COVID-19 and Estate Planning: 8 Things You Need to KnowCOVID-19
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There’s nothing like a pandemic to get you thinking about your own mortality.
While the current crisis rampages through multiple nations and the death and illness count increase exponentially, many people are in a panic.
Many are going through worst-case scenarios in their head and inundating estate planning lawyers with questions.
If you don’t have your affairs in order, now is as good a time as any to address this issue.
Here are eight things to know about estate planning amid the current crisis.
1. There Are Default Laws in Place
Estimates are that 70% of Americans don’t have a will or trust in place.
Contrary to what many people believe, having a will does not allow your estate to avoid probate, that’s where a living trust would come in, but a will does make it clear how you want your assets distributed after you die and all your debts and probate costs are paid off.
If you don’t have a will, intestacy laws will apply.
These are the default laws in place to determine who gets your leftover property and in what amount.
The order of distribution is based on your state’s laws, but your property generally goes to your surviving spouse and children.
If you are married without children or are fine with the default order provided by your state, the people you want to inherit your property if you pass away will get your property.
Things get more complicated if you have a less standard approach, such as if you want to disinherit a child or you have children from a previous relationship that you want to provide for.
If you don’t get busy and make a will, people may stand to inherit what you did not intend.
Likewise, if you don’t have an advance directive or living will, each state has an order of priority of who can make medical decisions on your behalf. If you would want your spouse to make these decisions, you’re okay.
However, if you’re single and estranged from your parents, or they have passed away or are not mentally capable, you may want to designate a person of your choice.
2. If You Don’t Make Decisions, Someone Else Will
If you have important ideas or values that you want carried out, it is important that you state this information in writing in a clear and unambiguous manner.
If you want certain types of healthcare, describe this information in detail in a living will.
If you have specific instructions on how your property should be managed, convey this information in a trust or power of attorney.
If you don’t make important decisions now, you will have to rely on someone else making the decisions for you later.
3. Now Is Not the Time to Panic
The current crisis is scary. Unquestionably.
However, is it important in times of crisis not to panic.
Don’t go off and sign your house over to your child.
Don’t sign a blanket power of attorney to allow a near stranger to handle your financial affairs.
Making these snap decisions could have long-term consequences for you that outlast the current pandemic.
You might give someone powers they don’t need or may jeopardize your ability to receive long-term care by making transfers for less than fair market value.
Think calmly about your wishes for your health, finances, and legacy and put an estate plan in place that honors these objectives.
4. You Need to Pick a Levelheaded Person to Honor Your Wishes
In addition to you not panicking, it is important that for any fiduciary role (such as an agent in a power of attorney or a trustee) that you select a levelheaded person.
You don’t want someone to make decisions for you or handle your affairs who is going to give in to panic.
Instead, you need a sensible person who can properly evaluate the situation and make the decision that most closely mirrors the one you would make under the same circumstances if you could communicate it.
5. Scammers Are Everywhere
Unfortunately, scammers love a crisis.
They prey on people’s fears.
China has reported thousands of cases of fraud pertaining to the current crisis.
The World Health Organization (WHO) issued a consumer warning to people around the globe about scammers impersonating the organization in order to steal money or sensitive information.
Interpol also reported an upswing in consumer fraud cases.
For this reason, it is important to carefully vet anyone that offers estate planning services or suddenly emerges in your life during this scary time.
Be wary of any solicitations you receive.
Check out any lawyer online and read reviews before giving them your business.
An important side note: strangers aren’t the only ones you have to worry about.
Most instances of financial fraud are perpetrated by people close to the person who makes the document.
We’ve all heard of cases of adult children having their parents sign a power of attorney or deed to their house while they are bedridden.
Sometimes far-off relatives descend upon a recently deceased person’s home and start removing belongings from it.
Be sure that you put proper safeguards in place to prevent people from taking advantage of you or your assets.
6. Estate Planning Lawyers Are Busy
Due to the rampant demand for their services right now, many estate planning lawyers are busy.
They are quickly churning out wills, trusts, powers of attorney, and other documents.
If you can’t get an appointment with a local attorney, there are several self-help tools you can use to put some basic estate planning documents in place, and I’ll discuss those more in a bit.
7. Some Plan Is Better Than No Plan
If you currently have no will, living will, healthcare power of attorney, or durable power of attorney in place, you may want to execute basic documents that cover the important things, like nominating a guardian for your minor children or stating your healthcare wishes.
You can always go back later and revise the documents, but having a simple plan in place now is better than having no plan.
8. You Can Set Up Your Estate Plan Without Leaving Your Home
If you’re currently staying home — like you should be — you may be wondering how you can set up an estate plan.
Well, if your situation is complicated — such as you have children from multiple marriages or you want to disinherit a child or something like that — you should probably call a local estate planning attorney, and it’s very possible that a lot of the legwork can be done remotely.
However, if your situation is more straightforward, you may be able to put together a basic estate plan online using a free will service like FreeWill.com.
Valerie graduated magna cum laude from the University of Arkansas School of Law where she also participated in Moot Court and the Arkansas Law Review. She practices law in Arkansas, focusing primarily on estate planning and elder law. She has prepared countless estate planning documents and has participated in a number of guardianship cases since she was admitted to the bar. She is a regular contributor to Nolo.