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July 14, 2021

Six Estate Planning Steps to Take In These Covid Times

Susan Thau and Martin Shenkman

The PDF in which this article appears can be dowloaded here: Bifocal Vol. 42 Issue 6.

Partially reprinted with permission from the ABA Section of Real Property Trusts and Estates Law. 

Covid has created health worries and fear for everyone.  With mortality on many people’s minds, estate planning attorneys have been busier than ever.  Clients who put off finalizing or revising their wills or revocable trusts for months or even years have suddenly felt a new urgency to put their legal affairs in order.  The urgency some clients feel, the practical difficulties of practicing and signing documents during a pandemic, and the health effects on clients who have experienced Covid-19, have created a challenging legal environment.  The potential for significant adverse tax changes have further complicated the estate planning environment.

The pandemic has brought to light issues that have long been important but perhaps overlooked in estate planning practices (and society at large).  Those planners whose clients have struggled with various forms of brain disease understand the unique challenges in representing clients during times of medical crisis.

What follows is a discussion of the practical legal steps that estate planning attorneys might consider now as they are tasked with preparing wills and other estate planning documents during the pandemic.  This article will then discuss particular planning ideas tailored to individuals living with particular brain diseases, including long-haul Covid and Alzheimer’s. This discussion of steps will be basic for estate planning attorneys, but even so may provide a useful framework to explain the process to clients.

Individuals living with pre-existing health conditions should pursue estate planning with some urgency. Even otherwise healthy individuals who have never had reason to question their mortality may be among the last to receive a vaccination and may feel increased urgency to finalize their legal and financial affairs in case they unexpectedly succumb to Covid, or fall seriously ill for an extended period of time.  The discussion that follows should aid planners in creating documents that stand the test of time and are tailored to the particular medical crises that may or may not impact your client’s health.

Review Existing Legal Documents

Step 1. Review or Create Will and Revocable Trust

It is imperative that attorneys urge all clients to evaluate their wills and revocable trusts, and other planning. Clients should evaluate the executor, trustee, and guardian designations contained in these documents.  What if the client signed the documents many years ago and had a serious falling out with the persons named in these positions?  What if the client has since had children and there is no guardian designation in the Will or no separate standby guardian document in case the clients are incapacitated but not dead? Perhaps because of other changes in circumstances, e.g. developments in the clients business, a different structure might be advisable.

One issue that has arisen throughout the Covid crisis is physical dislocation.  Many young people have returned to their childhood homes in other states, or families with young children have left metropolitan areas in order to acquire more space during lockdown.  For example, while a client permanently resides in New Jersey, he or she may have temporarily relocated to South Carolina to stay with family.  This can raise planning complications.  Will the New Jersey (home state) documents be valid?  Ideally, you should advise your client to consult with an attorney in his or her temporary jurisdiction to ensure that the documents will still suffice if the client unexpectedly dies there.  Also consider having local counsel prepare a health care proxy, living will, and financial power of attorney (discussed in greater detail below) in accordance with the laws of the temporary homestead in case the client becomes disabled or sick while there.

Many clients are understandably reluctant to sign their estate planning documents in person, and many law firms have not reopened to allow them to do so.  Several states, including New York, are allowing certain estate planning documents to be executed remotely during this crisis. There may be other options as well. For example, some states, e.g. New Jersey recognize holographic wills. So, in some instances a viable alternative may be for the client to execute a pour over holographic will and a revocable trust which may not require witnesses or notaries (e.g., Alaska). If a client needs to execute an a revised will or revocable trust, it may be feasible to be done safely and effectively without in-person contact.

Step 2. Review or Create Financial Power of Attorney

Practitioners should review any power of attorney the client previously executed with consideration to the typical update considerations, as well as several that might be relevant because of Covid and the changing environment. Consider the agent designations and date of execution.  Are the designated agent or agents still people that the client can rely on? Do the name agents have sufficient cognitive capabilities? Do they have the special skills to address particular issues affecting the client? Is the document itself so old (stale) that banks or others might be concerned about its validity? 

