The impact of the coronavirus pandemic has been profound. With such a dramatic disruption in such a relatively short period of time, it’s not surprising that families and individuals have been focused on taking care of urgent and immediate priorities as they adapt to challenging new circumstances.
But the unpredictable nature of the crisis is a timely reminder of the importance of thoughtful, proactive, and comprehensive estate planning.
While questions of health care proxies and powers of attorney understandably come to mind during a public health emergency, medical issues are only one part of a broader discussion and a more thoughtful approach to estate planning. What follows are some key considerations and estate planning best practices, as well as some thoughts about how COVID-19-specific issues might influence decision making.
Cover the Bases
While every estate plan is unique, all estate plans should include (at minimum) the following documents:
- Trust agreement
- Last will and testament
- General durable power of attorney, for finances
- Durable power of attorney for health care
The goals for any thoughtful and comprehensive estate plan should:
- Establish a clear road map for how and to whom you want your assets distributed.
- Appoint a guardian/conservator for minor children.
- Ensure that people have been appointed to make medical and/or financial decisions if you are incapacitated.
- Avoid probate.
- Avoid/minimize estate taxes.
It is also important for parents to recognize that adult children need estate planning documents of their own, such as a last will and testament, general durable power of attorney, and a durable power of attorney for health care.
Planning and Priorities
While families and individuals are understandably formulating budgets to ensure that bills are paid and daily essentials are taken care of first, estate planning should also be prioritized. The pandemic has reinforced life’s inherent uncertainty and shown us all how quickly the things we all take for granted can change. Being proactive about estate planning isn’t fatalism; it’s realism: the ultimate expression of pragmatic and responsible planning, and a genuine act of care and protections for our loved ones.
And while budgets may be tight these days, estate planning is both literally and figuratively one of the best investments you can make. Which is why all advisers (financial, legal, accounting, and others) should be reinforcing the importance of estate planning to both existing and prospective clients. The bottom line is that a crisis isn’t a reason to put estate planning on hold: it’s a reminder that uncertainty and disruption is the precise reason that plans like this are so important to have in place.
Preparation and Review
Even with an estate plan in place, it’s important to periodically review that plan — and to make sure parents and children have plans of their own. It’s also a good idea to put together all estate planning documents — including critical information and key contacts — in a clearly labeled and accessible folder, and to make sure that at least one other family member knows how to access that information. Uploading key documents to a secure online cloud portal is also an increasingly popular approach.
When it comes to digital assets (text messages, emails, photos, music, social media activity) Michigan law allows fiduciaries to access those assets, but they will still need to have passwords or usernames, as well as detailed instructions for preservation or disposal of assets.
New Virus, New Guidelines
There are several important estate planning points that are especially relevant in the context of the current crisis:
First, a power of attorney can become effective immediately, as soon the documentation is signed. While traditional power of attorney specifies incapacitation as a prerequisite, establishing that status requires two doctors’ letters or a probate court order, neither of which may be possible given logistical or travel limitations. You can always change it back in the future, or even set an expiration date, after which it will revert back.
Second, consider updating existing plans that specifically decline intubation/ventilation. Such measures may be a necessary part of the standard course of treatment for some COVID-19 patients.
Third, don’t let COVID-19-related stay at home orders or other logistical limitations be an impediment to moving forward and getting documents signed. Your state of residence may have orders, procedures, or laws in place that allow for the use of technology and virtual signing of documents that is legally binding.
Finally, make sure you identify an experienced estate planning professional who views estate planning as a service, not a commodity. You not only want someone who knows what they are doing, but who will listen to your needs and customize a plan to meet those needs. That’s good advice not only during the pandemic, but also for the brighter days ahead.
Aaron Sherbin leads the estate and wealth planning practice group at Jaffe Raitt Heuer and Weiss in Southfield. He specializes in trust administration, wealth preservation and transfer, and strategic business planning services for closely held companies and family businesses. He offers succession planning, post-mortem planning, and asset protection. Sherbin also serves as a mergers and acquisitions transactional attorney focusing on federal tax law, buy-sell agreements, operating agreements, and shareholder agreements.