What Parts of Estate Plan Should Be Reviewed in the Pandemic?

Forbes’ April article entitled “6 Parts Of Your Estate Plan You Should Review Now” discusses several items in your plan that should be examined, in light of the coronavirus pandemic.

In this pandemic, who will make important financial and medical decisions for you, if you’re unable to make them for yourself?

Make certain that you’ve designated a person who is trustworthy and reliable. Don’t forget to name a back-up for your power of attorney and health care proxy.

Look at your will. Make sure the person you’ve named as the executor of your estate is current. This is the individual who’ll attend to your affairs after you die and take care of probating your will, if necessary. She will also file income and tax returns on behalf of the estate. If you have minor children, name a guardian for them in the will.

Review your trust. Your revocable living trust usually benefits you while you’re alive. It can also be used to benefit others, such as a spouse and children. Name those who will receive the assets at your death. If your beneficiaries are minors or not mature enough to handle a sizeable sum, you might hold assets for them in trust, until they’re old enough to handle the money themselves. Review your decision regarding your trustee and see that this is the right person to administer the trust, based on your wishes.

Be sure to fund the trust. This will avoid probate of the assets on your death and lets the successor trustee control the assets for your benefit, if you’re incapacitated. If you fail to do so, it will create a host of problems after you’re gone. Your heirs will need court authority to access your assets, which can be an expensive and time-consuming endeavor.

Update your beneficiary designations. This includes the beneficiary designations on your life insurance policies, retirement accounts and any brokerage accounts that are payable on death to a beneficiary.

Ask your estate planning attorney about taking advantage of estate tax opportunities. It is important to have everything in order in the pandemic.

Reference: Forbes (April 15, 2020) “6 Parts Of Your Estate Plan You Should Review Now”

What Is a Power of Attorney?

A power of attorney is a legal document that permits an agent or attorney-in-fact to make financial and legal decisions on your behalf, if you are unable to do so.

WTOP’s recent article “How to Set Up a Power of Attorney” says that the rules for designating power of attorney vary from state to state. Because of this, you should speak to an experienced estate planning attorney about your state’s laws.

Power of attorney is revocable. Therefore, if you’re mentally competent and believe you can no longer count on the person you designated as your agent, you can update your documents and select another person.

The individual you choose as your attorney-in-fact will depend to a large extent on the type of power you’re granting — whether it’s general or limited — and your relationship. For general power of attorney, people often go with their spouses or sometimes their children. However, you can choose anyone, as long as it’s someone you trust.

In many cases, designating general power of attorney is a component of a larger estate plan, so when you talk to your estate planning lawyer about your estate plan, you can add this to the conversation.

You may want to have your attorney draft a limited or special power of attorney. This lets your agent complete restricted transactions, like selling a piece of property. It’s limited in scope. In contrast, a general power of attorney lets your agent do about anything you could do. A general power of attorney is usually part of an estate plan, in the event you’re unable to handle your own financial matters as you age or become incapacitated.

A springing power of attorney goes into effect in a predetermined situation, and it will specify the circumstances under which the power takes effect. An immediately effective or non-springing power of attorney is in place once the paperwork is signed.

Powers of attorney typically end when the principal is unable to make decisions on his or her own. However, for some, becoming incapacitated is just the type of circumstances when they want someone they trust to have power of attorney.

A durable power of attorney continues after the individual is incapacitated. Therefore, if you’re unable to make financial or medical decisions on your own after an accident or illness, the POA will remain in effect.

You are generally also able to name a medical power of attorney. That’s a person who knows your wishes and can make health care decisions for you as a proxy. It’s also known as a health care proxy. If you can’t make decisions on your own, the health care proxy kicks in. Your health care proxy should know your wishes, as far as how you’d like doctors to treat you, if you can’t make decisions on your own. This may also accompany a living will, which expresses your wishes on continuing life support, if you’re terminally ill or being kept alive by machines.

Reference: WTOP (May 21, 2020) “How to Set Up a Power of Attorney”

Should I Have an Advance Directive in the Pandemic?