The current unique and difficult coronavirus experience has also brought new concerns to bear. 

Many powers of attorney are “springing” powers that become effective only when the principal becomes incapacitated and cannot manage his or her affairs. However, being unable to leave your house for fear of exposure does not render you incapacitated such that your power of attorney has “sprung.” The mechanism that typically “springs” the springing power of attorney into effect is a signed indication of disability from two physicians/ In an environment where lockdowns, quarantines, travel restrictions, etc. are common, is that even feasible? If the principal is ill, comorbidity considerations may make unwarranted trips to physicians a danger. In this situation, a plain, durable power of attorney may be preferable

The pandemic has accelerated the use of, and acceptance of, electronic communications. as a result of that, and the dangers and challenges of in person meetings, practitioners might consider permitting the agent to communicate decisions via email, electronically signed documents, and perhaps even via Skype, FaceTime, and similar services. Banks or other providers are not all likely to accept this, but it might nonetheless be worth considering. You might also hold  third parties harmless (i.e., have the legal document indemnify them) for relying on such electronic communications to encourage them to be more accepting of electronic communication of decisions.

Normally some practitioners recommend that the agent be given broad powers to manage the client’s affairs.  Query whether in this current environment you might give the agent limited powers to navigate the Covid crisis, and then have the client re-execute a broader document when the pandemic abates. 

Step 3: Review or Create a Living Will

Confirm that the client, if he or she wishes, in fact has a living will, and, if so, that it is up to date and reflects the client’s wishes.

Some living will and other health care documents expressly prohibit intubation, which could be a tragic mistake in the current environment in which intubation may be necessary to survive the Coronavirus. Review your client’s health care documents and confirm that they distinguish between preventing intubation when the client is in a persistent vegetative state from those temporary situations, like Covid, when intubation might be desired.  You don’t want your client barred from receiving the potentially lifesaving care he or she may need. 

Step 4: Review or Create a Health Care Proxy and HIPAA Release

As with the other documents mentioned, make sure the proxy designations are up to date and the people named are able and willing to assist.  Consider expressly authorizing electronic communication of decisions. With coronavirus being so contagious your client’s agents are less likely than pre-pandemic to physically meet with care providers.

A HIPAA release authorizes a named agent to access your private health information and communicate with medical providers, but not make medical decisions. The considerations for this document are similar to those for the health care proxy.

Step 5: Review or Create a Disposition of Remains Document

Several states, including New York, have a specific form that allows the client to designate an agent to handle burial or cremation arrangements.  The client can also indicate special wishes on this form.  Ecologically friendly burial techniques, so-called “green burial” providers, are becoming increasingly common, with an emphasis on biodegradable materials like containers, caskets, shrouds, and urns and cemeteries that have discontinued the use of herbicides, pesticides, and fertilizers.  There are even services that will collect the decedent’s ashes and pot them in a manner reflecting the client’s wishes.  Such particular wishes would best be expressed clearly on a disposition of remains form.

Step 6:  Create or Update Legal Document Repository

Ensure that you, your client, and key client fiduciaries, have all of their documents stored in a reasonable manner. For example, some attorneys maintain a repository of client original estate planning documents in their offices or bank vaults. If the client retains the originals confirm that the original will is in a safe, secure, and fireproof location.  Encourage clients to give the names and contact information of counsel and other key advisers to loved ones so that in case of unexpected death the client’s family can contact the members of the team.  Suggest to clients not to store documents in the same place that they store passwords as those should not be given to professional advisers.  Nor should the client ever place an original will in a safety deposit box as this will significantly complicate the administration, requiring a special court order just to open the box to retrieve the original will.

Not only should counsel’s files (whether physical, and/or electronic) contain the documents discussed above, but it may be useful to also have copies of client’s beneficiary designations for retirement accounts and insurance policies, deeds for properties owned, a recent summary of assets and liabilities, and contact information for fiduciaries named in the will or revocable trust.

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