With COVID-19 raging through the nation, there has been a surge of interest in people completing their wills and estate planning. For frontline healthcare workers, the need to plan for a possible worst-case outcome for themselves and their families has become an immediate concern. Doctors are spending limited weekend time urgently completing the paperwork, so that their family is protected in case of the worst outcome. If a person were to pass away intestate (with no will or living trust), the legal system makes the decision on their behalf, which can be a long and expensive process.
Completing wills and estate planning is usually the last part of the personal finance process. During normal times, everyone plans to complete it, but many never quite get to it because it’s usually regarding far into the future. The headlines today, however, tell a different story. As the President has acknowledged, the best case scenario in this war is the loss of more than 200,000 lives, and under these unfortunate circumstances, wills and estate planning has taken center stage.
To help ease the stress, here is a simple breakdown of what exactly should be completed, and the quickest way to get it done.
#1: Get mentally prepared.
This may sound trivial but while some find this easy to do, others end up in tears — especially during this sensitive time — thinking about some of these decisions regarding their children and family, should they pass away. The best way to view this is that you are taking care of everything should something happen, with the hope that nothing will. The feeling after everything is in order will be priceless. This is also a good opportunity to express to a partner, family member, or confidante the stored up stress and fears that we all have when life-death is concerned..
#2: Complete a revocable estate trust in addition to a will.
This group of documents, usually prepared as a set, includes:
- A Living Trust: This document designates how to handle all of your assets (home, cars, and especially non-retirement accounts etc). For example, you may not want to give the proceeds of a high-value life insurance to a 16-year-old, or to their guardians, without safeguards and legal protections. This document ensures that not only are your assets secure from probate, but also that the money is delivered and spent in the way you intend it to be.
- A pour-over Will (Last Will and Testament): This document acts as a catch-all directing the courts on how to dispose of anything not handled above. Very importantly, it also designates who will be guardian to your children in case disaster occurs.
- Power of Attorney for Finances: This document designates who will make financial decisions for you if you are unable to.
- Power of Attorney for Healthcare decision and Advanced Health Directives: These documents designate who will make medical decisions for you, and carry out any specific medical requirements. For example, this can specifically state if you want to be kept alive in a vegetative state, and what steps can be taken in preservation of your life.
The additional benefits of having a full estate plan is that it will help you avoid the long and expensive probate (proving of the will) process, will keep all of your information private, and help you avoid estate taxes (gift, inheritance and death taxes). This process is especially important if you are married, have children and/or have a positive net-worth.
If you complete only the will and specify beneficiaries for the accounts, which many opt to do, it will only designate the guardians to your children but not a trustee for your assets, or timeline of how your assets should be distributed. Beneficiaries are paid out immediately or given full control at the time of your passing. What decisions should be made based on a will is the reason the probate process exists, so to count on a will to take care of things is often ensuring additional work for those left behind. A will is also available to the public with a small fee, upon your death, which can lead to a loss of privacy for your loved ones.
#3: Get an emergency binder ready:
You can use Google Docs or Excel to list all of your accounts, insurances, burial services information, obituary, and include the full estate or will paperwork in the binder. Remember that you need a physical copy of the will. It is not filed or submitted anywhere before your death. For account passwords, this is a great time to start using a password manager such as LastPass. You can also use pre-made questionnaire forms such as the Smart Money Mamas ICE binder PDF forms ($39) to fill-out and print. You can complete this before or after your estate planning.
How Can I Quickly Have The Estate Plan Done?
You can do it online or in-person; the paperwork timeframe is about the same since you will be answering the same questions through any format .
If you opt for the online version, you can use Trust&Will ($399 for trust; now offering free estate plans for healthcare workers) or LegalZoom ($329 for trust). Estate planning is state specific, and both of these websites will provide you with the correct forms for your state, and they have attorneys on board to answer your questions.
You will need to fill out the paperwork by answering questions such as:
- Which person do you trust is both willing and able to handle your living trust? (Your trustee should you and your spouse pass away).
- Who should receive your assets and what time frame would you like it distributed.
- Which person can make medical decisions for you.
- Which person can be the guardian to your children.
- Who should be the executor of your will.
Once you complete the forms, you can download or they will mail you two copies. You will need the appropriate parts notarized in-person or online at Notarize, and two disinterested (not related to you) witnesses will need to sign the appropriate parts of the paperwork. Keep each copy in a separate location, with one preferably in a safe deposit box. The turnaround time is dependent on how quickly you can answer the questions above. For some it takes about 15 minutes, for others it takes a couple of days to think over.
If you want to save a little more and do-it-yourself, you can buy the Nolo Quicken WillMaker and Trust ($90) software. This is perfectly fine to do, but just keep in mind, you won’t have a lawyer on board to answer any questions.
Call a few estate planning attorneys in your area and ask their process and pricing (pricing ranges from $800–3000). The attorney will ask you similar questions as above, explain each question and will guide you to which documents you should complete depending on your circumstance (there are some exceptions where people only need to do the will or an irrevocable trust), and your specific state laws. And it’s always helpful to have an attorney available to answer your questions and help you set up the timeframe of how your assets should be distributed. For example, an attorney may recommend having your assets divided into thirds, where your children will receive ⅓ of assets at age 25, ⅓ at 30 and the rest at 35, while providing for college and graduate tuitions. Once the questions are answered via phone/video, they will meet you to explain all of the documents, notarize it as needed, and provide you with two copies.
Afterwards, you may need to update some bank accounts, deed of any property, insurance etc. to the name of your trust. The “name of the trust” is usually something boring like your last names+the word trust+date, such as “The Joan and John Smith Trust April 10th, 2020.” Going forward, everything should be named to your trust as specified, and you can always change it and update it as needed since it is revocable. The trust will become irrevocable at death.
Keep in mind, wills and estate planning are state specific and if you relocate to another state, you will need to have your documents updated to meet that state’s requirements.
Stay safe and healthy everyone!