How Estate Planning Addresses Coronavirus (Covid-19) Concerns
The current coronavirus pandemic is a time of uncertainty and uncharted territory. Despite the physical distancing between us, people are coming together and families are reconnecting. We all have a shared concern for our families, friends, businesses, and communities. We are anxious about our health and financial well-being.
Everyone also shares these common worries: What will happen if I get sick and become incapacitated? Or worse, what will happen if I die? What will happen if my loved ones get sick or pass away?
The answers to all these questions depend on whether you and your loved ones have put in place necessary legal documents for protect yourself and your family in the event of incapacity or death. Creating these documents is a primary goal of estate planning.
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including wills, trusts, durable powers of attorney, and patient advocate designations. I continue to be available during this challenging time to assist with the essential documents that protect you and your loved ones. If I can help you in any way, please contact me by phone or email.
What Is Estate Planning?
Estate planning is the process of working with a knowledgeable attorney to determine your wishes in the event of incapacity or death. Then, your attorney helps you put in place the necessary documents to protect you and your family for both situations.
You should never use forms or a do-it-yourself (DIY) service for any estate planning documents. Doing so creates significant risks for you and your loved ones. The only way to create a proper, complete estate plan is to consult with an experienced estate planning attorney.
Essential Documents To Protect You and Your Family If You Become Incapacitated
Covid-19 poses the risk of illness and temporary (or even permanent) incapacity for everyone. Seniors and people with underlying health conditions are especially vulnerable.
Two documents that belong in every estate plan protect you and your family if you contract the coronavirus and become incapacitated. These documents safeguard you and your loved ones during your life. They are your patient advocate designation (also called a durable power of attorney for health care) and your durable power of attorney for property and financial matters.
If you do not have these documents in place, your family may need to ask a Michigan probate court to designate a guardian and conservator for you. Those proceedings take up precious time, can lead to family disagreements, and spend money unnecessarily.
Patient Advocate Designation / Durable Power of Attorney for Health Care
In your patient advocate designation, you authorize a trusted person to make medical decisions for you, if you are incapacitated temporarily or permanently and cannot make the decisions for yourself. You may also specify your wishes regarding medical treatment, including end-of-life care, in this document.
Durable Power of Attorney for Property and Financial Matters
Your "durable" power of attorney for property and financial matters is a document in which you appoint a trusted person to make property and financial decisions for you. You can specify in the document that the trusted person you appoint can make decisions on your behalf starting at the time you sign the document, or starting at the time you are no longer competent to make decisions as documented by licensed physicians.
If you want your agent to have authority to make these decisions, your power of attorney document must be durable. This is done by adding a clause to the document that makes it clear that you intend for this power of attorney to remain effective after your subsequent disability, incapacity, or by the lapse of time.
Crucial Documents That Protect Your Loved Ones If You Pass Away
If you do not have legal documents in place that determine what happens to your property when you pass away, Michigan law makes those decisions for you. In many cases, state statutes will not make the same distribution of your estate that you would. To avoid dying intestate (the term for dying without a will or estate plan), put these documents in place at the soonest possible time.
Last Will and Testament
Your Last Will and Testament — commonly referred to as your will — designates a personal representative to gather your assets at your death, pay your debts and estate expenses, and distribute your remaining assets to your chosen loved ones. If you have minor children, you should appoint whom you wish to serve as a guardian and conservator for them.
It is important to understand that having a will does not mean that you have an estate plan. A will is a basic estate planning document, but it is not the only document that is essential for a complete estate plan.
Instead of distributing your property directly to your beneficiaries in a will, some people choose to create a revocable living trust. The terms of a revocable trust generally provide that it becomes irrevocable on your death. The trustee then distributes the assets according to your specifications in the trust. This type of trust enables you to control how your assets and property are distributed to your beneficiaries.
A trust also avoids the costs of the probate court and keeps your estate plan and financial information private. In your trust document, you may appoint a trustee to administer your assets on your behalf during incapacity, and to manage the assets for the benefit of your chosen loved ones upon your death.
Beneficiary Designation for Your Financial Accounts and Life Insurance Policies
In addition to having a will or trust to protect your family if you pass away, you should make sure you have designated beneficiaries on all your financial accounts, including retirement and bank accounts and life insurance policies. You also should review your current beneficiary designations to ensure the persons named on the forms are the individuals whom you wish to receive the assets after your death.
Schedule a Consultation with an Experienced Ann Arbor Estate Planning Attorney
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including wills, trusts, durable powers of attorney, and patient advocate designations. From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a new estate plan or about updating your existing plan, call (734) 649-0784, send an email to firstname.lastname@example.org, or use the online contact form.