The Importance of Estate Planning During the Coronavirus Pandemic
Who will make decisions about your finances, your health and possibly even your life if you get COVID-19?
By: Matthew J. Abraham, Esq. • April 27, 2020 • 4:32pm
The COVID-19 pandemic has affected all of us, literally everyone, and on a global scale. It has forced all of us to face our fears in some way, whether it’s the fear of becoming ill, losing a job, closing our business, or having to be isolated and alone. All of these anxieties and unknowns are creating a sudden and crucial need to get our affairs in order.
Not knowing what symptoms we may experience or how extreme they may be should we contract COVID-19, it is certainly important to be prepared if you do need to be hospitalized. It is scary to think about getting sick or not being able to make decisions for yourself, but an estate plan is meant to handle such situations and manage those fears. Having a plan with trusted people in place to help you in making health and financial decisions can provide peace of mind and directly eliminate the uncertainty of “what if”.
The fact is, everyone should have an estate plan, even if there is no looming health threat. And if you don’t have one, there’s no better time than now to put it together.
Basic Documents of an Estate Plan
Estate planning is more than just getting a will. A complete estate plan will also include several other important documents, such as a revocable trust (sometimes called a living trust), financial & property powers of attorney, health care powers of attorney, and more. All of these documents are important and serve a role in putting together a comprehensive estate plan.
Currently, in light of this pandemic and the particular situation it has created, the two most important documents to have in place right now are (i) financial and (ii) health care powers of attorney. We each need someone who can do our banking or make our medical decisions if we should have to be quarantined at home, admitted to the hospital, or become incapacitated in some way. These are extremely important documents necessary in putting together a comprehensive estate plan.
The following is a basic list of all the documents you should have and what they mean:
1. Durable Power of Attorney for Property & Financial Matters
A general durable power of attorney is simply a legal document that allows a person to appoint an agent to handle specified affairs on their behalf. The person who appoints an agent (and a back-up in case they are unavailable) through a power of attorney is known as the “principal.” The person appointed is known as the “agent.” Powers of attorney can be “durable” and effective now or “springing” that become effective at a later date or occurrence such as disability. The DPOA gives the agent the ability to pay bills, write checks, make deposits, sell or purchase assets or sign any tax returns among other convenient powers. Any competent adult can serve as your agent. It should be someone dependable whom you trust to be honest and use common sense. It is also wise to choose someone local to manage the practical aspects of helping you with what you may need. It is important to understand that without a DPOA, there is no person with the ability to act on your behalf. It then requires family members to seek an appointment of a guardian or conservator through the local probate court which is limited due to the coronavirus induced closure of the courts. Regardless, this court process can be time-consuming and expensive and may end up with someone you do not want in the legal capacity as your agent.
“If you are quarantined in your home or have to be admitted to the hospital or somehow otherwise become incapacitated, you need someone who can take care of your banking or make medical decisions for you if you cannot do it yourself. This has become a painful reality for many affected by this disease.”
2. Durable Power of Attorney for Health Care (Living Will/HIPAA Waiver)
Similar to the financial power of attorney, a health care power of attorney is a legal document that gives an agent or patient advocate the authority to make health care decisions on your behalf if you are unable for any reason to do so for yourself. These documents allow an you to express and communicate your wishes and give specific directions regarding your medical care should you become unable to do so in the future. They also allow you to specify what end-of-life treatment you do or do not want to receive should you become terminally ill or permanently unconscious and won’t survive without the administration of life sustaining measure. The health care power of attorney also should include a HIPAA waiver to allow your nominated agents and family members to have access to your medical information so they can speak freely with your health care providers in case of a medical emergency or your incapacity Medical powers of attorney are powerful documents that can provide peace of mind to the person who signs it, as well as to their family members should difficult decisions ever have to be made regarding that person’s medical care when they are unable to express or communicate their wishes.
3. Last Will and Testament
A last will and testament is a legal document that allows you to direct distribution of your property at the time of your death and allows you to appoint an executor or personal representative whose job it is to oversee the probate of your estate and the distribution of your assets. If you don’t have a will (or trust) in place, the distribution of your assets will be handled by the default estate plan provided by the state you live in and the court will decide on the best person (or not) to oversee the administration of your estate. A very important aspect of our will also allow you to appoint a guardian to take care of your minor children. Again, if you don’t have a will, a court will decide who is the best person to raise your children and manage your money on their behalf. These important decisions and choices are obviously better if made by you and require proper planning.
4. Living Trust
A revocable living trust is essentially a legal contract that you make with yourself (and your spouse, if married) to create an entity to hold and manage your assets during your lifetime and properly distribute them upon your death. It is revocable and can therefore be changed by you at any time. The trust allows you to appoint a successor trustee in case you become incapacitated or are unable to manage your estate. Having a living trust avoids the need for any court proceedings or to appoint a conservator. The trust allows you and any of your successor trustees to manage your affairs without the involvement of the court and avoids the unnecessary time and expense associated with probate. A trust also protects your privacy surrounding the details of your estate, since it avoids the need for probate, which is a public process. A living trust can also help provide for the care, support and education of your children by turning over trust assets to them at an age chosen by you.
It Doesn’t Have To Be Complicated, It Just Has To Get Done.
Although estate planning can seem a complex process, having a professional estate planning attorney can greatly simplify it for you- making sure you have everything you need for your specific situation and making sure it is properly prepared. Aside from preparing documents correctly and looking out for specific items that need to be considered, a good estate planner will help with proper titling of assets such as real estate, businesses, and vehicles, as well as designating beneficiaries for financial assets such as life insurance, retirement accounts and other bank accounts. Estate planning is not an area you can afford to make any mistakes.
Keep in mind is that documents such as wills and powers of attorney have to be witnessed and notarized in order to be binding. This can be challenging during a pandemic. Fortunately, many states have recently enacted executive orders or statutes which allow for virtual notarization and witnessing of these documents which means that alternative arrangements can be made for clients to avoid having to physically travel to their attorney’s office. With trained and skilled staff, certain attorneys can coordinate everything virtually without requiring you to come into a busy office.
Estate planning can be straightforward or complex but it is vital at every level and for many reasons especially with what is happing in our country today. It is wise for everyone to be prepared and have an estate plan in place that is tailored for your specific needs and those of your family. Don’t wait to engage an estate planning attorney to create your estate plan today.
As a Michigan estate-planning attorney, Abraham Law and Matthew Abraham engage in close and careful consultation with his clients so that he prepares documents that are custom fit for each client’s particular situation. Matthew prepares his clients’ estate planning documents so they will accurately and effectively speak to their wishes and goals.
Abraham | Law: Experienced and Exceptional Estate Planning Representation
You’ve invested a lifetime in building your business. Estate planning is essential to preserve your hard earned business, assets, and your legacy. Having an experienced Michigan Estate Planning Attorney to protect your interests is important. Matthew Abraham of Abraham | Law will assist you through the intricate process of thoroughly preparing a complete estate plan tailored to meet your specific needs and wishes. With the myriad of estate planning tools available to you, you need an estate planning law firm that will guide you in the best direction for your family.
For assistance with all of your estate planning needs, call Abraham | Law today at (810) 750-0440 to schedule your free virtual or telephone consultation.