COVID-19 and Your Estate Plan: Is it Time for an Update?
The coronavirus pandemic has affected almost every aspect of modern American life: how we work, how we shop, how we educate our kids, and how we socialize, to name just a few. COVID-19 has also made most of us more aware of our mortality. Even as we take common sense measures to stay safe and protect our loved ones, it has occurred to many people that putting off estate planning is a luxury they can’t afford.
So much seems out of our control during this pandemic. It may help you feel better to take control of those things that you can, especially when those things offer a measure of security. Having an updated estate plan provides you and your family with important protection and peace of mind. And unlike this unpredictable virus, your estate plan is entirely within your control.
Questions to Ask About Your Estate Plan
If you have an estate plan already, that’s great. If you are making one for the first time, congratulate yourself for getting this important piece of business in hand. But once you have decided to make or update your estate plan, what do you do next?
The first step is to evaluate your needs. Your estate planning attorney can provide valuable guidance at this step, encouraging you to consider needs that may not have occurred to you. Even before you meet with your attorney, there are questions you can ask yourself to help identify some of your estate planning needs.
Have I named a guardian for my minor children?
Most parents name a guardian for their children when making a will. A guardian will only be needed if neither parent is able to care for the children. Fortunately, this rarely happens, but as a parent, COVID-19 may have you worrying about what happens to your children if something should happen to both you and their other parent.
If you have already named a guardian, now is a good time to review whether they are still the best choice for your children’s needs, and if they are still willing to serve. If you haven’t named a guardian, think about who could give your children the support and stability they would need if the worst happened to you. Identify an alternate guardian to be named in your will in the event your first choice becomes unable to serve.
Who will take care of my important business and decisions if I get sick?
Fortunately, most people who become infected with COVID-19 don’t require hospitalization and recover without much medical intervention. Others, of course, may be incapacitated for days, weeks, or even months. If you fell into that category, do you know who would take care of your financial business, like paying bills and managing your income? Do you know who would make medical decisions on your behalf if you couldn’t make them for yourself?
If you have a durable financial power of attorney and a healthcare power of attorney, the answer to those questions is “yes.” Those documents allow you to designate a person you trust (your agent, or attorney-in-fact) to seamlessly step into your shoes and take care of your financial needs or make your health decisions without the need to be appointed by a court. Having a power of attorney not only lets you choose whom you want to handle your business, but gives you the opportunity to discuss your wishes with them in advance.
What are my wishes for end of life care?
For most people, the prospect of being on life support with no chance of recovery is not a pleasant one. Fortunately, most people don’t have to face that situation. But COVID-19 is making more people think about the suffering they could face in a hospital at the end of their lives.
If you don’t like the thought of that, you may want to make sure you have a DNR, or “do not resuscitate” order. Without such an order, medical staff may be obligated to take extreme measures to preserve life, even if a patient has no brain activity or prospect of recovery.
DNRs and “do not intubate” orders can be made part of a living will, a document that provides your agent under a healthcare power of attorney with guidance as to your wishes for end-of-life care. Hopefully, you will never need these documents, but if you do, they will give your loved ones peace of mind that they are carrying out your wishes.
Do I want my estate to go through probate?
Probate is the court-supervised process of gathering the assets of a deceased person, paying their debts, and distributing their property. As a general rule, assets owned in someone’s sole name go through probate. Those owned jointly (like a joint bank account) or in trust do not. Property distributed in a will goes through probate.
Going through probate is not necessarily a bad thing, especially if there is a dispute over the estate or the family wants the certainty of knowing creditors won’t come calling later, after the estate has been distributed. That said, many people prefer to avoid the probate process, especially now, when access to courts is more difficult.
Creating a living trust allows you to use and control your assets during your life, keeping them out of probate at your death. When you die, a successor trustee takes over for you and can distribute the assets to your loved ones without having to go through the probate process. If you are alive, but legally incapacitated, your successor trustee will manage trust assets for you.
If the idea of a trust appeals to you, you should consider talking to a New Mexico estate planning attorney about living trusts and other options for avoiding probate. Here at the Law Offices of Dana M. Kyle, we are doing everything we can to stay safe during the coronavirus pandemic and to keep our clients safe, as well. We invite you to contact our law office to schedule a consultation to update your estate plan in light of COVID-19.