There are plenty of uncertainties when it comes to COVID-19. What happens if you get sick, lose your job, or can’t see your family and friends for an extended period of time? Why add to the list of uncertainties by not being prepared with an estate plan?
Having a good estate plan will help you and your family feel at ease.
What type of documents are needed for an estate plan?
1. Power of Attorney - This allows another person to handle your finances in the event you are alive, but incapacitated. It confers broad powers on an "agent" – your chosen person – over the "principal" – you and your assets. You should only name the most trusted persons as an agent. Once a person loses mental capacity, it is too late for them to execute a Power of Attorney, and a costly, lengthy court Guardianship might become necessary.
2. Health Care Proxy - This allows another person – a "health care representative" to make medical decisions on your behalf should you become unable to do so. You should choose a person aligned with your health values and with sufficient "tough love" to make difficult decisions. You must name one person at a time for this role. We suggest a primary with two alternates.
3. Living Will (Advance Health Care Directive) - This pre-authorizes the withholding or withdrawal of life support under specific end of life conditions. For example, you may wish to refuse life support if you are at the end stage of a terminal illness or are deemed permanently unconscious (e.g., in a coma) by two physicians. Your health care representative will be able to use your Living Will to act on your behalf with your medical team to act in the way you would have wanted were you able to speak for yourself.
4. HIPAA Waiver – This document allows your named agents access to your medical information so that your doctors can speak with them in the event of an emergency or if you are incapacitated.
5. Last Will and Testament - This is the most common way for people to leave their assets after death to their beneficiaries. It is simple in the sense that it says who gets what, when, and how. Wills work very well where all beneficiaries are taking distributions outright versus in trust or for very small estates or states with a straightforward probate process.
6. Revocable Living Trust - Revocable Living Trusts are "active" during your lifetime, such that your assets can be transferred there during your lifetime. Why? If you become incapacitated, a trusted family member can act as Trustee and manage assets for you, keeping out scammers and predators and protecting you from yourself by making an unwise investment or spending decisions. Revocable Living Trusts are also private and not filed in court and are also beneficial where we are creating lifetime trusts for adult children because your trustees will never need court approval for a change of Trustee down the road.
Is it possible to create an estate plan without an attorney?
Yes, there are plenty of websites online such as LegalZoom that allow you to create estate planning documents. However, it is always best to seek a professional's expertise to make sure that things are done right. Having a well-done estate plan can save you and your fiduciaries a lot of time and money in the future, so it's best to have it done the right way rather than go the cheap route.
How do I organize and store my estate planning documents?
1. Give the originals to your lawyer. If you do not feel comfortable holding onto your original documents, you can ask your attorney if they can keep them for you. However, it is best to keep your originals yourself if possible so that you have access to them at all times if/when needed.
2. Provide copies to the appropriate people. Ensure that your key people (financial advisor, doctor, and successor agents) have copies of your relevant estate plan documents. It is also essential to let your agents know that they are named in your documents and what their responsibilities will be as your agent should they eventually need to act.
3. Keep high-quality, scanned documents. You should keep digital copies of your documents on your computer or a USB flash drive. This way, they can quickly be sent via email to anyone who needs a copy, and you can easily print extra hard copies if needed.
4. Label all your documents clearly. Ensure each scanned document is saved with the appropriate file name such as "Last Will and Testament of …" rather than generic names such as "Scan 1". This way, your documents are easy to find when you need them.
5. Save a list of your digital accounts and passwords. Make sure to share this information with a trusted family member or friend so that they can retrieve your online accounts if something happens to you. This includes financial accounts, as well as email and social media accounts.