When a Pandemic Catches You and Your Estate Plan Off Guard

Beth Misak |

By Paul Hynes, CFP®
April 2020

There’s nothing like a worldwide pandemic to expose the things that are missing in our lives. They can be as mundane as Lysol spray and canned tuna, or as momentous as an outdated or even non-existent will or medical directive.

If this pandemic caught you unprepared regarding an estate plan, take heart. You have lots of company. As reported by Forbes Magazine in February 2019, almost half of Americans over 55 do not have a will. Even worse, only a mere 18% in that age range have created all of the recommended legacy plan essentials: a will, a health care directive, and a durable power of attorney.

So let’s take this historic, still-developing Coronavirus story as a prod to revisit the basics. Estate planning is not just about what you want done with your stuff once you’re gone. And it’s not only for the affluent. It’s creating provisions for future, and often unforeseen, difficulties while you still can.

Here’s a starting list of important estate planning steps for everyone, regardless of the size of your estate:

1. Choose a guardian. Have you named someone to become the guardian of your minor children if you’re no longer there to take care of them? If not, the court will choose someone for you. It’s critical that you name who you want as guardian while the choice is still yours.

2. Plan for your incapacity. As this new virus seems to bear out, you’re more likely to become disabled than die prematurely. If you’re incapable of making your own decisions, you will need to designate someone, including backups, to make them for you. You need to have formal documents called “powers of attorney” for healthcare and financial matters. If you don’t have these documents, or if they are out-of-date, it will be much harder for your loved ones to take care of you should you need them to.

3. Plan for a child’s incapacity. As a parent, you’re used to making decisions about your child’s health and money matters. However, if your child is over 18, he or she meets the legal definition of adult. He or she must make their own financial and healthcare decisions. Thus, they also need to have powers of attorney for healthcare and financial matters.

4. Check your beneficiary designations. If you have IRAs, company retirement plans or life insurance policies, check to make sure that the beneficiary designations are up-to-date. Keep a copy of the form for your records.

5. Have a will. If you don’t have a will, the court will decide how to divide your stuff after you’re gone. Save your loved ones the trouble by having a will in place.

This isn’t meant to be an exhaustive list. For example, planning for larger estates (over $166,250 in California) might include a living trust. As with any complicated and important matter, consult with a qualified, experienced estate planning attorney. Having a plan in place is the best way to show your loved ones that you care. And, talk with us. We’re here to help you make sure you’re not caught off guard, during these times and all times.