In light of these unprecedented times and the spread of the Coronavirus (COVID-19), the Centers for Disease Control and Prevention (CDC) has issued guidelines for all of us to follow in order to protect yourself and to protect others. Large gatherings are cancelled and we are encouraged to limit physical contact and take extra precautions to take care of ourselves and our families, not out of fear, but out of concern and care for those around us and to stop the spread. In order to minimize exposure and the spread of the virus, take extra steps to protect yourself and your family by actively supporting your immune system, practice proper personal hygiene, which includes proper hand-washing, and limit physical contact with others. Additionally, ensure you are prepared and have food, supplies and resources for 30 days at home. Please visit the CDC for a complete list of the Guidelines if you haven’t done so already.
During these unprecedented times, please know that my office has taken extra precautions to ensure your safety. Not only is my meeting room thoroughly disinfected before and after every visit, including tables, chairs, door handles, light switches, and frequently touched surfaces, our office has undergone enhanced professional cleaning protocols and we have multiple disinfecting cleaners throughout the space to clean frequently and hand-sanitizers by the front door and in each room to use before meeting. I have limited physical contact and hand-shaking has been suspended to ensure your safety.
Your health and safety is important to me and the extra precautions include implementation of virtual meeting options by partnering with Zoom, a video conferencing technology solution. Utilizing technology, my office can continue to serve and support you while staying connected and minimizing physical contact. These are the times where it is more important than ever to ensure you are prepared, which includes having your estate planning in place.
The impact that COVID-19 has on our lives during this unprecedented time reminds us of the fact that we must be prepared for the unexpected, which includes proper planning. These times remind us that life is uncertain and we must plan for the unexpected. At a minimum, it is absolutely critical that someone can legally make health care decisions for you in the event you become ill.
In the event you or a loved one do get sick and need to go to the hospital, it’s important to prepare a list of your needs. Include your preferred hospital, your primary care doctor and any specialists, food allergies and preferences, and supplements and medications you take. Also indicate any procedures you desire or don’t desire. Additionally, you should name the person or people authorized to make healthcare and financial decisions for you if you cannot make them for yourself. I can help you prepare these documents, either to take precautions against coronavirus or for any other reason.
During this time of quarantine at home, you may have more time on your hands than usual so it is a time to not only do some spring cleaning of your home, but to dust off your estate plan to ensure that it will still achieve your goals. If you have completed your planning previously, it may be due for a review to avoid unintended consequences that may arise as a result of divorces, deaths, births, or other changes that have occurred since the last time your plan was reviewed, including changes in the law. If you are new to estate planning, now is a great time to start.
Here are a few of the items you should review with my office so any necessary changes can be made to ensure your estate plan is up to date:
If you have children, have they reached adulthood? It seems like just yesterday that they were kids, but time passes quickly. Your estate plan likely needs to be revised if your children are no longer minors. Now that they are adults, the guardian you named to be their caregiver no longer needs to be included in your plan. In addition, once your children have reached adulthood, you may want to adjust your estate plan to take their personalities and needs into account and discuss strategies to protect their assets from liability and irresponsible spending. Also, if your children now have a family of their own, you may want to revise your estate plan to include your grandchildren.
Do you need to name different fiduciaries? Your estate plan can be impacted by more than just changes in your life circumstances. If your fiduciary, e.g., executor, trustee, or agent under a power of attorney, has died, moved far away, is otherwise no longer able or willing to serve in that role, or changed his or her name, you need to revise your estate plan to designate a new fiduciary or reflect the name change. It is also wise to name alternates who can serve if the fiduciary is not available when needed—and to regularly verify that those alternates are still available and willing to act if necessary. If the fiduciary you have named is not available when you pass away, and you have not named an alternate, the court will appoint someone to act in that role, and it may not be the person you would have chosen.
Has your spouse passed away? It is especially important to review and revise your estate plan if your spouse has died. The following are only a few of the changes you may need to incorporate into your estate plan to ensure you and your family are still fully prepared for the future:
- It is likely that you named your spouse as one of the main beneficiaries of your will, trust, retirement account, or life insurance policy, so it is crucial for you to update the beneficiaries named in those documents.
- If your spouse was named as the successor trustee of your trust, your agent under a power of attorney, or your health care agent, you need to take the necessary steps to name another trusted person to fill those roles.
- In some cases, tax issues should also be discussed with your financial advisor and attorney. If you and your spouse have a large amount of money and property, the estate of your deceased spouse may want to consider filing a Form 706 (United States Estate and Generation-Skipping Transfer) Tax Return) within nine months from the date of death to allow you to apply his or her unused estate and gift tax exclusion amount to your own transfers during your life and at death. This can potentially exclude a very large amount of money and property from your taxable estate, as the total exclusion amount for married couples during 2020 is $23.16 million.
- If you and your spouse owned real estate jointly with a right of survivorship, the property was automatically transferred to you when your spouse died. Although a new deed is not required, you may choose to file the death certificate or an affidavit in the county real estate records office providing notice of the transfer. If full ownership of the property was not automatically transferred at death, an executor’s deed conveying the property to the heir will provide evidence that the deceased spouse is no longer an owner of the property.
How will recent changes in the law regarding retirement accounts affect your beneficiaries? A new law called the SECURE Act made significant changes that could have an important impact on many non-spouse beneficiaries, and you should discuss the potential consequences on your estate plan with my office and your financial advisor. If you have named your children as the beneficiaries of your retirement account, they will now have to withdraw the entire balance within ten years of your death instead of “stretching” distributions over their own life expectancy (as allowed under the old law). This will result in the acceleration of the income tax due, which could push your children into a higher tax bracket and eat up more of their inheritance than you anticipated. In addition, if you created a revocable living trust or standalone retirement trust with conduit provisions, it will no longer provide long-term asset protection and growth because the trustee is now required to distribute the entire balance to most beneficiaries within ten years of your death. We can discuss alternative trust structures, such as an accumulation trust, which can provide longer term protection for your beneficiaries.
In addition, it is prudent to regularly review and confirm your retirement account information to ensure that your beneficiary designation forms have been filled out correctly: You should verify that you have named an individual or trust as your primary beneficiary and that contingent beneficiaries have also been named.
Having an estate plan in place in the event something happens to you can allow your family to handle the situation with the least complication and expense as possible while focusing on what truly matters – being with family and grieving. Without proper planning, the result could be a big mess for your family and loved ones to straighten up.
We are here to support you making educated, informed, empowered decisions for yourself and the people you love, in all areas of your wealth, health, and happiness. Give my office a call so we can create or review and amend your estate plan to ensure you will receive the care you need if you become too ill to care for yourself and to provide for your family members or loved ones once you pass away. As specified, your health and safety is important; therefore, my office has taken extra precautions for in-person meetings and offers virtual meetings as well. I look forward to serving you during these unprecedented times.