In these challenging times of the COVID-19 pandemic, estate planning can be at the forefront of ensuring that clients and their loved ones are protected. Certain high-risk groups, such as medical professionals, first responders and the elderly or other compromised persons, may be more motivated to update existing plans or establish estate plans for the first time that accomplish their goals. Others who have begun their estate plans and perhaps put them on the back burner now want to get their plan over the finishing line.
To provide for their beneficiaries, many people utilize revocable trust planning, which allows them to avoid probate with proper coordination of assets and also to keep their affairs private, which is important to many people. A common misconception is that a person must have significant assets to consider a revocable trust – this is not true. Revocable trusts can be a tool to provide for a plan for distribution of a client’s assets during their life and after their death.
An estate plan should also include appropriate documents, such as powers of attorney for financial and medical decision-making in the event the client is incapacitated, so that another person can take care of these decisions. Becoming incapacitated without having appropriate documents could lead to a legal guardianship, but in some cases that can be avoided through proper planning.
It’s also important that individuals have an advance directive or living will that indicates their preferences for end-of-life decision-making and who will carry out these wishes. Those decisions include whether the individual wants life-sustaining medical treatment and administration of hydration and nutrition. It’s not uncommon for physicians to ask for this document so it can be kept on file, or for hospitals to ask for it if a person is receiving medical treatment in a hospital.
Beneficiary designations on assets such as retirement plans like 401(k)s or individual retirement accounts, as life insurance policies, are another item that’s often overlooked but critical to be revisited and be completed appropriately. Many times there are “surprises” on these forms that are discovered when it is too late. Such surprises can include no beneficiaries, undesired beneficiaries, a lack of secondary or contingent beneficiaries, or incorrect allocations among beneficiaries.
Further, given the tax laws that have changed significantly in more recent time, including an increased federal estate tax exemption and the enactment of the Secure Act, not having an updated estate plan can lead to unintended results for beneficiaries as well as increased costs in administration.
Oklahoma is among the states that have enacted laws that allow the remote notarization of some documents, which is an important part of properly executing an estate plan. However, wills, powers of attorney and advance directives also have a witness requirements that cannot be done remotely. As a result, during these times, executing the estate plan can have its challenges with so many people working remotely and offices closed to the public. Execution of documents with proper social distancing and observing other health care recommendations is vital.
Not having a plan is never a “good plan.” Clients are well advised to contact an estate planning attorney to develop an estate plan to provide peace of mind in protecting them and their loved ones – particularly those in groups that are at high risk of contracting COVID-19.
Samantha Weyrauch Davis is an attorney and certified public accountant in the tax practice of the national law firm