The coronavirus pandemic has created a state of fear and anxiety for millions of people, for obvious and expected reasons. Currently, the crisis has halted much of the economy, leaving those of us who aren’t directly dealing with the disease or on the front lines in the fight against it ample time to consider the ramifications and what’s to come.
As many of us hunker down in our homes, whether by governmental mandate or simply as a precaution to ourselves and others, we’re left thinking about the present situation and how it might affect us or our loved ones. No one wants to consider the worst, and although the COVID-19 death rate is less than 1.5% in the US at the time of this writing, the inevitable fact of the matter is that more Americans will die before this is over.
We all have our personal philosophical views on death and where, if anywhere, it will lead. One thing that we know for sure it will lead to is our loved ones being deeply emotionally affected. For those of us who have brothers, sisters, dependents, or relatives who could otherwise benefit from our assets once we’ve passed, most of us are happy to hand down that in which we no longer have any worldly interest.
What some of us might not know, however, is that passing our estate over to our loved ones is not as cut-and-dry as it may seem. Should a dispute rise out of a tragic situation, we won’t be there to mediate between our emotionally distraught beneficiaries, and we won’t be there to clarify our direct wishes to any attorneys. That’s why it’s imperative to devise an estate plan before we pass on, to ensure that our desires are fulfilled exactly as we intend them to be.
Despite the importance of having an estate plan, the number of people who have one is decreasing. A recent survey of 2,400 American adults found that 25% less people have a will or other type of estate plan today than three years ago. Amongst older adults, the number drops to 20% in just the past year, which is substantial given the increasing necessity of an estate plan as we age.
Although estate plans overall may have decreased in the past few years, the COVID-19 outbreak may shift this trend. Many estate attorneys are already seeing an uptick in calls regarding wills, trusts, and powers of attorney–three basic provisions in an estate plan.
A will is the most common, simplest, and most recommended document to have in an estate plan. Without it, your estate is left up to the probate courts, which is time-consuming, complex, and expensive. Laws for drafting and signing a will vary based on jurisdiction. In Colorado, a will must be signed by two witnesses and handwritten or typed; oral or nuncupative wills are not permitted.
A trust is like a will in that it involves transfer of assets, but it offers more control over them while the trustor is alive at the expense of being more costly than a will. A living revocable trust allows the trustor to maintain ownership of assets while they’re alive and transfer control of those assets to a third party of their choosing upon death. Trusts are often utilized as tools to pass assets along without probate court intervention.
Power of attorney involves written authorization for someone to act on your behalf after you die. In an estate plan, power of attorney can be given in either a financial or a medical capacity, allowing you (the grantor) to decide who makes decisions (the agent) in these areas upon your death. It’s important to note that the granted power of attorney should be durable, meaning the agent would be authorized to act on your behalf should you become incapacitated.
In living our day-to-day lives, those of us fortunate enough to be healthy may not feel the need to consider the consequences of our death to our loved ones. It’s not the most cheerful thought, after all. Nevertheless, if there’s anything to be learned from the current state of affairs in the world, it’s that a little precautionary action–even on an extreme scale–can prevent a lot of hardship down the line, even if we won’t be around to experience it. A properly drawn-out estate plan can give you peace of mind knowing that control of your estate is in your hands, or the hands of someone you trust.