In a “normal” year it would be good advice to suggest that you review your estate plan, which could be your will, your trust if you have one, your healthcare documents, among other documents, at the end of the year. With 2020 and what is not a “normal” year, this advice takes on more meaning. Not surprisingly, much of the advice given in my blog post is due to the COVID-19. Generally, COVID-19 or not, you should review your estate plan each year.
Reason #1: Things Change
Our assets and family dynamics change over time. This is inevitable and applies to everyone. Review how your assets might have changed and see if the changes are covered in your documents. Did you move, and deed your new house to your trust? If family dynamics have changed, did you check to see if your will needs changed also? The biggest change would be divorce, and while some documents treat your ex as having predeceased you, some will still treat him or her as a beneficiary if the former spouse is not removed from the document. Other dynamics that might affect your choices are the death of someone you’ve named as a beneficiary or as a fiduciary (such as an executor of your will); the birth of a child or grandchild; the divorce of others such as the guardians you have named for your children.
The pandemic has created several changes for many of my clients, particularly the composition of households. Now, households are accommodating the needs of elderly family members moving in rather than moving into assisted living, college kids attending school from home, and other changes. These changes can affect who you choose to list as a power of attorney now that some family members might be living closer or further away, how you structure what happens to your house if you die since your household might include parents or others who might wish to remain in the home.
Another change is the law, specifically the SECURE Act. Your 401k or IRA will be affected by the SECURE Act, it is just a matter of “how.” The Act significantly changed the timing of distributions for inherited IRAs and changed rules regarding your beneficiaries. Check to see who is listed as beneficiary and whether that should be changed, whether a conduit trust is still beneficial, and other considerations.
Reason #2: New Considerations for Healthcare Documents
The pandemic has created new considerations that might affect your thoughts about your healthcare documents, specifically, your living will (whether you want artificial life support or not) and your healthcare power of attorney. These are critical documents that are necessary in managing your medical affairs should you become sick or incapacitated.
First, consider who you have listed in these documents to make decisions for you. Generally, people listed should be able to be “bedside.” You might have listed your brother across the country as your healthcare power of attorney, but will he be able to travel to get to you? Would a trusted friend or other family member who lives close to you be a more appropriate choice during a pandemic when there are greater restrictions on, and requirements prior to, travel?
Second, clients have expressed concern regarding their living will and whether the fact that they state “no artificial life support” means they will not be put on a ventilator if they need one, if diagnosed with COVID-19. The Ohio living will document states that, if death is only being prolonged by someone in a terminal condition or permanently unconscious state, then two physicians can determine to end artificial life support, or “pull the plug.” With COVID-19, a ventilator is used as a course of treatment, not to prolong death, and will be used to treat you. The living will document does not prohibit artificial means for breathing or keeping someone alive; rather, the document reflects your wishes to permit doctors to cease using artificial life support if no reasonable course of treatment will help and death is simply being prolonged.
It is a gift to your family to plan what you wish to happen if you are unable to take care of your medical or financial affairs, and to plan what you want to happen to your assets when you die. I hear so often about how difficult these decisions are for family to make during a period when they are grieving your death, or scrambling to figure out how to pay your bills if you are incapacitated. The pandemic might have many people wanting to discuss anything but death and incapacity, but it has also forced everyone to consider “what if?” with their own mortality, and consequently their family’s future.
If you would like to discuss wills, trusts, healthcare documents, or any estate planning questions, feel free to email me at email@example.com. I am happy to help you plan and prepare.