Advance directive is a term that includes living wills and health care proxies or powers of attorney. These are legal documents we all should have. A living will allows you to tell your family and doctors the types of medical care you want at the end of your life. Health care proxies or powers of attorney let you name someone to make medical decisions for you, if you can’t communicate.

WTOP’s recent article entitled “Advance medical directives vital during COVID-19 pandemic” says that you need both because not all medical situations will trigger a living will. In fact, a living will is only really applicable, if you have an end stage process, a persistent vegetative state, or a terminal illness. People often run into a situation where they have a health event, but it’s not something that’s going to end in their death.

An estate planning attorney can draw up advance directives, when they’re creating your estate plan.

When selecting the individual to grant the power to make decisions for you, consider who would be most capable of advocating for what you want, rather than what they, other family members or a medical provider might want. You should also name a backup in the event your first choice can’t serve and make sure these advocates understand your wishes. Give copies of the documents to them and go through what you want.

Your attorney will follow your state’s rules about how to make these documents valid, such as having witnesses sign or getting the paperwork notarized.

Next, keep the originals in a safe place at home, along with your will, and tell your family where to locate them. Your physician and attorney should also have copies.

Tell your doctor to add the forms in your electronic health record. That way, other medical providers can access it in an emergency. You should also carry a card in your wallet that has your health care agent’s name and contact information, as well as where you keep the originals and copies.

If your choices could cause stress for your family, consider including a note explaining your thinking. Even if they disagree with your decisions, it is more comforting to hear it directly from you, rather than the person you named to act on your behalf.

Reference: WTOP (June 1, 2020) “Advance medical directives vital during COVID-19 pandemic”

What Should I Keep in My Safety Deposit Box?

A safe deposit box isn’t a smart choice for everything. Kiplinger’s recent article entitled “9 Things You’ll Regret Keeping in a Safe Deposit Box” advises that there are some items you might not want to lock up in your bank, which isn’t open nights, holidays, or weekends. zin this pandemic, hours of operation for many businesses are reduced. In fact, some financial institutions, like Bank of America, have temporarily closed some locations. There are other banks that require an appointment for in-branch services, like accessing your safe deposit box. This would create a headache for you in your attempt to retrieve important documents or items when you need them.

Here are some important items you should store elsewhere, because you’ll need to access more often or on short notice. Maybe they should be in a fireproof safe that’s secured to the floor in your home.

Cash. Keeping a wad of cash in a safe deposit box, isn’t a good idea because if you need it in a pinch and the bank is closed, you’re out of luck. In addition, that cash will lose its buying power over time because of inflation and some banks don’t allow cash in a safe deposit box. Finally, cash in a safe deposit box isn’t protected by the FDIC. To have FDIC insurance (covering up to $250,000 per depositor per insured bank), your cash needs to be deposited in a qualifying deposit account, such as a checking account, savings account, or CD.

Your Passport. OK, most of us don’t need your passport in hand at a moment’s notice. However, you may need to take an emergency trip, which will happen during non-banking hours. Without your passport handy, there’s not much you can do about those calls in the middle of the night requiring you to dash.

The Original Copy of Your Will. You may want to keep a copy of your own will, your spouse’s and any in which you’re named the executor in a safe deposit box. However, don’t store the original copy of your will there, particularly if you’re the only owner of the safe deposit box. That’s because after your death, the bank will seal the safe deposit box, until your executor can prove she has the legal right to access it. This could mean a long and potentially expensive delay before your will is executed and your assets can be disbursed to the intended heirs. Keep the original copy of your will with your estate planning attorney or in a location where your executor can get to it without any legal hassles.

Letters of Instruction. Many people write a letter of instruction to accompany their will. This letter can describe whether you want to be buried or cremated and the type of service you want. This letter can include details on specific bequests of sentimental items, but it’s no help if its’ locked in your safe deposit box.

Durable Power of Attorney (POA). This document gives a trusted friend, family member, or professional adviser the authority to financial make decisions on your behalf. However, if your POA is in a safe deposit box that no one can access, the person you’re depending on to protect you at your time of need could find her hands tied. Keep the original POA with the original copy of your will and give copies to those who may need it one day.

