Estate Planning During the COVID-19 Pandemic

by Glenn DiBenedetto | May 4, 2020

The coronavirus pandemic has caused most of us to reflect on our personal health, financial wellbeing, our families and loved ones and our own mortality. We are constantly faced with illness, death, economic turmoil and unmatched uncertainty amid stay-at-home orders and social distancing. These thoughts and realities are the motivation for estate planning.

Basic estate planning documents generally include a will, living trust, durable power of attorney and health care proxy. These documents can help avoid having a probate court or another court determine how your assets are distributed or who can handle your financial and other affairs if you are unable. In the COVID-19 environment, there are more options available to have these documents prepared and, in some states, notarized online rather than in person.

If you already have estate planning documents, it would be wise to review and update them as needed. Check that your beneficiaries are listed as you currently intend; specifically, on wills and trusts, including also on IRAs, 401ks, other retirement plans and life insurance policies. Ensure that certain assets such as residences, other properties and investments are properly titled. This is especially important if you have a revocable or living trust. Make sure your estate planning documents have been updated to reflect the state of your legal domicile. This is critical to ensure your wishes are valid and enforceable after your passing. Note, a legal residence is not necessarily the same as legal domicile.

The sudden economic downturn brought on by the virus has decreased the value of many investments and other assets including closely-held businesses. These depressed values, along with lower interest rates and additional estate and gift tax exemptions, present numerous estate planning opportunities for people with more complex estates. The CARES Act and related government spending are likely to result in higher income and estate taxes in the near future.

It is an appropriate time to consider succession planning for business interests, wealth transfers of investment and other assets that are likely to appreciate in the future outside of your estate. Establishing a grantor-retained annuity trust and other trusts, capital gains or loss harvesting, Roth IRA conversions and other income acceleration possibilities should be reviewed. Attention to our personal estate may help alleviate some of the uncertainty our families are currently experiencing.

We suggest you consult with your estate planning attorney on these matters. Our office would be happy to participate in these conversations with you and your attorney. If you do not have an attorney, we’d be glad to recommend a few contacts we work within the industry. As always, our talented team of professionals are available to help assist with these matters or any other financial needs that may arise.