As COVID-19 (the Coronavirus) continues to spread around the world, the economy also bounces around and clients face social distancing, illness, and for some, death. In my experience, such chaotic situations – even if controlled — always force people into getting their affairs in order. For many people, that translates not only to their household supplies and financial affairs, but also, particularly now, their estate plans. With death randomly imminent for some of us, now is the time to address this, if you can.
When facing the threat of a disease that can cause death so indiscriminately, people need to take action. Those who plug their ears singing, “La La La!” because they do not want to have conversations about sensitive issues like dying and who gets what when they are gone, leave a sad legacy to those they love. When we are facing a global pandemic the time is ripe for conversations about these topics. Estate planning is a very productive project you can work on while you are stuck at home trying to avoid spreading or catching the disease! Most of us now have time to get this done.
NOTE! You do not have to worry about going into your lawyer’s office to do most of this work. If you have a computer, iPad/tablet, smartphone, or similar device you can have a private video meeting. You can also do it by telephone alone, if you prefer.
In Oklahoma, we can still have you in our offices, because the practice of law is considered to be an essential business. If you must visit the office or prefer it, that can happen. Still, you are safer to limit such outside contact, until time to sign your documents – with plastic gloves, masks, and social distancing.
Those of you who are out and about regularly really need to make time for estate planning, because you are most at risk for the negative things the virus can do to you. Consider taking these four steps:
Do your best to face the issues of death and dying positively. To avoid spreading the Coronavirus, we are all working together. We are even doing things we do not like. In the same way, you can choose to face the parts you do not like about your eventual demise. Look at estate planning as setting in place the legal necessities for your loved ones to handle your death – expected or unexpected. Look at this as an opportunity to get your affairs in order. You have the chance to prevent confusion, unnecessary expense and stress, and disputes between loved ones when you are gone. Take it. This is the most loving and kind thing you can do.
(2) USE FEAR AS MOTIVATION:
Let your fears work in your favor right now. Go ahead – think of the things you most fear will happen to your loved ones and your stuff, if you should die. Make a list of them. Then talk about your list with your estate planning attorney. Your lawyer will help you determine the tools and processes to address them.
(3) FOCUS ON BASICS:
At the very least, set your mind to do a core estate plan that includes your Will, Beneficiary Designations, Powers of Attorney (and health care proxies), and Health Care Directive (Living Will). These four areas are necessary as the bones of a good estate plan for all adults 18 and older. Please do not neglect the health powers of attorney and Health Care Directive. These may be critical if you are one of the unlucky ones who has a health crisis. Your estate plan is not just about dying. It assures that:
- Assets go where you want them to go,
- Your beneficiaries are named.
- Someone you choose can handle your affairs if you lose the ability to run your life, and
- If you lose your life, there is someone ready to wind up your affairs in the least stressful and least expensive way possible.
4) TAKE THE ECONOMIC OPPORTUNITY:
Regardless of whether you have an estate plan, this time of instability offers options for your plan that your estate planning attorney might advise, especially if your attorney has education, credentials, and experience in estate matters and taxes. Other estate plan components to consider right now are:
- Gifts: You might be advised to consider making gifts now, outright or by a trust, if you have an estate subject to death taxes. For example, the timing is unusually right for considering a grantor retained annuity trust (GRAT). These are among the most efficient tax avoidance vehicles when interest rates and market values are low.
- Rollovers: You might take advantage of rolling a traditional IRA into a Roth IRA and paying taxes now while the value is low. When the market recovers, all of the Roth is tax free — including the recovery of value.
(5) IF TEMPTED TO DO IT YOURSELF:
Some of you will be tempted to do estate planning on your own due to concerns about the cost of engaging a lawyer or because you cannot engage one immediately, and you are looking for anything that might help. Keep in mind that just because you make a handwritten Will does not mean that what you say in it is going to happen. Here are a few examples:
- If assets you give away in your Will are not owned by you alone or they have a beneficiary designation, the words in the Will (whether drafted by you or an attorney) will not overrule the joint titling or beneficiary designation. They will become void.
- It is common for clients to forget that they have filed a beneficiary designation long ago or jointly titled an asset that is different from what they now want to do. This can be changed only by retitling the asset or doing a new designation, not by words in a Will.
- You cannot disinherit someone by leaving him or her out of your Will. You can disinherit everyone except your spouse, but you must be specific in your Will.
- If you buy software to prepare a typed plan, you must execute it as though you were in an attorney’s office with witnesses and a notary. Of course, there are a lot more problems that can arise. Just know that doing it yourself, generally causes your loved ones more cost, anxiety, and certainly disputes.
If you must do a holographic (handwritten) Will, you should seriously consider getting your estate lawyer to help you do that by phone or video conference.
All of these issues and more can be addressed with your estate planning attorney. Do remember, you absolutely can stay safely at home by holding all meetings except the signing and witnessing of your plan by phone or video. Signing and witnessing are necessary to make your plan legal and are done these days while executing every precaution for health and safety.
originally published on our LinkedIn Pulse