Advance Directives. A living will and a health care proxy are sometimes collectively known as advance directives, but each has a unique purpose. A living will states your wishes for end-of-life care, and a health care proxy (also known as a health care power of attorney) names a person to make medical decisions for you, if you can’t make them yourself. Neither is any good locked away in an inaccessible safe deposit box.

Uninsured Jewelry and Collectibles. Heirloom jewelry and your valuable stamp collection and rare coins are good candidates for a safe deposit box, but they must be properly insured. The FDIC doesn’t insure safe deposit box contents, and neither does the bank, unless it’s stated in your agreement.

Any Illegal or Dangerous Items. Your bank should provide you with a list of items that are not permissible to keep in a safe deposit box. This will include things like firearms, illegal drugs and hazardous materials.

Reference: Kiplinger (June 1, 2020) “9 Things You’ll Regret Keeping in a Safe Deposit Box”

What Should My Estate Plan Include?

The Huffington Post’s recent article entitled “A Guide To Estate Planning During The Coronavirus Pandemic” says that almost everyone should have an estate plan—even if there’s no major health threat. If you don’t have one, right now is a great time to put it together.

In the COVID-19 pandemic, the two most critical documents to have are medical and financial powers of attorney. You should name someone to do your banking or make your medical decisions, if you are quarantined in your home, admitted to the hospital, or become incapacitated. When you have those in place, you need to create a comprehensive estate plan. Let’s look at the documents you should have and what they mean.

  1. A Financial Power of Attorney. This is a legal document that gives your agent authority to take care of your financial affairs and protect your assets by acting on your behalf. For example, your agent can pay bills, write checks, make deposits, sell or purchase assets, or file your tax returns. Without an FPOA, there’s no one who can act on your behalf. Family members will have to petition the probate court to appoint a guardian to have these powers, and this can be a time-consuming and expensive process.
  2. A Health Care Power of Attorney. Like a financial power of attorney, this legal document gives an agent the power to make health care decisions on your behalf, if you become incompetent or incapacitated. If you’re over the age of 18 and don’t have an HCPOA, your family members will have to ask the probate court to again appoint a guardian with these powers.
  3. A Living Will (Advance Health Care Directive). This allows you to legally determine the type of end-of-life treatment you want to receive, in the event you become terminally ill or permanently unconscious and cannot survive without life support. Without a living will, the decision to remove life support is thrust upon your health care agent or family members, and it can be an extremely stressful decision. If you draft a living will, you detail your wishes and take that decision out of their hands.
  4. A HIPAA Waiver. An advance health care directive will likely contain language that allows your agent to access your medical records, but frequently hospitals will refuse access to medical information without a separate HIPAA waiver. This lets your agents and family members access your medical data so they can speak freely with your physicians, if there is a medical emergency or you become incapacitated.
  5. A Will. A last will and testament is a legal document through which you direct how you want your assets disbursed when you pass away. It also allows you to name an executor to oversee the distribution of your assets. Without a will, the distribution of your assets will be dictated by state law, and the court will name someone to oversee the administration of your estate. A will also lets you name a guardian to take care of your minor children.
  6. A Living Trust. A revocable living trust is a legal tool whereby you create an entity to hold title to your assets. You can change your trust at any time, and you can set it up to outlive you. In the event you become incapacitated or are unable to manage your estate, your trust will bypass a court-appointed conservatorship. A trust also gives you privacy concerning the details of your estate, because it avoids probate, which is a public process. A living trust can also help provide for the care, support, and education of your children, by releasing funds or assets to them at an age you set. A living trust can also leave your assets to your children in a way that will lessen the ability of their creditors or ex-spouses to take your children’s inheritance from them.

Reference: The Huffington Post (April 7, 2020) “A Guide To Estate Planning During The Coronavirus Pandemic”

What Is an Advance Directive, and Why You Need This Document?

The coronavirus pandemic has had an impact on the entire world. No wonder—it’s a frightening disease that experts are just beginning to understand. Many of us are asking ourselves: Am I ready for a worst-case scenario? Anyone who does not have the health care portion of their estate plan in order, needs to address it now, says the timely article “COVID-19 crisis highlights the importance of completing advance directives” from Cincinnati.com.

