The pandemic sweeping our country has us focusing on ways to protect ourselves and our families in ways that have become our new normal. Our children are learning from us at home and through on-line resources. We are staying at home, working remotely and changing our entertainment and restaurant habits. We are also probably checking in on our parents, elderly relatives and neighbors a little more often than we usually would. Not to be an alarmist, but the pervasiveness of this disease and the unknown and seemingly unpredictable trajectory of infections also has me worried about all of these issues for my family and my clients.
It's also got me thinking about estate planning and how we can make things easier for our families in the event the unthinkable happens. For some of us, the economic and health crisis surrounding Covid-19 pandemic may be a reason to review and update existing estate plans. For others, the Coronavirus has us thinking about estate planning as another way we can protect our loved ones.
Whether you are contemplating updates to your existing estate plans or realize it's time to put an estate plan in place, there are a few basic documents to consider. Advance Directives and Powers of Attorney are important documents which are effective during your lifetime. A Last Will and Testament becomes effective upon your death, and trusts can be an effective tool to transfer and manage your assets after your death.
The following provides a brief outline of estate planning documents you may want to consider.
Advance Directives, otherwise known as a Living Will and Power of Attorney for Healthcare, provide critical information for both your loved ones and your medical providers. If you already have Advance Directives, you should review whether the agents you have appointed are still appropriate or whether changes are needed. If you are thinking about creating new Advance Directives, you need to think about the following.
A Living Will formalizes your wishes concerning your medical care and treatment and comes into play in the event you are in terminal condition or permanently unconscious state.
You will identify the persons you would like to receive notice that you are suffering from a medical emergency and you can indicate whether you want a Do Not Resuscitate order ("DNR") to be followed.
A Healthcare Power of Attorney is used to designate an agent to who will be authorized to discuss your care and treatment with your medical care providers. Your agent also will make medical decisions on your behalf, in accordance with your wishes, in the event you are unable to. These difficult decisions will be made during what will undoubtedly be an emotional time so it's important to carefully select this person.
Financial Powers of Attorney
A financial power of attorney ("POA") designates an agent who is authorized to make financial decisions and to engage in financial transactions on your behalf, during your lifetime. A POA creates a fiduciary relationship between you and your agent and authorizes your agent to manage your investments, real property and personal property. Most general, durable powers of attorney provide that your agent's authority continues in the event you become disabled or are declared incompetent.
Whether you are updating your POA to change the agent or selecting an agent for the first time, you should choose someone who you can trust and it is a good idea to choose someone with experience handling financial matters.
Last Will and Testament
Your last will and testament ("LWT") is a legal document and final expression of how you want your assets to be handled after your death. Your LWT should identify an executor and successor executor who is responsible for the administration of your estate. If you have minor children, you should nominate a guardian and a successor them in your LWT.
There are many types of trusts used to address various issues and planning goals. Your goals should be discussed with your attorney to determine whether and what type of trust is necessary.
In reviewing your trust, a few of the things you should consider include whether your trustee or successor trustee will still be able to serve; whether your trustee or successor trustee is still the best person to take on this responsibility, and whether you want to keep the same beneficiaries you originally identified. You should also considertransferring your assets to the trust now. This will help to avoid probate upon your death.
For accounts like retirement accounts, annuities or life insurance where you have already designated a beneficiary, you should check to make sure the beneficiary designations continue to reflect your wishes. The financial institutions will only distribute the funds in the account to your designated beneficiary. If no beneficiary is designated, the funds will be paid to your estate and will be subject to oversight by the probate court.
The bottom line is that the more you can plan for now, the better off your loved ones will be in the future.
If you have questions regarding a review of your existing estate planning documents or want to discuss the preparation of any of these legal documents, please contact Maggie Metzinger
or any member of the Frantz Ward Estate Planning
Frantz Ward's Coronavirus Response Team assists clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly
or Christopher Koehler
and they will engage the appropriate members of the response team. In addition, please visit the Frantz Ward Coronavirus Daily Update/Resource Center
for up-to-date information and links.