Estate Planning During the Coronavirus Pandemic
I do not want to sound the alarm, but the recent spread of the novel coronavirus has made estate planning all the more important, especially during the pandemic declared by the AWHO.
Time will tell whether it will get worse and who is most affected, but the ease with which the coronavirus spreads and its potential mortality rate are something to consider when you are over 65.
This is not medical advice, but common sense for caring for and protecting elderly relatives who want to leave behind a stable future for their beneficiaries.
Details from the CDC
The mortality rate is hard to determine because it’s still so early in the course of the virus’ spread, but seems to be between 2-3% of those infected.
However, in places like Italy, the shrinkage rate and spread among Europeans is 13 times higher than in China, where the outbreak began and the first case was diagnosed.
The mortality rate seems to increase with age – and children seem to be the least vulnerable. Most people who die from the coronavirus are over 60 years old and already suffer from chronic diseases such as heart disease and diabetes. In these people, the probability of dying from it is 5 to 10% higher.
Unlike other modern viruses (SARS etc.), this virus seems to spread very easily, for example through the air and through surfaces that can harbour the virus for hours, in some cases even days. It is reported that a simple sneeze has a radius of 10 feet, in which the infection could potentially spread to other people in your environment.
Of course, you won’t get much reliable information about the corona virus online, but instead contact the Center for Disease Control (CDC) for the latest information.
Here is why this global pandemic is dangerous.
We are always in danger of becoming unable to work or dying – even without the coronavirus pandemic. It is unlikely, but possible, to be hit by a bus, to get infected with E. coli, to be bitten by a snake, or to be trapped inside a building when it collapses.
However, in addition to daily threats to our existence, a global pandemic like this also threatens our ability to work, the stock market, how we are spending time with loved ones, the economy, and our sense of “normalcy.”
WHO Stats for comparison
Did you know that the World Health Organization estimates that 290,000 to 650,000 people die from influenza every year?
About 1.25 million people die each year in car accidents, averaging 3,287 deaths per day. In the United States alone, an estimated 37,000 people die in car accidents each year.
These figures make it clear that we are always at risk of being unable to work or dying. But the risk becomes especially great in times like these, when a globally communicable disease receives enough media attention to create chaos and frenzy around basic daily tasks, like going to the grocery store.
In other words, nationally publicizing our collective fear is going to make things more difficult, and stressful. Ultimately this kind of chaos will lead to more drastic measures (ie, $1.5 trillion capital injection from the federal government to help stabilize the economy).
Some economists believe this could lead to the next great depression.
In times like these, estate planning becomes a big priority.
Estate Planning During the Coronavirus Pandemic
Similar to stocking piling imperishable foods, or canned goods – estate planning is a preventative measure.
It is always good to look at things from the perspective of if/then scenarios. In other words, it is a good idea to look at things from a “what if you died tomorrow” perspective.
Some may consider this a paranoid perspective, but the truth is, elderly people are dying from this new virus and we don’t know how widespread or damaging this will be in the long run.
Preparing for the Worst
In the United States, the stockpiling of food and medicine is already common practice during a pandemic.
If you go to a local Publix in Florida, you will probably find that there is no longer any toilet paper, sanitizer, or bottled water available. You will probably receive notices from your manager, the HOA of your subdivision, or the local chamber of commerce asking you to stay home to avoid contraction and spread of the virus.
You may get emails from your favorite local restaurants telling you how they are altering sanitation standards to lower the risk of spreading the virus at the establishment.
Finally, your children may be told to stay home from school and town hall meetings, concerts, seminars, and other public events might be cancelled.
But what can you do from a legal perspective to protect yourself?
These are some other things you want to think about here:
- Do you have a life insurance policy?
- How much liquid cash is in your estate, and what kind of estate tax will your heirs be expected to pay?
- Do you have creditors looking for you? Or any outstanding debts?
- First of all you should check your will.
- Does your revocable trust meet your requirements?
- Have you determined who is going to get power of attorney over you if you are stricken with the virus?
- Are all your named beneficiaries still alive? Do they have children or dependents you would like to include?
In your revocable Living Trust, are your assets set to be moved into your trust?
Most of your assets should be set to be transferred to your trust to avoid direct inheritance on your death. Direct inheritance could get messy if there is any feuding between your children, exes, and other dependents.
With a revocable living trust your assets will go through probate when you die, and then they’ll be given out according to the legal stipulations of your estate.
Who will assume power of attorney over you if you become incapacitated?
Filing these documents is very important in the event of your incapacitation, especially during a global pandemic. The documents should be drawn up by a good lawyer, and notarized. They definitely should not be downloaded from the Internet. Internet template documents may not be upheld in court, if they have even the slightest error in wording or grammar.
Nomination of Beneficiaries:
Now would be the time to check the beneficiary names of your IRA/401k/pension and life insurance policies to ensure that you have named the proper beneficiaries at your death.
Make sure nothing has changed, and you have if/then scenarios worked out in case multiple members of your family become ill simultaneously. With an unpredictable and uncontainable virus like this, you can never be too careful.
Preparing Your Estate for the Coronavirus
Realistically, the best time to prepare for illness was years ago.
However, the second best time is now. If you need legal help with your estate plan, we offer next day virtual consultations via phone or email.
No lawyer is going to want to put their self, their own family, or staff at risk by exposing someone to a coronavirus patient.
However, that doesn’t mean you’ll struggle to get all the necessary help you need.
If you contract the coronavirus without proper preparation, there’s still a chance to take care of your estate planning while in isolation/quarantine. Just don’t wait until you’re weak and incapacitated to handle the important paperwork, such as power of attorney designation.
Only time will tell if the coronavirus will worsen and spread.
Currently, Its affecting almost every corner of the world.
There are no cures or vaccinations for it, and there’s no place to hide. We don’t exactly know where it began, and there’s no end in sight. Good news is, it seems to be less aggressive in warmer climates. According to SilverstoneLawFL.com, this means that some US residents have more time on their side to contact a probate lawyer in say Florida, California, etc.
A Final Note
The coronavirus is affecting older people, and populations with the highest average age of its citizens. But that doesn’t help anyone sleep at night, especially when most of the world’s wealth is in the hands of senior citizens.
Remember, if you get sick, you may forget to seek legal counsel until it’s too late.
You might also find it difficult to meet with an attorney, as you would be exposing others to the virus.
Best case scenario, you outlive the virus and your relatives are taken care of when you finally do take your last breath.