The topic of an advance directive used to be introduced with a question about what would happen if a person were in a car accident, rushed to the hospital and unable to convey their wishes for care.  The question has now become, what if a sudden onset of COVID-19 occurred, and you were unable to speak on your own behalf? Would your loved ones know what you would want, or would they have to guess?

All adults—that is, anyone over the age of 18—should have an advance directive. The process of creating this and other health care-related estate planning documents will provide the answers to your loved ones, while helping you work through your wishes. Here’s how to start:

What matters to you? Give this considerable thought. What is important to you, who best knows and understands you and who would you trust to make critical decisions on your behalf, in the event of a medical emergency? What medical treatment would you want—or not want—and who can you count on to carry out your wishes?

Get documents in order, so your wishes are carried out. Your estate planning attorney can help you draft and execute the documents you need, so you can be confident that they will be treated as legitimate by health care providers. The estate planning lawyer will know how to execute the documents, so they are in compliance with your state’s laws. Here’s what you’ll want:

  • A living will, which records your wishes for medical treatment, if you cannot speak on your own behalf.
  • Medical power of attorney, to designate a person to make health care decisions, when you are not able to do so. The person is referred to as an agent, surrogate or proxy.
  • A HIPAA release form, so the person you designate may speak with your medical care providers.

Note that none of these documents concerns distribution of your personal property and assets. For that, you’ll want a will or revocable living trust, which your estate planning attorney can prepare for you.

Talk to loved ones now. Consider this conversation a gift to them. This alleviates them from a lifetime of wondering if they did the right thing for you. Have a forthright conversation with them, let them know about the documents you have had prepared and what your wishes are.

Reference: Cincinnati.com (April 27, 2020) “COVID-19 crisis highlights the importance of completing advance directives”

Why Do I Need an Advanced Healthcare Directive?

During the prime of our lives, we typically don’t give much attention to thoughts about becoming seriously ill or about the end of life. Conversations about sickness and your own mortality aren’t easy topics to raise. However, it’s important for us to approach these heavy topics with our families, so we rest easy knowing their needs will be met if or when our health fails.

Rome News-Tribune’s recent article entitled “Things to know before drafting a living will” explains that an advanced healthcare directive, also called a living will, is a legal document in which you can detail the specific types of medical care and comfort treatment that you want, if you are unable to make decisions for yourself because of illness or incapacity. A living will can state whether life support should be used and whether pain medication should be administered.

A living will is separate and distinct from a traditional will. A will is a legal document that states how you would like your assets distributed after you pass away.

A living will is not always required, if you don’t have any strong feelings about the decisions made on your behalf while you are incapacitated. However, if you do want to provide instruction about your treatment and care, a living will is the best way to be certain that your choices will be carried out. Here are some other questions you may want to ask yourself about a living will.

  • Do I want to eliminate the stress of difficult decisions from my family? A living will can relieve your grieving family of the responsibility of making very tough decisions of invoking lifesaving (“heroic”) measures.
  • Do I have strong feelings about life-saving methods? A living will allows you to state your exact preferences on feeding tubes, life support when brain function is minimal and many other circumstances.
  • Do I have a trusted person who is able to carry out wishes? A health care proxy is an individual that you name and give the power to make decisions for you, if you are unable to express your preferences for medical treatment. Along with a living will, the health care proxy or “durable medical power of attorney” can fulfill your wishes accordingly.

Ask your estate planning attorney about this important component of medical and estate planning.

Reference: Rome News-Tribune (March 7, 2020) “Things to know before drafting a living will”

Have You Prepared End-Of-Life Decisions?

Florida Today’s recent article entitled “As COVID-19 spreads, are your end-of-life directives in order?” explains that the Conversation Project surveyed Americans about the need for end-of-life directives. About 92% of respondents thought it important to discuss their wishes for end-of-life care and 95% of them are willing to talk about these wishes. However, just 32% have actually gone ahead and had the discussion.

With the threat of COVID-19, there’s a sudden urgency to engaging in discussions of end-of-life treatment. Although the young and healthy are more apt to fight through the illness, the elderly and the infirm are not likely to survive, despite using a ventilator. It’s hard to put someone on a ventilator and even harder to have it removed, when there’s no chance of recovery.

