The current coronavirus pandemic has changed the world in dramatic and unprecedented ways in an incredibly short period of time. And for many individuals, the pandemic has brought about feelings of powerlessness and caused us to reflect on our mortality. Taking proper precautions is essential to prevent the unnecessary spread of the virus.
However, many individuals may also want to take this opportunity to consider additional estate planning actions that they can take to further protect themselves and their families in the event of unexpected illness or death. And as many are already labeling this time period as “The Great Pause” -marked by huge portions of the population who are unable to work, are working in a limited capacity, or are working from home – it could be an ideal opportunity to get your ducks in a row regarding your estate plan.
Appropriate actions during the pandemic can include some or all of the following:
Consider Your Current Estate Plan
If you currently have an estate plan, review it to determine whether the documents are still in line with your current wishes. Circumstances in life can change quickly, and even if you’ve updated your estate plan within the last few years, any additional births, deaths, marriages, or divorces in your family could likely mean that you need to make updates.
Updates are also essential if there have been major purchases or sales of assets (particularly property). You should also review your executor to ensure that his individual is still the person you would like to serve in the role and that they are still up to the task if the need arises.
Address Advance Directives
Advance directives, such as identifying your health care proxy and power of attorney, and creating a living will, are especially important during times when the likelihood of falling ill in increased. While none of us know for certain if or when we may become ill with a life-threatening condition, the spread of COVID-19 is increasing the risk for many population groups.
And while it’s certainly probable that the majority of the population will not be impacted by a death within the family, it’s always a better course of action to prepare for the unthinkable. In estate planning, this means identifying who should make your financial and medical decisions in the event that you become incapable of doing so yourself. These decisions may be particularly hard and include elements such as what actions you would like taken in the event that you become unable to survive without medical assistance. It is best to select an individual who will act in accordance with your wishes, which may or may not be an individual within your close family.
Look for Opportunities to Reduce Your Tax Burden
One of the primary goals of most estate plans is to facilitate the transfer of wealth between generations and structure this transfer in a way that retains the most assets. One of the best ways to do this is by looking at opportunities to reduce the tax burden, especially the estate and gift taxes. Discussing opportunities for reducing this tax burden with an experienced estate planner can often optimize the outcome when the assets are transferred.
Update Other Information
In addition to these actions, you should also consider any additional elements that may require legal documentation. If you have minor children, you will want to identify a legal guardian.
It’s also crucial to update other things that may be necessary in the event that you were to become ill, such as who currently has access to your medical records. There are strict regulations in place, through HIPAA restrictions, dictating who medical providers can share information with – so if you would like to identify an individual upfront, this should be made clear to your medical provider.
It’s also a great idea to consider updating your list of passwords and digital information. Having a repository to hold all of this information will ensure that your family or other beneficiaries can access your digital accounts and any stored media, such as treasured family photos and videos.
Recognize the Long-Term Value of Planning
While COVID-19 is certainly a danger for many in the nation currently, the reality is that even for those who remain unimpacted by it directly, there will one day be a need for an estate plan. While the current pandemic offers an ideal opportunity for updating your plan (or putting one in place for some individuals), having a current estate plan is always an action that can best protect your wishes and assets – even after the pandemic has passed.