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Estate Planning During COVID – The Importance and What It Entails

Throughout 2020 and into 2021, 2.04 million Floridians have contracted COVID-19. Sadly, over 33,000 residents have died from the disease, while over 83,000 Floridians have required hospitalization for the virus.

Even if the first two numbers weren’t tragic enough, that last number alone should give all of us pause. While mere exposure to COVID means a 14-day self-quarantine, consider that, for the duration of the pandemic, being hospitalized for any reason means you could be immediately cut off from your family, friends, and others in your support-system, for the length of your care. You will be kept in isolation. You may be unable to give someone the keys to your home and ask them to bring your mail. You may be too sick or isolated to even get your financial and health care documents drafted and executed.

How do you pay your bills or deposit that check if you can’t access them? If you are seriously ill, how do you ensure you’re getting the best care if you’re too sick to advocate for yourself?

The answer is to have an estate plan in place before you get sick. Because estate planning isn’t just about distributing one’s assets to heirs — it is about protecting you and your family, now.

Estate Plan — The Essentials

COVID pandemic is a reminder that even a temporary illness can be disabling, and it can happen in an instant. Everyone — no matter how big or how small their estate — should have an estate plan that includes, at the very least, the following:

  • Durable Power of Attorney (Financial PoA): A document that, under specified conditions, gives someone temporary legal authority over your finances
  • Designation of Health Care Surrogate (Health Care PoA): A document that gives someone the ability to make decisions about your health care if you’re incapacitated
  • HIPAA Authorization: A document that waives legal restrictions so that specified people may have access to information relating to your health and medical care
  • Advance Care Directive (a.k.a. Living Will): A document that designates people to be responsible for end-of-life care decisions if you are not able to do so
  • Will: A legal document that specifies the allocation of your assets to heirs

As you look at this list, one thing should become clear: Estate planning is more than deciding who someday inherits your wealth. On the contrary, all but one of the above items are about your health care and your financial well-being.

The health care PoA and the Advance Directive are essential tools for you to control your care. Without these, the hospital may require a family member to make difficult decisions—that you would prefer someone else make. Or a hospital may even decide a patient must become a ward of the state, so a government official decides your course of treatment. And without the HIPAA release, doctors cannot update family members and other loved ones about your condition.

Meanwhile, a durable financial PoA means that someone else can manage your finances (e.g., pay bills and collect receivables) while you recover.

Estate Plan – Other Elements

Beyond the basics, other elements of an estate plan are equally important.

You may want to consider the creation of a revocable trust. A revocable trust can be adjusted as needed during your lifetime, but it can allocate assets in the event of death, while avoiding probate — a lengthy process where a court must oversee the distribution of your estate. Probate is a public, costly, prolonged process, and it’s become even worse during the pandemic. Courts are closed or have limited staffing and hours, creating a huge backlog of litigation.

You should also consider your life insurance policies, retirement plans, savings, and other investments. Without proper structuring, these, too, could end up in probate. You may also want to revisit who holds the title of any property you own, or who is considered a lessee for rental agreements.

Taking care of these ensures proper distribution to your heirs and may have important implications for future tax liability.

And as with the first list of items, these, too, can impact your well-being. For instance, the structure of asset ownership (e.g., who holds the title) can impact your eligibility for subsidized long-term health care and other benefits.

What Happens When Someone Dies Without a Will

If someone dies “intestate” (without a will), the estate must go to probate, where a court must divide their property according to statutory requirements. For example, Florida law requires that the entire estate be given to a surviving spouse, if the couple had children together. However, if the decedent has a spouse and children outside of their spousal relationship, then half of the estate goes to the spouse, and half goes to the children.

While the legally-prescribed distribution can already thwart someone’s plans for their heirs, once again, COVID makes a bad situation worse.

If COVID spreads through a family, some require long-term medical care. Perhaps the survivors are in good health, but they’re financially hurting, due to a pandemic layoff. Even worse, there are also reports of COVID-stricken husbands and wives passing away within days or weeks of each other. Tools the couple used to have property automatically transfer from one spouse to another can still leave families with no way to access their assets.

The survivors may not be able to afford the direct costs of probate, and they do not have the financial resources to get through the months it will take for probate to be completed.

Designating a Guardian for Minor Children

Another concern that an estate plan can address is the designation of a guardian for children. Florida law requires that a minor child (under the age of 18) have a legal guardian, and even temporary transfer of custody requires express parental authorization. Without it, a child could end up in the custody of the state’s Child Protective Services.

Normally, it might seem like no big deal simply to have a child spend a few nights with a family member or trusted friend while you were ill; however, relying on informal caregiving is not advisable during the pandemic. COVID can spread through a household, and that trusted caregiver would not legally be allowed to obtain medical care for your child, if your child fell ill.

Preparing an Estate Plan During COVID

Traditionally, estate planning has been done in person. However, the good news is that you can complete the entire process on a remote basis: You don’t need to leave the safety of your home. In fact, as of July 2020, Florida changed the rules so that even documents can be signed and notarized via teleconference.

Widerman Malek Attorneys

The pandemic is a daily reminder that we must take care of our loved ones and not take chances with our family’s well-being. Contact the estate planning attorneys at Widermark Malek today for a free consultation on how to prepare an estate plan for you and your family.

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