Updating Your Estate Plan After COVID-19
As of this writing, COVID-19 infections appear to be on the decline in Michigan—some welcome good news after months of stress and worry over this novel infection. And while the decline in cases is a positive development, it is not reasonable to expect that everything will just go back to normal (or that we will not experience another wave of infections). Instead, this is a good opportunity to take stock of what we’ve learned, and to ensure your estate plan is updated in case some future emergency should arise.
That emergency could take the form of another wave of infections, as many medical experts predict, or some other unforeseen calamity. We may not know exactly what is coming around the bend, or when it will happen. But COVID-19 has taught us a few things, and we can use that hard-won knowledge to protect ourselves and our families.
Do You Have a Power of Attorney or Patient Advocate Designation?
On some level, we’ve always been aware of that: people have strokes or are involved in serious car accidents. But somehow, we never think it will happen to us—or that if it will, it won’t be until we are older.
COVID-19 has shown us that someone can be perfectly healthy one day and unresponsive on a ventilator two weeks later. And while older people were most heavily infected initially, there has been an uptick in the number of younger people who are becoming ill. If it were you in that hospital bed, who could pay your bills and manage your finances for you? More importantly, who could make medical decisions on your behalf if you weren’t in a position to make them for yourself?
If you have executed a durable financial power of attorney (POA) and patient advocate designation (PAD), you already know the answers to these questions. Your agent under a durable financial power of attorney (“durable” means the agent’s authority continues after you become incapacitated) can handle your finances. When you create the POA, you can give broad authority to your agent, or limit their power to certain specific matters.
A patient advocate designation is also known as a health care power of attorney. This document gives someone you trust the power to make decisions regarding your medical care if you are unable to make or express decisions. It’s important to not only create the designation, but discuss your wishes with your patient advocate designee—preferably in writing so that in a time of crisis, they will be confident that they are honoring your wishes. Your estate planning attorney can help you convey this information.
Does Your Estate Plan Name a Guardian For Your Children?
There are several reasons you should have a will. If you are a parent of minor children, one of the most important is that a will allows you to name a guardian for your children in the event of your death, as well as a conservator (someone to manage the assets you leave behind for your children). If you are a single parent, naming a guardian is critically important to provide for your children’s future. If you are not a single parent, you may have put off naming a guardian, assuming that your children’s other parent will take care of them if anything happens to you.
Unfortunately COVID-19 has taught us that multiple members of a family can succumb to infection. While the odds are against two young healthy parents in one family being claimed by this disease, it still makes sense to plan for a worst-case scenario.
Does your Estate Plan Avoid Probate?
For many of us, COVID-19 has led to an urge to simplify our lives. It is worth considering if you would want your family to have to go through the effort and stress of probating your estate in the event something should happen to you.
Probate is less complicated than it used to be, and there may be legitimate reasons for your estate to go through probate. That said, there are also compelling reasons to avoid probate using a living trust. In fact, probate avoidance is a common reason for placing assets in a living trust. During your lifetime, you act as trustee and can use and enjoy the assets in the trust just as you did when they were in your own name. Upon your death, the successor trustee named in the trust document takes over management of the trust, and distributes trust income and assets to your beneficiaries according to the directions in the trust document.
The process takes place entirely outside the probate court, meaning that your loved ones can have access to the funds they need without delay. Furthermore, since probate court activity is a matter of public record, a trust is also a good way to preserve your privacy; unlike a will, trusts are not filed in the probate court.
If COVID-19 has made you realize that it’s time to update your estate plan, we can help. Please contact our law office to schedule a consultation.
