Estate planning can be complex even when there is ample time to prepare for the worst, let alone during a fast-moving and deadly pandemic that has sparked panic in financial markets and across the global economy. However, there are a number of universal tips people can follow.
Everyone should have at least these three basics: a Will, a Durable Power of Attorney, and a medical directive of some sort. These documents will 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. Because most courthouses are closed right now (except for some emergency and criminal matters), some probate avoidance techniques (like a Revocable Living Trust) might also be a bigger goal than usual so that the Court does not have to be involved in the distribution of assets upon someone's death.
Besides the basics, everyone should review their beneficiary designations on assets such as bank accounts, IRAs, life insurance, and annuities. Where family situations have changed, say either because of divorce or the birth of children or grandchildren, these designations often aren’t up to date.
Some individuals should also consider a Health Care Power of Attorney for their minor child, in which they can give a friend or family member the authority to take their child to a doctor and receive and make health-care decisions on their behalf if the parents become unable to.
Lately, some of our clients who are in their 70s and 80s have been calling primarily to ask if their documents are in order. Ideally these questions are asked before a pandemic or other emergency creates special urgency, but the important thing is to ensure any problems get squared away before the worst occurs.
Our younger clients have been more concerned about the economic impact of the coronavirus than any impact on their mortality. Many plan to leave assets to family members and if their net worth, including the value of their business, has dissipated in the downturn, that changes what they’re able to leave behind.
Some clients are also worried that the COVID-19 crisis will impact the election and laws surrounding estate planning. They’re now engaged in planning to make substantial gifts and they fear that the estate and gift tax exemptions may change depending on who's in office. (For 2020, the lifetime gift and estate tax exemption is $11.58 million per individual, and $23.16 million per couple.)
If you have questions about creating or updating your estate plan, give us a call at 253.858.5434. We proudly advise and represent clients throughout Washington and Idaho. Although we aren't currently scheduling in-person meetings, we are entirely available to meet via video conference by Skype, Zoom, FaceTime, or Facebook Messenger, whatever is most convenient for our clients.