Everyone needs an estate plan. But now, more than ever, if you don't have one, it's time to put one into place so that you can protect yourself and your family. The COVID-19 crisis will end, but we can benefit from this experience by focusing on what's most important to us—our families.
Anthony J. Enea, Esq. of Enea, Scanlan & Sirignano, LLP in White Plains, N.Y., says that since COVID-19 hit his state, he has seen "an increase in the number of people wanting to do an estate plan for the first time. Individuals who have existing plans are looking to update them while those that have no plan are desperate to have one done as soon as possible."
The virus highlights several important aspects of estate planning that we would all be wise to heed.
1. Get the Basics in Place
Durable Power of Attorney (DPOA)
A durable power of attorney allows you to choose someone to handle your financial affairs if you become unable to do so. If you become ill and are placed on a respirator, you won't be able to pay your bills, pay your taxes, deposit checks, or make bigger decisions such as selling real estate or making investments.
Enea suggests that in addition to all the obvious things you want to authorize through this document, it should include " a broadly drafted gifts rider.
The gift rider is critical in allowing the agent to make transfers of assets for asset protection planning purposes, Medicaid eligibility purposes, and estate tax planning."
Last Will and Testament
A will allows you to decide who will inherit your assets and belongings, as well as to choose an executor who will handle the business of the estate. If you don't create a will, Enea warns, "state laws determine who inherits and in what percentages," and the court will appoint an administrator to handle the estate.
You might think a will isn't worth your time because you don't own much, but keep in mind you might not own much today, but in a few years, that could be different.
Kyle Persaud of the Persaud Law Office in Bartlesville, Okla., also points out, "If you have minor children or disabled adult children, a will would enable you to name a guardian of these children." Creating a will is also a gift you give that ensures peace in your family because, "Sometimes, family members fight over even a small amount of property," he says.
Health Care Proxy
Also, sometimes called a health care power of attorney, this is a document that names the person you choose to make health care decisions for you if you aren't able to make them for yourself.
Enea points out, "It also allows you to give specific instructions in writing to your appointed agent. It is an extremely important document for medical decision making and end of life decision making."
A living will is an advance directive that says what kind of life-sustaining treatment you want to receive should you become incapacitated and unable to decide for yourself. This would include the use of a ventilator. You can state what you want and what you don't want so that your family doesn't have to agonize over your wishes.
2. Review Your Plan
You should review your estate plan every few years. Take the time to reread your living will or advance directive so that you know what it says and can be sure you still feel that those are your wishes. If not, it's time to make a change to the document.
If you have an existing estate plan most attorneys do not recommend you make any changes to it specifically because of the coronavirus as long as it "adequately provides for [your] wishes in the event of death or incapacity," says Persaud.
3. Talk With Your Proxy
A lot of the news coverage about the virus centers on the use of ventilators and life-saving treatments that are needed for those who become seriously ill. Enea says this is a good time to talk with the person you have chosen as your health care proxy and your family members about your "wishes about ventilators and respirators." You want them to completely understand your wishes, so they don't have to guess.
4. Give Them Copies
Enea also points out that "If you have COVID-19, you should make sure that your nominated agent is given the health care proxy. A copy of it should be given to your doctor and hospital as well."
You want them to have the documents in hand and avoid a last-minute scramble to locate them in your home. This is also true for your power of attorney and will. Having to find important documents like these during a time of crisis or grief adds to the burden.
While you can't control the virus, you can control your response to it. Making sure your estate plan is up to date is one thing you can do for yourself and your family at this troubling time.