Few personal-finance to-dos are more vexing than estate planning. But in this pandemic crisis, no other issue is more important.
I recommend a consultation with a qualified estate attorney, but if the choice is an online service or nothing, use the online service. I spoke to New York estate attorney Juliet P. Kalib, of Kalib & Kalib, who explained the documents that you will need.
Will: A legal instrument that ensures that assets are passed to designated beneficiaries, in accordance with your wishes. In the drafting process, you name an executor — the person or institution that oversees the distribution of your assets. If you have minor children, you need to name a guardian for them.
Letter of instruction/appointment of agent to control disposition of remains: Kalib notes: “In some states, there is a form to complete (with witnesses), while in others, a letter of instruction may contain appointment of someone who will ensure your wishes are met.” This is especially important if you are choosing a method that is contrary to your family’s tradition.
Power of attorney: Appointment of someone to act as your agent in a variety of circumstances, including withdrawing money from a bank, responding to a tax inquiry or making a trade, if you are unable to do so yourself.
Health care proxy: Appointment of someone to make health care decisions on your behalf if you lose the ability to do so. This document may also contain a “living will” or “advanced directive” in which you can contemplate a variety of health circumstances and instruct your proxy to act in accordance with your wishes. “This can be helpful,” says Kalib, “especially if you think that your proxy may find it difficult to execute difficult decisions without specific guidance.” Amid the pandemic, many are taping their health care proxies to the inside of their front doors to make sure any emergency service knows to contact your agent in the event of an emergency medical situation.
Appointment of standby guardian: This document allows for a guardian to step in when a parent is sick or dies suddenly. It can be important, especially if there is no other parent or legal guardian.
Trusts: Revocable (changeable) or irrevocable (not-changeable) trusts may be useful, depending on family and tax situations. Trusts for minors can “allow delaying payments to children past the age of majority,” Kalib notes, which may be important in the event of a sudden death. For 2020, the first $11.58 million of an estate is exempt from federal estate taxes. If an estate is above the threshold (or twice that for married couples), you may want to consider a trust.
In the lockdown environment, I asked Kalib about how documents can be executed. While some states “allow signings via video conferencing (Zoom, Facetime), specific protocols must be followed,” she said. Clients must have the printed documents; attorneys, witnesses and notaries must participate in the conference and must be able to see the client sign the documents, and clients must then scan signature pages to the attorney.
After doing the hard work, you need to communicate with your executor and agents and review the information so that you can answer any questions they may have while you are healthy. You can provide them with copies of documents, or tell them where everything is stored.
Jill Schlesinger, CFP, is a CBS News business analyst. She welcomes comments and questions at firstname.lastname@example.org.
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