As Millie sits in her kitchen homeschooling her children, she realizes that she really doesn’t remember much of the math she learned in 5th grade. During a break, she turns on the television and a news brief flashes on the screen with Governor Northam informing Virginia residents that schools will be closed for the remainder of the school year. Millie’s husband, James, takes his lunch break to check out the supermarket to see if toilet paper, water, and eggs are back in stock. Later that evening, he retreats to the backyard to catch up with one of the neighbors who is sitting in a lawn chair on the other side of the fence, due to social distancing. This is what’s happening today, and no one knows when things will go back to normal.
The rapid global impact of coronavirus (COVID-19) has been unsettling, to say the least. Social norms that we have taken for granted have been pulled from us, and have left most of us nervous for the future. The sad fact is that most of us are not prepared for the implications of a global pandemic, including when it comes to the potential fallout from not having incapacity planning and estate planning documents in place.
In part 1 of this series, I will discuss why estate planning is of vital importance during this global pandemic. In part 2, I will explore elder law and planning for long-term care, and in part 3, I will focus on retirement and financial planning.
While we remain optimistic that our widespread social distancing efforts will stem the spread of the coronavirus, we know that the situation can change rapidly, and now is the time for Americans to take action on this front. Many people have a bit of extra time on their hands right now, so this is a good opportunity for Americans to review or create their estate plans. In fact, according to Barrons, financial advisors and estate attorneys say they are “seeing a flurry of inquiries from people seeking to update or draft wills and take other estate-planning measures amid the coronavirus crisis.” As you take stock of your own plan, here are a few important things to keep in mind:
1. Get Your Estate Planning Documents in Place
According to a new Caring.com survey, only 42% of U.S. adults currently have estate planning documents such as a will or living trust. For those with children under the age of 18, the figure is even lower, with just 36% having an end-of-life plan in place.
The reality of COVID-19 has forced many individuals to address the “what if” scenarios that were previously unthinkable, or at least the situations that no one ever wants to talk about. Keeping this in mind, if you do not have estate planning documents in place, now is as good of a time as any to consider the opportunity before you. If nothing else can convince you, let this current global crisis do so. Having a will, a revocable living trust, a financial power of attorney, and an advance medical directive can certainly contribute to a healthy state of mind. These documents allow for the distribution of assets according to one’s wishes, the ability to make financial decisions on one’s behalf, and guidance for medical professionals on treatment and care.
2. Plan for Incapacity
Our proprietary 4 Needs Advance Medical Directive®
includes:
1) a health care power of attorney;
2) our proprietary Long-term Care Directive®;
3) a near-death directive; and
4) an after-death directive.
This document lets you express your wishes and authorize your agents to make medical and long-term care decisions for you in the event you are unable to do so.
A general power of attorney allows someone to handle your legal and financial affairs if you’re not able to.
If you don’t have these documents in place, now might be the best time to get these documents in place for peace of mind. If you do have them in place, now might be the best tim to review these documents to ensure that they reflect your current wishes and name the persons who you trust will be able to tend to those matters on your behalf. In addition, make sure to discuss your health care wishes with your agents so that, if necessary, they are prepared to make decisions that reflect your wishes.
If you require any medical attention in the near future, confirm that your medical provider can access a copy of your advance medical directive and is informed as to who you wish to have access to your confidential health information. At the Farr Law Firm, we use Docubank, a service that ensures your documents are available to medical professionals if and when they are needed.
3. Review Your Existing Documents
Make sure that you have copies (either paper or electronic) of your existing estate planning documents, and review them to confirm that they still reflect your wishes. Review beneficiary designations on assets such as bank accounts, individual retirement accounts, life insurance policies, and annuities. Where family situations have changed, whether it’s because of divorce or the birth of children or grandchildren, death, marriage etc., these designations often aren’t up to date. Make note of any major changes that may have occurred in your family since you last updated your estate plan and be sure to update them accordingly. Consider making updates at least every 3-5 years. Also consider whether the individuals that you previously appointed to serve as your agents are still appropriate.
4. Estate and Gift Tax Exemption
Some of us are worried that the crisis may impact the election and laws surrounding estate planning. High-net-worth individuals concerned about this are engaged in planning to make substantial gifts, as they fear that the estate and gift tax exemption will be lowered depending on who takes office. (For 2020, the lifetime gift and estate tax exemption is $11.58 million per individual, and $23.16 million per couple.)
Get Your Planning in Place During this Time of Uncertainty
Americans feel uncertain about most things right now. Most of us aren’t fearful we’re going to die, but we want everything in place should the worst happen. When it comes to uncertainties, don’t let your estate plan be one of them. Contact us today to ensure you have an appropriate plan in place. Completing an estate plan will provide some much-needed peace of mind.
Here at the Farr Law Firm, we have strategies to help everyone plan for themselves and their loved ones during this uncertain time. With advance planning, each person can retain the income and assets it has taken a lifetime to accumulate, and provide themselves the peace of mind that they are prepared should something happen to them or their loved one. If you or your loved ones have not done Incapacity Planning or Estate Planning, or if a loved one needs nursing home care or even if your loved one is already in a nursing home, please contact us as soon as possible to make an appointment for an initial consultation. For those who feel safer in their homes, we offer phone appointments or video conference appointments in lieu of in-person meetings (but we are still open for in-person meetings):
Estate Planning Fairfax: 703-691-1888
Estate Planning Fredericksburg: 540-479-1435
Estate Planning Rockville: 301-519-8041
Estate Planning DC: 202-587-2797
About Renee Eder
