Top 10 Estate Planning Tips in a Time of Coronavirus

Paperwork for a will. — (Image credit: Getty Images)

It has arrived: the unexpected, potentially life-threatening circumstance you had in mind when you set up your estate plan, and now you’re feeling really relieved that you took care of it before the emergency struck. Right?

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Even if you haven’t already set up your estate plan, and even in today’s world of social distancing, it isn’t too late to get your affairs in order so that you and your family are prepared for the worst. There may be some things out of your control right now, but your estate plan isn’t one of them. Here is what you need, and how you can get it set up, even though – lucky you – you can’t get within 6 feet of a lawyer.

Advance Health Care Directive

Sometimes called a patient advocate designation or health care proxy, this document names someone to make health care decisions for you if you ever cannot do so yourself. It can also describe your preferences for your end-of-life care.

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Most hospital systems have a form you can use, or you can find a form for your state in the advanced care planning section of the National Hospice and Palliative Care Organization.

Last Will and Testament

You know what this is and what it does, and you wouldn’t be reading this article if you didn’t think you needed one. But how do you put one together when you can’t see a lawyer? There are many websites, including FreeWill.com, providing self-help tools that let you assemble a document that meets legal muster in your state. Several states also provide a statutory form. Or in a pinch, many states even allow a “holographic will,” which is written entirely in the will-maker’s own handwriting. If you choose to create a holographic will, be sure it covers the basics:

Name someone as the executor.
Name a guardian to care for your minor child(ren) if necessary.
Describe how to divide up your assets, including any charitable gifts.

Don’t forget to sign and date it. For bonus points, take a picture of it and text or email the picture to whomever you chose to be your executor and tell them where to find the original.

Financial Power of Attorney

This document gives someone the legal authority to manage your financial and property affairs on your behalf while you are still living. It will be particularly useful if you are stuck somewhere – say in quarantine or in the hospital – and need someone to pay your bills, file your taxes, hold your mail, or do any of those other tasks that keep your life running. You should only choose as your agent someone you trust completely, like a spouse, sibling or best friend. You can download power of attorney forms from your state government’s website or create your own online from places like LegalZoom, FreeWill.com and others.

The hardest part about implementing these three documents will be signing them in a legally valid way. Requirements across states differ, but most require two witnesses who are physically present for the execution – “witnessing” using remote video-conferencing software may not be enough. Many states also require the witnesses to be “disinterested,” meaning a witness can’t be your spouse or someone who benefits from whatever you are signing. One socially distant technique: Meet your witnesses in a parking lot so everyone can see you execute your documents through the windows of your car. For health reasons, be sure everyone signs with their own pen. A few states have enacted legislation to loosen these regulations, and a handful of states even allow digital signatures on some documents, but this is the exception rather than the rule.

I intentionally omitted a Revocable Living Trust from this list. Although these are no longer reserved for the rich and famous, they can be complicated to put together if you are not an attorney. (And for you non-estate planning attorneys who want to tempt fate, remember that even a neurosurgeon wouldn’t operate on her own foot just because she’s also a physician.) But if you have minor children, a blended family, or have more than just the simplest of assets, you may benefit from having a Revocable Living Trust. You should make an appointment to talk with an estate planning attorney as soon as the coronavirus dust settles.

In addition to getting your estate plan documents in place, there are other steps you should take now to get your affairs in order.

Retirement Accounts

Update your beneficiaries to make sure your hard-earned, tax-advantaged savings go to the right person/people when you die. Most major servicers will let you do this online, but some may need you to fill out a form and mail it in.

Bank and Investment Accounts

Most financial institutions will allow you to choose someone as the “Transfer on Death” (or “Pay on Death”) beneficiary of your accounts. When you die, the person you chose will automatically receive the account without needing to administer your estate with a court. This can be particularly efficient if you have a small account balance and/or very few assets. But think twice before setting up a “joint” account with someone other than your spouse. A joint account-holder is a co-owner, so if that person gets into financial trouble, then your account will be in trouble, too. And if you change your mind and want them off the account, they may say “no,” and then you are in a bad spot.

Life and Disability Insurance

If you already have insurance, update your beneficiaries, either online or with the insurance-provider’s paper form. If you do not have insurance and there are others depending on you and/or your income, then you should buy insurance. It is best to buy it when you are young and healthy because the rates are cheaper. Some employers provide these benefits, but you should consider whether the employer-provided benefit would really be enough for your family if you could no longer work.

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Digital Assets

If you are dead or incapacitated then someone needs to be able to access your digital assets, like email and social media accounts. You should address this in your Financial Power of Attorney. In addition, many digital service providers let you appoint someone to access and manage your account if they can show that you are dead or incapacitated. Don’t just make a list of passwords and hide it in your desk drawer. Not only is this not secure, your passwords change periodically and then your list becomes worthless.

Pets

Make sure you’ve thought about who will walk your dog and feed your fish if you end up in the hospital or die. Make sure they have a key and know which vet you use.

Funeral and Burial Arrangements

If you have specific wishes about this, you should write them down and make sure somebody knows where to find your notes. Don’t put them in your Will because most people wait to look at that until after the funeral is already over.

Family Meeting

Finally, now might also be a good time to have the conversation with your loved ones about their own estate plans, especially if they are in a high-risk category. What is the plan if they get sick? Who is going to make their health care decisions? Pay their bills? Feed their cat? Or if the worst happens, who’s in charge of administering the estate? Do they know where to find important documents and statements?

This should be enough of a Band-Aid to get you through this crisis. But before the next one strikes, take the time to meet with a professional who can review the plan you made, or make a new one. You need a plan that you know is going to work when you need it to, even if – and precisely because – the next crisis is unexpected.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Sam Nuxoll is an estate planning attorney based in Ann Arbor, Mich., at the law firm of Miller, Canfield, Paddock, and Stone PLC. In addition to preparing wills, trusts and powers of attorney, he provides estate and trust administration services and wealth and business succession planning. Before becoming an attorney, Sam served for 12 years in the United States Army, including two overseas deployments.