ESTATE PLANNING & COVID-19
We know too well that COVID-19 is having a serious impact on our community as well as around the world. We appreciate that there are numerous uncertainties that surround each of us. My intent with this article is not to be an alarmist, but the recent spread of Coronavirus has caused many clients, friends and family members to contact me about Estate Planning during this pandemic that is affecting the world. No one knows if things will get worse, however, based upon how easy it appears that coronavirus is spreading and its potential mortality rate being relatively high, it is something we all need to address.
The numbers seem to indicate that 80 percent of the cases turn out to be relatively mild for the most part. The numbers also seem to suggest that approximately 20% of cases turn more severe. As more data comes in, it appears that the mortality rate will be dropping more than earlier anticipated but certainly a mortality rate even around 2% is problematic. Yet, data keeps changing as more and more are reported. Since it seems to be spreading easily and staying on surfaces which apparently hold the virus for some time, and it seems to affect people unlike other recent viruses (MERS, SARS, and others), there is simply much we don’t know. Many have called because of their concern about their lack of having a plan. Obviously, we all wonder, what will happen if things get worse as many experts have suggested. Just like you are preparing to protect your family with stocking up on food, medicines, gardening supplies and the like, you have to ask “What should I do from a legal perspective?”
First things first. Do you have a Will or Living Trust? If you do, make sure they are up to date and accurate. Do your plans reflect your intentions if you were to die tomorrow?
Some quick things to think about:
Is the named personal representative or successor trustee still the person you want to carry out your intentions?
Have you correctly named all beneficiaries, are they still living, do you need to make any changes?
Is the beneficiary a responsible person? Should they receive their gift outright or should it be given to them in a trust for their long-term benefit?
Are there new people in your life that need to be included? Are there others who need to be excluded from your plan?
Do you have your beneficiaries properly identified in insurance policies, your IRA or 401(k) or annuity plans? Do they need to be changed? Remember, these do not pass by your Will and are likely not in your Trust, so that your Will and Trust should not control all of your assets. Are your affairs in order?
Of course, the above is assuming you do have a Will. If you don't, then you immediately need to address the issue. Everyone needs a plan!
Do you have a Trust? If you have a Revocable Living Trust, are your assets and property properly prepared to transfer to your Trust? Are they properly titled in your Trust? Have you obtained something new that has not been properly identified or titled?
Is your Durable Power of Attorney up to date? Do you have one? Do you have your advance directives, healthcare directives, or Living Will up to date? All these are important in the event that you become incapacitated. With the coronavirus issues that are now being presented, many patients find themselves incapacitated, hospitalized, and unfortunately a high number on respirators. If you don't have these, you need to contact a good elder law attorney (please avoid downloading them from the Internet) and have a customized personal plan put in place.
With these important questions addressed, there are a few additional items you need to consider.
Please understand that Florida does not recognize handwritten or as they used to be referred to "holographic" Wills unless they are executed in the correct formality as required by state statute.
While we believe an Estate Planning attorney should be used to create your estate planning documents, any Will that you do must be signed in the presence of two witnesses, who all signed the documents in each other's presence. The best practice is to also have them notarized at the same time. Obviously, if you been affected by coronavirus, and you're sick or even asymptomatic but tested positive, signing your Will could get other people (your witnesses) sick and it may prohibit the final execution of your documents.
So, what's the big deal?
Dying without a Last Will and Testament, means that your estate will have to go through the Estate process. This is called dying “intestate” and probate becomes involved. The Statutes clearly intend to make sure that your beneficiaries receive your estate through proper distribution however, there is no guarantee that the state through the probate process will make sure that your gifts, bequeaths and/or property will go to the person you want them to.
Thus, everyone should focus on avoiding probate (the proper way- yes there is a bad way). This is best performed by having good legal advice on asset ownership, identifying what assets are going through probate, what assets are in your Living Trust, what assets are distributed by the way of you Will, etc.
To be clear, during this time of emergency (or for that matter periodically) you can address the following questions to see if you are adequately prepared for your death or incapacity.
Understand that a good plan is necessary to ensure that your wishes are followed so that the heirs you want receive assets are the ones who actually receive them. The questions you need to ask yourself are as follows:
___ ___ I recently reviewed my Will/Trust to ensure that it is accurate to meet my current
wishes and needs.
___ ___ Have I created a Durable Power of Attorney, Healthcare Surrogate and/or Living
___ ___ Do I really know what my original estate planning documents are, do I really have
___ ___ Do I need a Revocable Living Trust to save errors time money and potential
___ ___ If I have a Trust, have I funded it?
___ ___ Are all my assets that I want to bequeath upon my death properly identified and
___ ___ Have I updated my beneficiary designations in my life insurance policies, my
retirement plans (IRA, 401(k)) annuities to make sure this is what I still want?
___ ___ Have I made a "memo" or a "separate writing" for the distribution of specific items of personal property that I want my personal representative to handle?
___ ___ Have I updated my current Durable Power of Attorney in the last 1-2 years?
___ ___ Have I discussed my wishes and directions with family members (especially my
spouse) including those nominated as my personal representative, my trustee, the one who will hold my Power of Attorney, etc.?
___ ___ If I have safety deposit box, do I have an heir named on it in the event of my death?
___ ___ Do I have my Estate Planning documents in a safe place, known to my
heirs, and especially my personal representative?
If you should answer “No” to any of these questions, it may be time to address them immediately to avoid any potential problems as we deal with this pandemic.
We are all facing numerous uncertainties right this moment. Legal issues surrounding your Estate Planning, your Wills, Trust, and planning for your family, your future and the directions of your intent should not be one of the things you have to worry about.
Only you can decide when it is time to get a checkup on these items, and if so contact your Estate planning lawyer. We suggest you get these matters addressed before COVID-19 becomes a bigger issue.
Be well, stay safe.