With the ever-increasing number of deaths in the U.S. from Covid-19, many people are now doing what estate planning attorneys have advised them to do for years—get their estate plans in order. Many are having phone meetings or videoconferences with estate planning attorneys, says Barron’s in the article “The Coronavirus Has Americans Scrambling to Set Their Estate Plans. Here Are Some Key Things to Know.” People are worried, and they are in a hurry too.
However, estate planning can be complex, even when there is plenty of time to prepare. Here are a few tips:
Everyone should have three basic documents: a last will and testament, a durable power of attorney and an advance health care directive. These documents will allow assets to be distributed, give another person the ability to make financial decisions, if you are too sick to do so and also allow another person to talk to medical professionals on your behalf on treatment and care. These same documents are also a good idea for any young adults in the family, anyone older than 18 in most states.
With the proper documents prepared in accordance with the laws of your state, you may be able to avoid having a court appoint a guardian for minor children, a guardian and/or conservator for yourself while you are alive and not able to manage your financial affairs either due to physical or mental incapacitation.
In addition to these basic documents, everyone needs to review their beneficiary designations on assets that include bank accounts, IRAs, annuities, insurance policies and any other assets. If family situations have changed, these may be out of date.
Other issues to be discussed with an estate planning attorney:
- Living trusts (whether revocable or irrevocable), which provide an opportunity to direct how assets in a trust will be held, invested and distributed before and after death, can avoiding probate, and, in the case of irrevocable trusts, can protect assets and make the trustmaker eligible for Medicaid or MassHealth when or if the trustmaker needs skilled care in a nursing home.
- Estate tax minimization strategies.
- Charitable giving planning.
- Durable powers of attorney, which appoint an agent to make financial decisions.
- Health-care surrogates, which let people designate a surrogate to make health decisions on their behalf and receive health care information from physicians.
- Living wills, which allow people to designate whether to provide life-prolonging treatment, if in a terminal state.
Reference: Barron’s (March 22, 2020) “The Coronavirus Has Americans Scrambling to Set Their Estate Plans. Here Are Some Key Things to Know”