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Four Critical Steps to Estate Planning During Uncertain Times

May 4, 2020

Overview

COVID-19 has raised questions for many regarding whether their estate plans are current. If you already have an estate plan, here are some immediate steps you can take to make sure everything is in order. If you don’t have an estate plan, reach out to us for help creating one.

1. Review your documents.

Sit down with your estate plan to make sure that your current documents reflect your wishes. Make sure to consider the following questions:

  • Are the people you have designated as your fiduciaries still the appropriate choices? Your fiduciaries are the personal representatives in your will, the successor trustees in your trust, the agents in your general power of attorney, and the health care representatives in your health care directive.
  • Will your estate be distributed to your intended beneficiaries? Consider changes in your family such as marriages, divorces, births, or deaths. If your family has changed, you may need to make sure that all of the individuals you would like to provide for are included in your estate plan.
  • How will each beneficiary receive their distribution? You can direct that a beneficiary receive his or her share outright, in trust, or held by a custodian in an account for minors until the beneficiary reaches a certain age. Review your will or revocable living trust to determine that any restrictions you may have placed on a beneficiary’s share are still appropriate.
  • Does your health care directive still comply with your wishes? Review your health care directive to make sure that your stated instructions regarding your health care preferences still reflect your wishes. Do your representatives have a copy of your advance directive and signed a HIPAA waiver?
  • Was your durable power of attorney executed in the last five to eight years? Some financial institutions say that durable powers of attorney go stale after several years and will not recognize the durable power of attorney. We recommend updating these documents periodically.  
  • Do you and your fiduciaries know where to locate your documents? Probate courts generally require the original will to be submitted to the court. Locating your original will now, and making a note in your estate planning portfolio about where it is located, can be helpful when someone, such as a fiduciary, needs to access the original document. Additionally, letting your fiduciaries know where to locate your advance directives and durable powers of attorney can be very helpful when they need to access your documents.
  • Have your legal documents been reviewed in the last three to five years? Changes in tax regulations and other laws over time may affect your estate plan. It is always a good idea to have your estate planning attorney review your plan every few years to make sure that it is up to date with current laws.

If you identify any changes you wish to make to your documents, please contact your estate planning attorney as soon as possible. Making these changes sooner rather than later will help put your mind at ease.

2. Consider changes in your assets.

If your estate has grown since you prepared your documents, now may be a good time to consider whether you would like to update your plan to incorporate estate tax planning or include a revocable living trust to avoid probate (or multiple probates if you own assets in another state). Alternatively, if you already have a revocable living trust, now is a good time to make sure that any assets you acquired after you prepared your trust have been appropriately titled to your trust to ensure that your trust will work as intended to avoid probate.

3. Review your beneficiary designations on retirement accounts and life insurance policies.

Do you have beneficiaries designated on your retirement accounts and life insurance policies? If you do, are the beneficiary designations up to date? If you have not designated your beneficiaries, these assets will need to go through probate to be distributed to your beneficiaries. Additionally, failure to designate beneficiaries on your retirement accounts may lead to adverse tax consequences.

4. Relax, knowing that you have done everything you can to plan for your loved ones. 

We hope that by taking these steps, you are able to set your mind at ease that your wishes will be fulfilled and your loved ones will be taken care of, even in the midst of such uncertainty.

If you have any questions about any of the items raised in this article or need to make changes to your estate planning documents, please feel free to reach out to your estate planning counsel at Schwabe to discuss further. During these trying times, we are available to assist and committed to helping you rest easy knowing that your estate is in order.

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