For example, if you didn’t have a healthcare directive and you ended up on a ventilator—but that wasn’t what you wanted—you could live a long time in a nursing home with a very poor quality of life. Without an advance directive and if you’re not able to speak for yourself and haven’t named an agent, the state will appoint a guardian to make these critical decisions. This will be a person who knows nothing about you but will have the authority to make decisions about your health and well-being. If your family is found, and they disagree with the guardian, it can be a big problem.

Name someone who can speak for you, when you can no longer do so. Tell them your wishes for end-of-life care. Your agent will need to make tough, quick decisions on your behalf. The next step is to complete a health care proxy or power of attorney. This is a legal document in which you appoint the person to be your agent, when health care decisions need to be made and you can’t speak for yourself.

You should have your attorney prepare an advance directive or living will. This is another legal document that states your wishes regarding end-of-life medical care and delineates treatments you do or not want.

Give your agent a copy of your living will. You should also give a copy to your primary care physician and to anyone else you think should have it. Keep a copy available for yourself. Let your family know where the document can be located.

Your advance directives should provide instructions on DNR (“do not resuscitate”) and the use of a ventilator or tube feeding, hospice and palliative care and organ donation. It’s not a pleasant topic, but the time to discuss it is before you’re headed for the hospital.

Ask an experienced estate planning attorney about a complete plan.

Reference: Florida Today (April 14, 2020) “As COVID-19 spreads, are your end-of-life directives in order?”

Estate Plan Updates in the Age of Coronavirus

With the ever-increasing number of deaths in Europe and the U.S., 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 or having a probate court determine asset distribution.

However, there’s more. 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.

It’s also a good idea to have an attorney create a medical power of attorney for a minor child, in case another family member needs to take a child to the doctor, discuss their care and make decisions.

While young adults may be more worried about the financial impact of the pandemic, seniors and the elderly are concerned about having documents in order. Wealthy people are concerned about the impact that the pandemic may have on estate planning law, and some are engaged in planning to make substantial gifts, in case the current estate and give tax exemptions are lowered.

Other issues to be discussed with an estate planning attorney:

  • Irrevocable living trusts, which provide an opportunity to direct how assets in a trust will be held, invested and distributed before and after death.
  • 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”

Do I Really Need a Health Care Proxy?

The Pauls Valley Democrat’s recent article entitled “Advance directives and living wills” explains that an Advance Directive has three parts:

  • A living will
  • Naming of your health care agent; and
  • Your directions for anatomical gifts.

The individual that you name as your Health Care Proxy will make decisions for your treatment and care, if you’re unable to do so. These decisions may extend to all medical issues and aren’t limited to end-stage, life determining decisions that are mentioned in your living will. This is a form of power of attorney that authorizes your agent to act in your behalf to address issues like these:

  1. Accessing your medical information
  2. Discussing your treatment options with your healthcare providers
  3. Getting second opinions on your diagnosis
  4. Selecting and authorizing various medical tests
  5. Your placement in a hospital or care facility
  6. Transferring your care to a new physician; and
  7. Communicating your wishes on life support in terminal or unconscious situations.

For end of life decisions, your health care proxy is bound by your written wishes as expressed in your living will. Life support can be terminated, only if you so authorize in writing. Your healthcare proxy can’t make that decision for you, because that is “personal” to you. You may select one or more persons to act as your proxy, although if two are selected, you should predefine what to do in the event of a conflict.

A best practice is to choose a person who’s younger than you who is geographically close, a person with time to assist you and with whom you’re willing to share in advance your wishes, likes and dislikes as to medical care. This person should be trusted to act and honor your wishes.

Because many decisions relate to your very personal concerns about religion, death and dying, these feelings should be shared with your health care proxy before any serious situation.

The Advance Directive is a very important document that pertains to your wishes, as they relate to medical care, end-of-life and death.

Parts I and II can discuss your wishes for care treatment, as well as your choice of a person to represent your wishes. These are two very important issues. Take the time to consider the advance written expression of your own wishes.

Reference: Pauls Valley Democrat (Feb. 12, 2020) “Advance directives and living wills”