Evaluating Your Estate Plan During COVID-19
Maryland’s coronavirus hospitalizations are declining and the state is undergoing Phase 2 of reopening. Washington, DC has entered Phase 1 of reopening, but the confirmed cases in the nation’s capital has risen to more than 9,100, with 475 deaths. Although some people are returning to work, many are still without jobs, and the pandemic continues to burden the economy, creating uncertainty for people of all ages.
Now is the ideal time to review your estate plan to be sure it still reflects your wishes. There may be tax reduction opportunities available to help you pass more of your wealth to your heirs. During times of financial hardship, it’s often wise to evaluate documents such as:
- Financial Powers of Attorney
- Powers of Attorney for Healthcare
- The designation of beneficiaries
If you don’t have an estate plan, there’s no better time to create one with the help of an experienced estate planning attorney. Clifford M. Cohen of The Law Offices of Clifford M. Cohen can help you prepare an estate plan during COVID-19.
What are the Key Elements of an Effective Estate Plan?
A Revocable Living Trust. A Revocable Living Trust is an important tool. You may hold your assets in a Revocable Living Trust during your life or assign them after death, which allows you to directly manage and distribute your assets. The power to manage your property is critical for anyone suffering a disability or illness. Revocable Living Trusts also help individuals avoid a costly and time-consuming legal guardianship proceeding if they become mentally incapacitated.
If you fund a Revocable Living Trust fully during your lifetime or designate beneficiaries to fund the trust immediately upon your death, you may also avoid probate. Probate is the legal process by which a will is “proved” in a court of law and accepted as a valid public document that is the deceased’s true last testament. This process ensures that property and possessions are given to the proper heirs and that any taxes or debt owed by the deceased are paid in full. Items placed in a Revocable Living Trust are owned by the trust rather than the person who passed away, so these items do not go through probate court.
A Will. Your Will is a legal document that puts your wishes in writing regarding the distribution of your assets and the care of any minor children. If you die without a Will, your wishes may not be carried out as you had hoped, and your heirs may be forced to spend additional time and money to settle your affairs. In a Will, you may appoint a person to pay your bills and distribute your remaining assets after you die. Your Will also ensures any assets that did go through probate are transferred to your Revocable Living Trust.
A Financial Power of Attorney. A Financial Power of Attorney allows you to appoint someone you trust to handle your financial matters if you’re unable to do so. The person you appoint will be responsible for filing your tax returns, paying your bills, and making other important financial decisions on your behalf. Your Agent can legally manage your finances and property, and make all financial decisions allowed by the scope of the Power of Attorney.
A Healthcare Power of Attorney. A Healthcare Power of Attorney is another crucial element of your estate plan. With a Healthcare Power of Attorney, you may appoint a person to make decisions for you regarding your healthcare when you can no longer make them yourself. You may also express your wishes pertaining to life support if you become terminally ill or are in a persistent vegetative state.
How Often Should I Review My Estate Plan?
Generally, you’re encouraged to review your estate plan every three years as economic and familial matters change, or as soon as a big life event takes place — such as a divorce or remarriage. In light of COVID-19, if you haven’t reviewed your estate plan for a while, now may be the best time to revise it with an attorney.
An Estate Planning Lawyer You Can Trust in DC and Maryland
Estate Planning Attorney Clifford M. Cohen has served residents of Washington, DC and Maryland for more than 35 years. If you seek guidance regarding your estate plan or wish to craft an estate plan that will fit your and your family’s needs, call 202) 895-2799 for a free consultation or complete our online contact form.