CORONAVIRUS (COVID-19) & ESTATE PLANNING
During times of crisis most of us share similar fears and concerns. The Coronavirus pandemic is no exception. Collectively, we are all worried about our families and friends, livelihoods and neighbors.
What used to be a nagging voice in our head is now a full conversation with the volume cranked up to ten! What will happen if I get sick? What will happen if I become incapacitated or die?
ESSENTIAL ESTATE PLANNING DOCUMENTS
The documents below allow others to make decisions for you should you lose mental capacity and ensure your wishes are honored at your death. Without them, your family will likely waste tens of thousands (or a lot more) in court trying to care for you and administer your estate.
While we hope that these tragedies do not happen for a long time, it’s important to create the documents now before it’s too late. Once you lose mental capacity, you cannot create them.
- An Advance Health Care Directive (AHCD)* states who will legally be able to make health care decisions for you and exactly what are your wishes that you want honored. Without these documents, your spouse cannot do this nor can you do them for your young adult kids or aging parents.
The details of an AHCD should be carefully considered while you are healthy and able to think through quality of life issues and appropriate medical treatments. The more details that are included, the easier it is when family or close friends need to make difficult choices in emotionally challenging times.
- A Durable Power of Attorney for Finance (DPOA)* authorizes someone to make financial and legal decisions for you if you become mentally incapacitated. This including paying your bills, filing taxes, dealing with Social Security or your insurance, etc.
- A Will states who receives your assets when you die but, contrary to popular understanding, almost all Wills go through probate. Probate is very expensive and assets are frozen for months. You can avoid this with a Trust.
The Will also names a guardian to raise your minor children and a caretaker for your pets. With a Will alone, your children inherit everything when they turn 18 (and that can be its own kind of disaster).
- A Trust also states who receives your assets when you die but, if done correctly, it avoids probate. It also allows you sprinkle assets over time for your kids or grandkids and impose conditions on when and how they inherit larger sums of money.
For more details, keep reading.