As the COVID-19 pandemic continues to wreak havoc on our country (and the world), having a solid estate plan in place is more important than ever. It may have taken a crisis for you to realize how ill-prepared you are—but this crisis may also propel you into taking a really important action: preparing your estate plan. Now this is the time for you to get all of your assets in order, and keep your family safe, prepared and—most importantly—protected!
Here are 10 estate planning topics to think about during the COVID-19 crisis:
1. Make sure you have a durable power of attorney. The power of attorney is a legal document that allows someone else to make financial or business decisions for you in the event you become incapable of doing so. This is a must-have in your estate plan—especially during a time of crisis where your physical health could deteriorate rapidly, and without notice!
2. Continue to fund your Roth IRA and 401K accounts. If you can, contribute the max while the market is down, as you can still fund for 2019 and 2020. You can personally decide how conservative or aggressive to be in your investments. Discuss all financial plans with your advisor before making changes. Your advisor will know how to best manage your investments so your financial goals are reached.
3. Keep an emergency savings to cover 6-months of expenses. It’s a good idea to have an emergency fund that could cover at least 6-months worth of living expenses, in case you lose your job or the ability to work. This pandemic is exactly the reason why you should be saving!
4. Make sure your health insurance policies are stored somewhere accessible in the event your family members need access. During COVID-19 outbreak, your health insurance provider should cover all testing, and any visits relating to COVID-19.
5. Have a safe place to store your digital passwords in order to access your digital assets. We all have banking account logins, online accounts, and financial matters stored online. Make sure that information is kept safely with a trusted family member or with your estate planning attorney.
6. Meet (virtually) with your family to have an in-depth conversation about how the future will be handled. This includes assets, wills & trusts, and power of attorney. It is a good idea to keep your children in the loop.
7. Have a contingent beneficiary. Make sure you have a back-up plan. Who would your estate and assets be passed along to if something happens to your primary beneficiary? Having a plan B (and even a plan C) in place is important during these uncertain times.
8. Have an emergency plan. Have a backup plan in the event that power or communication systems—like telephones—go down. Where will your family go? What will everyone do, and where should you meet?
9. Put your assets into trusts. Either place them into existing trusts, or fund a new trust so it’s safe until the time comes when a family member need to access it. Your estate planing attorney can help you through the process of establishing and funding trusts, as needed.
10. Make an annual gift of $15K. You can make an annual tax-free gift of about $15,000 that does not count against lifetime gift tax exclusion. With valuation so low right now, it can offer some extra mileage as valuations go up in the future. Speak with your financial advisor about this before making any decisions. Your advisor will be able to guide you through the best way to take advantage of this opportunity based on your unique financial situation.
Estate planning is important for everyone, during any time of the year. During times of crisis, however, it’s especially important to check on the plans you have in place for your assets, your family members, and your loved ones. The estate planning attorneys at Deliberato Law Center are highly qualified to support you through any and all estate planning services. Contact us today to learn more about how we can help protect you and your family from the uncertainties of the future.