Among many lessons that COVID-19 has presented, this unprecedented event has taught us about the great uncertainties in life. Unfortunately, surrounded by the unknown, unemployment, illness and death, there has never been a more critical time to make sure that the interests of you and your loved ones are properly protected. As we try to make sense out the world we are living in, there is an opportunity to proactively plan for a new normal with a few basic life and estate planning documents that every individual over the age of 18 years old should have in place. In fact, with the recent approval of virtual signatures and notarizations, there has never been a quicker and easier process for getting your documents, and life, in order.
Here is a recommended list of actions to take to protect your assets and to hopefully create a peace of mind during very stressful times:
Last Will and Testament
You should complete a Last Will and Testament to provide for distribution of assets held in your name alone (i.e., without designated beneficiaries or joint owners). You can not only control “who gets what” but can also dictate the terms of how they inherit. This is particularly important for couples with minor children, as without the inclusion of a Trust for their inheritance a Guardian of the Property will need to be appointed to control the child’s inheritance.
In addition, it is also important in this document to designate guardians of minor children, including the appointment of someone to make medical and educational decisions for a minor child if the parents are unable to do so. These forms also provide for a temporary guardianship after the death of both parents.
If you have strong feelings about the care you do or do not receive at the end of your life, you can complete a “Living Will.” It can serve as evidence of your wishes and can be a useful tool for your appointed agent. A Living Will can be particularly helpful if you want to make unconventional decisions or if you think your Agent will need reassurance that they are making the “right call.”
Health Care Proxy
Anyone 18 or older should appoint someone they trust (except certain health care professionals) to serve as their Health Care Agent by completing a Health Care Proxy. You can also appoint successor agents as back up, but you cannot appoint more than one agent to act at a given time. Agents have the authority to make all medical decisions but can only make decisions to withhold artificial hydration and nutrition if the agent is aware of the principal’s wishes on this issue. The Health Care Proxy should either state the principal’s wishes or state that the agent is aware of the principal’s wishes. You can also provide your Agent with instructions about Organ Donation in the Health Care Proxy.
Power of Attorney
Anyone 18 or older should use a Power of Attorney to appoint an Agent to handle their financial and legal affairs. You should also consider executing a Power of Attorney form at financial institutions where you have assets and in states where you have real property or substantial financial ties. Unlike with a Health Care Proxy you can appoint agents to act jointly.
Statutory Gifts Rider to Power of Attorney
This rider to the Power of Attorney is the only way to authorize your agent to make gifts on your behalf. This includes typical “gift” transactions but can also apply to any ongoing support you provide to family members.
Designation of Beneficiary Forms
Certain types of accounts, namely retirement accounts and life insurance, allow the owner to provide for distribution of the asset after death according to the instructions given on a Beneficiary Designation form. It is vitally important to understand what happens to these accounts by default and to make sure that the designations are changed to appropriately fit within your overall estate plan.
FNL works with estate planning experts and tax professionals to ensure that your assets and health care directives are properly protected. During these uncertain and stressful times, we are here to help and will work to accomplish your unique goals from basic document review and execution to complex family trusts. Please do not hesitate to contact us to discuss your concerns and needs or simply answer your questions.