During this unprecedented time, it’s normal for people to worry about protecting their loved ones and assets. The coronavirus pandemic is unlike anything we’ve ever seen before, and even the healthiest of people can be affected. We haven’t seen the last or the worst of this illness, and while it’s never pleasant to think about the worst-case scenario, it’s vital to ensure your affairs and assets are up-to-date and in order.
1. Trusts and Wills
A will covers any property that is titled solely in your name and directs who will receive your property upon your death. An appointed legal representative, commonly known as a personal representative or executor, will carry out your wishes through the administration process. It should be noted that some states, Florida included, do not recognize holographic (or handwritten) wills.
A trust can distribute property before, at, or after your death. A trust is a legal arrangement through which a person or institution holds legal title to a property for a beneficiary. However, in order for a property to be included in a trust, it must be titled effectively in the trust’s name.
Each state has specific signing requirements for your will and your trust. Therefore, it is best to consult with an attorney in the field to ensure that proper statutory requirements are met to make your instruments valid.
2. Health Care Directive / Living Will
An Advance Health Care Directive (AHCD) is also known as a living will. It instructs others about your medical care choices if you are unable to make decisions on your own. This document will designate whether you would want any life-prolonging treatment, should you be in a terminal state. For example, if you would prefer respirators to help you breathe or any other life support machines to keep you alive. During this time, it’s especially pertinent to have this document updated and discuss these difficult situations with your loved ones.
3. Powers of Attorney
Power of attorney (POA) documents allow you to give a trusted individual the ability to make decisions on your behalf. It can be written to grant an agent the ability to act in very broad terms or to only take specific actions. If you become incapacitated without drawing up POA documents, your family may have to go through a difficult and expensive process of seeking guardianship or conservatorship to manage your affairs. This is especially important to have if you’re a high-risk or a compromised person during this pandemic.
Health Care Power of Attorney
This document gives a designated person the authority to make health care decisions, oversee your medical care, and ensure that your advance directives are followed. Without appointing a POA for your healthcare, your family members may not be able to access your medical information or help with decision making. A Medical POA is sometimes called a health care proxy or health care surrogate.
Medical Power of Attorney For Minor Child
This is one document that many people fail to prepare during an emergency, but one might argue it’s the most important because it greatly affects little ones.
If you get infected with the coronavirus and have minor children, a Medical Power of Attorney gives someone the authority to take your children to the doctor, make health care decisions on their behalf, and care for your children if you’re unable to. Although it’s unpleasant to think about, you must consider what would happen if you were hospitalized and couldn’t take care of your child.
Financial Power of Attorney
A durable power of attorney is a key document in your estate planning arrangements. It allows you to designate an agent to make legal and financial decisions and handle your financial affairs in the event that you cannot do so. Unfortunately, your bills and other financial matters do not stop if you become incapacitated. Without a financial POA, they may go unpaid and your family may not be able to access your accounts to cover your health care costs if they needed to.
4. Avoiding Probate
A will passes through probate, meaning a court oversees the administration of the will and ensures the inheritance goes to the right heirs and that all the decedent’s wishes are fulfilled. Assets that fund a trust pass outside of probate, so a court does not need to oversee the process, which ultimately saves time and money while also keeping your distributions private. Additionally, probate can also occur if there is no executed will or trust, and the probate court determines, based on the state’s laws, as well as other facts presented to the court, how to distribute the assets of the decedent’s estate to their loved ones.
Add a joint owner to your accounts or real estate.
If you and a spouse or loved one are thinking about purchasing a home, already own one, or have bank accounts in both of your names, joint ownership with rights of survivorship allows the property to pass automatically to your spouse or loved one without having to go through probate.
Write a Revocable Living Trust
A revocable living trust is a written agreement which covers you at all critical moments, such as while you’re alive and well, if you become mentally incapacitated, and after you die. It’s an alternative to a last will. Once the trust agreement is signed, you need to title your assets in the name of your trust. Only after your revocable living trust has become the record owner of your assets, instead of you, will the assets avoid probate.
If you have life insurance or retirement accounts such as an IRA or 401(k), you can avoid probate through the use of beneficiary designations.
What most people don’t realize is that many of your assets allow you to name beneficiaries. For example, your bank account probably enables you to designate a beneficiary payable on death. Many people simply don’t take the time to name a beneficiary on their bank accounts, investments or retirement plans. Life insurance policies, pension plans, 401K plans, IRA accounts, and stocks and bonds are all payable on death accounts. Your bank or brokerage company can provide payable on death forms which can be filled out quickly and conveniently.
Both young and old individuals have been affected by this pandemic, and many don’t have proper estate and lifetime planning in place. Because of this dilemma, people may feel rushed to get a will or other documents in a hurry and turn to quick, cheap, online sources. Although you can get a will online, it’s safer to hire a seasoned estate planning attorney licensed in your state to help ensure the estate plan is thorough, effective, and legal. It’s difficult to expect the unexpected, but even under the best circumstances, you can never be too careful with the wellbeing of your family and your assets. It’s impossible for anyone to know at this point when we’ll be safe from this pandemic, but with cases of Covid-19 on the rise in Florida and many other states, making sure your assets and all the necessary documents are current and easily accessible is absolutely essential.