The risk of COVID–19 has left us feeling disempowered, one of the reasons many people are taking this time to review their estate plans. If you don’t have a Will, you should. If you do, make sure your loved ones do, as well. And particularly now, make sure you have a power of attorney, living will, and have designated a health care agent (or proxy). With a durable power of attorney, you appoint a person (or persons) to make financial decisions on your behalf, such as signing checks or filing a tax return. It’s a broad power, therefore, be certain that your agent has unquestioned integrity to act in your best interest.
A living will enables you to state your preferences with respect to life-sustaining medical treatment. Despite the abundance of form documents for living wills, you can (and should) take extra care to customize this important statement of your wishes. You should also name a person (or persons) to make health care decisions if you are unable to do so by signing a medical power of attorney. This person will usually also be authorized under a HIPAA Release to access your medical records and communicate with your health care providers.
Beyond the basics, here are five areas where additional actions should be considered:
1. Check to be sure your living will does not preclude intubation or experimental treatments. In a COVID environment, intubation would be essential if a ventilator was needed. Similarly, an “experimental” anti-viral drug, such as Remdesivir might be necessary to combat the virus. You might also have a separate addendum to your living will that states that, in a COVID environment, provisions in the addendum supersede those in your living will. The addendum might, for example, state your preferences with respect to quarantining, visitations if ill, and provide broad powers for your agents to communicate with your health care team via less traditional means, such as video conference. You might even have language that holds harmless medical personnel who may have to make prompt and improvised decisions.
2. Ideally, information about your medications, doctors, important contacts, as well as your estate planning documents, should be housed in an electronic vault or cloud portal, accessible by smartphone. At minimum, a so-called “Emergency Envelope” could include such information. It should be kept in a conspicuous location where it can be picked up and taken when needed. Your agents under a financial power of attorney or health care directive should have these documents and understand your wishes. Of course, those named should be carefully selected given the breadth and scope of the powers given to them. And be sure to name a backup in case the agents you name are unable to serve.
3. Some financial powers of attorney only take effect when one or more doctors certify that a person is unable to make his or her own decisions. In a COVID environment, certification of a so-called “springing power” would be nearly impossible to obtain given the overload doctors face and travel limitations.
4. The SECURE Act made dramatic changes to retirement benefits, such as 401(k) plans and IRA rollovers. The Act offers more opportunities for retirement saving, but eliminates the so-called lifetime “stretch-out” for beneficiaries who inherit IRAs and other retirement benefits. At the same time, the “stretch-out” remains available for certain classes of beneficiaries, such as surviving spouses, minors, and disabled persons. Many clients may now want to have retirement benefits paid to a specially-designated trust rather than left outright to beneficiaries. This might be especially important if the beneficiary is disabled where receiving an outright inheritance could disqualify him or her from needed government benefits. With the pandemic raging, these changes have taken a back seat, but nevertheless need to be addressed.
5. Finally, the Federal government continues to accrue enormous debt in responding to the pandemic. It seems unavoidable that taxes will be raised at the Federal and state levels. For those with significant assets, transfers to certain trusts can yield gift, estate, and generation-skipping tax savings. Those without large estates can still benefit from the myriad uses of trusts. They offer more flexibility when combined with a basic Will, and are more readily accepted than a power of attorney when acting on another’s behalf.
These are unprecedented times requiring different (and perhaps) more creative thinking, including when it comes to estate planning.