Broker Check
When Estate Planning Surges to The Top of Our Priority List

When Estate Planning Surges to The Top of Our Priority List

May 05, 2020

As we find ourselves in the middle of the Coronavirus/Covid-19 shutdown, people are feeling an urgency to do estate planning. During times of crisis people allow themselves to see possible realities they could not see otherwise. What if something happens to me?

Estate planning becomes something that is critical, not just for death, but for incapacitation and medical procedures.  But where do you start?

5 key estate planning documents

  1. Will: This is a legal document that directs the distribution of your assets after death and can appoint guardians for minor children. If you die without a will, your state's laws decide who gets your assets and other property. Many states require two witnesses to watch you sign and date the will and then sign as witnesses. Usually one of the witnesses can be the lawyer who drafted the will. Most states do not allow beneficiaries under the will to be witnesses.
  2. Health care durable power of attorney: A durable power of attorney for health care, or health care proxy, is a good supplement to a living will (see below). It permits you to name someone to make health care decisions for you if you are incapacitated in some way (say, in a coma) but still alive. There is no reason you can't have both a living will and a durable power of attorney, and, in fact, you probably should have both. In some states you'll automatically get both, because the two are merged into a document called an advance directive. Typically, you would ask a friend or close relative to take on this responsibility. But be sure that you have discussed it with them and that they have agreed to do so ahead of time. Make sure people you pick as your proxies have a copy. In most states, the document must be signed, dated and notarized. Having it signed by an adult witness isn't usually required but is recommended.
  3. Living will: A living will, sometimes called an advance care directive, is a sort of hybrid will that outlines the kind of medical care you want if you are terminally ill. For example, if you don't want to be kept alive on life-support systems, such as a respirator or feeding tube, you can make that known. (As morbid as it may seem, this could save your family a substantial sum in medical bills.) You can include instructions for organ donation. For a living will to be valid, it typically must be witnessed by two adults, and they usually cannot be members of your family or your attending physicians. Depending on your state, you will need to sign the document in front of witnesses, a notary or both.
  4. Durable power of attorney for finances: A financial power of attorney is a document that gives someone the authority to handle financial transactions on your behalf. It is designed to let someone else manage all of your financial affairs for you if you become incapacitated. In some states you simply sign the document in front of a notary; others require witnesses to sign as well.
  5. HIPAA authorization: The federal Health Insurance Affordability and Accountability Act set privacy rules for patient records; a release document for records is generally executed along with estate planning documents. It allows you to name people to be treated with the same rights you have regarding disclosure of medical records. Typically, this includes your spouse, children or other close relatives, so that these family members can communicate with doctors and nurses and find out how you are doing if you're hospitalized.

Should you do it yourself or hire a lawyer? If you can we suggest using a lawyer. You can probably do a few virtual meetings and exchange documents in a secure manner while in person visits are not possible. There are resources to do it yourself such as LegalZoom, but the harder part is determining what you need. This is usually found by having an attorney spend time learning what is important. Sometimes folks don’t know what they need or want until after spending time with an attorney learning what is even possible.

Bryan D Beatty, CFP® AIF®