Latest News / Estate Planning During a Pandemic
Estate Planning During a Pandemic
October 26, 2020
Even in a pandemic, estate planning must go on. Sadly, for some individuals, it will acquire a new urgency.
Attend to the essentials
The three foundational documents that everyone should consider having are the health care power of attorney, the financial power of attorney, and a will. In many cases a trust will also be essential for sound wealth management.
If a health care power of attorney is several years old, a review is a good idea. Typical questions:
• Has the best person been selected for exercising the power?
• Is the power sufficiently clear about what should happen in the event of terminal illness?
• Does the power identify the physician who should be called upon to make a determination of terminal illness or persistent vegetative state?
Similar questions may come up when reviewing a financial power of attorney that is several years old.
• Has the best person been identified for exercising the financial power? Do changing circumstances suggest that another person should be selected, or that two people should jointly be exercising the power?
• How extensive will the power be? Can the attorney-in-fact make gifts or otherwise take steps to implement an estate plan? Should so extensive a power require more than one person for exercise?
The expansion of the amounts exempt from the federal estate tax probably reduced the urgency for estate planning and drafting wills. The pandemic ought to change that dynamic. The drastic lowering of death taxes at the federal level and in most states should give estate planning attorneys more flexibility in meeting their clients’ objectives. Still, the doubled federal exemption is good only until 2026.
The future is always unknown, but when the pandemic comes under control, and financial markets stabilize, there could be a significant temporary increase in the demand for estate planning. General Jim Mattis reportedly said, “There is nothing better than getting shot at and missed. It’s really great.” Those who survive the pandemic may want to take the opportunity to attend to financial chores that have been put off for too long.
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