Estate Planning and COVID-19: Four Must-Have Documents for Protection During a Crisis
- Written By Kim Borwick
Kim Borwick is a writer and editor who studies financial literacy and retirement annuities. She has extensive experience with editing educational content and financial topics for Annuity.org.Read More
- Published: April 10, 2020
- 7 min read time
- This page features 5 Cited Research Articles
Estate planning has quickly jumped to the forefront of many Americans’ minds as the fear of contracting COVID-19 has become reality for more than 450,000 families across the nation — and counting.
“The possibility of life interruptions, hospitalization, quarantine and possibly death has pushed some people that were thinking they could put it off a little more toward, ‘OK, let me be proactive about this,’” South Florida estate planning attorney Brett Halperin, Esq. told Annuity.org.
No matter your age and no matter your asset level, you should have your ancillary documents in place, according to Halperin of Halperin Law Group.
Ancillary documents give you the opportunity to authorize people to make medical and financial decisions on your behalf should you become incapacitated. Also called life documents, these estate planning documents are effective only while you are alive.
Halperin refers to “four documents that, regardless of how much you are worth, regardless of your age, you need them. It protects you from any interruptions that may take place caused by this virus or otherwise.”
He calls these documents “the big four.”
1. Power of Attorney
A power of attorney is a document in which you appoint someone to transact business on your behalf. Your power of attorney would, for example, have authority over your bank accounts, life insurance and health insurance and could bring a lawsuit on your behalf in addition to performing other acts.
“Anything that has to do with your financial well-being, you’re designating somebody to handle those things for you. Why is that important? Because obviously if you are quarantined for 14 days or have an extended hospital stay, you need someone to make sure your rent gets paid, your utilities get paid and your affairs are in order,” Halperin said.
“The power of attorney can make someone have the authority to do that for you. Otherwise these banks and these other companies, they have no authority to talk to somebody who is not you.”
2. Designation of Health Care Surrogate Form
The designation of health care surrogate form is essentially the health care version of the power of attorney. This document allows you to designate someone to make decisions regarding your health care in the event you can’t make those decisions for yourself. It waives your HIPAA protection, which gives that person the freedom to talk to your doctors and view your medical records.
“Any time you can’t make a decision for yourself — maybe the virus has really made you deteriorate so you can’t do that — this form would let your chosen person make those decisions on your behalf,” Halperin said. “That’s obviously a big one, too, with what could possibly happen with comas or ventilators. If you are under heavy sedation you cannot make medical decisions for yourself.”
3. Living Will
A living will specifies your end-of-life care preferences. It tells health care providers whether you want to use treatments such as breathing machines and feeding tubes to prolong your life.
You sign this document when you have capacity, which prevents you or your loved ones from having to make difficult decisions in the moment.
“You don’t want family to bear the burden of signing forms related to removing life support,” Halperin said. “Nobody wants to burden someone with that, so this document makes very clear what your position is.”
Having a living will is different from creating a will that expresses your wishes for how your property will be dispersed after your death. A last will and testament functions almost exclusively as instructions for the probate court. Probate is a court proceeding that moves a deceased person’s assets through the court system and ensures that they get to the right person.
4. Declaration of Preneed Guardian
A declaration of preneed guardian allows you to assign a legal guardian in the event a court determines you need one.
You choose someone to be the guardian of your person and someone to be the guardian of your property.
You can appoint the same person to be the guardian of both your person and your property, or you can designate two different people.
How to Get Started
Most estate planning attorneys will offer free consultations over the phone or via videoconferencing. During a consultation, the attorney will review your assets with you and explain your options.
If you have existing documents, the attorney will review them — no matter how old they are — and explain what would happen if you were to die today.
“A lot of times just having a phone call with an estate planning attorney to educate yourself on wills or the ancillary documents or your assets could save you thousands of dollars. It could save you years of headaches dealing with probate,” Halperin said. “My advice is just be proactive. Once you lose capacity or once you’re already in the hospital or once you pass away, it’s too late.”
Signings During the Coronavirus Outbreak
While most estate planning work, including creating, updating or finalizing your estate plan, can be done at home, your state’s execution requirements could be a major drawback of estate planning during the coronavirus pandemic.
Wills and ancillary documents are governed by state law, and the rules for the circumstances under which they need to be signed vary from state to state.
“Some states require two witnesses and a notary, other states perhaps only one witness,” Miami-based attorney Mildred Gomez told NPR. “Some states currently allow for online execution of these documents while other states don’t.”
Florida, for example, has some of the strictest requirements for signings given the elderly population of the state and the worry about undue influence.
“In Florida, you need to have all of these estate planning documents signed by the person and in the presence of two witnesses who are not related. People who are elderly or immunocompromised don’t want to go somewhere to be around strangers to sign documents, and they certainly don’t want them in their house or to go to someone else’s house or to an office to do that,” Halperin said. “That has been the biggest problem with what’s going on is that requirement is still in place.”
Some law firms are offering drive-up signings. Others are practicing social distancing, wearing gloves and masks, and using individual pens at signings. You may be able to sign documents without your attorney present, but depending on your state’s requirements, you may still need witnesses to sign with you in person.
A Push for Online Notarization
Your state may require that you have your documents notarized. Electronic notarization of certain documents is permitted in some states, generally under very strict guidelines.
But the COVID-19 pandemic is already prompting changes in some states, including Florida, which put out an administrative order relaxing the requirements.
States that do not currently allow the practice may consider permitting online notarization of documents temporarily during the global health crisis.
Massachusetts attorney Christine Fletcher wrote in Forbes that attorneys in her state plan to petition the governor to allow attorneys who are notaries to notarize documents and conduct signings online until business can resume as normal.
An attorney in your state will be able to inform you of your state’s requirements. Even if you are unable to have the documents notarized at this time, it is still a wise decision to get them prepped and ready to be signed.
“If this situation has shown us anything or taught us anything, it’s that none of us know what tomorrow is going to bring,” Gomez said. “But we know what today holds, so prepare your documents so that you’re comfortable with them today and you can sleep tonight. If circumstances change in the future, you can always update these documents. As long as you have capacity to do so, you just have to make those choices.”
Connect With a Financial Advisor Instantly
Our free tool can help you find an advisor who serves your needs. Get matched with a financial advisor who fits your unique criteria. Once you’ve been matched, consult for free with no obligation.
5 Cited Research Articles
Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.
- Fletcher, C. (2020, March 23). Eight Estate Planning Strategies In A COVID-19 World. Retrieved from: https://www.forbes.com/sites/christinefletcher/2020/03/23/eight-estate-planning-strategies-in-a-covid-19-world/
- Halperin, B. (2020, April 7). Telephone Interview with Annuity.org.
- Jargon, J. (2020, March 25). Estate Planning Goes Digital as Many Families Explore Options. Retrieved from https://www.wsj.com/articles/estate-planning-goes-digital-as-many-families-explore-options-11585128602?reflink=share_mobilewebshare&fbclid=IwAR20IY3nn2qVCUeBs9Tjt0sy4OIho7kMeiPuMIYcEahniKOJIHIzhYBMCnI
- Johns Hopkins University. (2020, April 9). Coronavirus COVID-19 Global Cases by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU). Retrieved from https://www.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6
- Simon, S. (2020, March 28). How To Make Your Estate Plan Amid The Coronavirus Pandemic. Retrieved from https://www.npr.org/2020/03/28/823071317/how-to-make-your-estate-plan-amid-the-coronavirus-pandemic