust documents can only be accessed by your named beneficiaries) and easier, most customized management of assets being inherited by minor children.
4. What happens to your minor children
If you have minor children, your estate plan should include a legal guardianship designation to ensure they will be taken care of in the event that you become ill or pass away. If your child’s other parent survives you, they are typically first in line to assume guardianship. However, if you are a single parent, or if your spouse also becomes ill/passes away, guardianship decisions may be left up to the Court in the absence of a named guardian.
Even if you don’t have minor children, you should be sure your estate planning documents and beneficiary forms are updated so that only the people who you wish to inherit your assets at this point in time are included.
Get virtual estate planning assistance from the Law Office of Patricia E. Tichenor
If you need further assistance with your estate planning, visit our Calendly page to schedule a free Zoom consultation call with us. During your virtual consultation with the Law Office of Patricia E. Tichenor, we will discuss and review your estate planning concerns and needs, and create a tailored strategy for moving forward.