Estate planning documents.
An unimaginable number of people are still dying from Covid complications, while others are dealing with life-threatening illnesses such as cancer, heart attacks and strokes. When it is your spouse who is ill, the pain is intensified by the anticipated loss of your life partner. It is heartbreaking.
Planning for the death of a spouse is difficult and painful. It involves conversations that we don’t want to have. How does your loved one want to be remembered? What kind of funeral and obituary do they want? We try to avoid these conversations until the last possible moment. It is often the attending physician who suggests that your spouse get his affairs in order. That inevitably precipitates calls to your advisors – lawyers, financial advisors and insurance agents.
Your spouse’s current prognosis and whether he is at home or in a hospital will determine whether updates can be made to your estate plan. If it has been a few years since you and your spouse last updated your estate plan, you may need to refresh your memory as to what the documents contain. You should review the planning with your advisors to make sure you understand it and to find out if there are any changes that can and should be made. Here are five issues you should focus your attention on:
• Fiduciary Review – Look at who is named in your estate planning documents to serve in legal capacities such as the executor and trustee of your spouse’s estate. Those people will have important roles after your spouse passes and you want to make sure you remain comfortable with the selected fiduciaries and they are still the right people for the job. If there is a trustee, will you be able to remove that person if you need to in the future, but reassessing that person now will make things easier later on. If your spouse has been sick, you likely have already reviewed your spouse’s health care proxy and power of attorney, but if not, look at who is named in those documents too.
• Asset Analysis – What will happen to your assets when your partner dies? Review an updated list of all your assets. Are there assets that are held jointly which will automatically pass to you on your spouse’s death or are there assets in your spouse’s name alone? Have any of the assets been transferred to a trust? The answers to these pivotal questions will determine how easily you can access the assets after your spouse’s passing.
• Trust Assessment – Any assets that are currently in the trust or will pass into the trust on death will be controlled by the trust document. Look at who the beneficiaries are, how distributions can be made, and who will control the assets.
• Prepare for Probate – If there are assets in your spouse’s name, those assets will pass according to his will. Review the will to make sure you understand it and if probate, which is more complicated, will be required to administer the estate.
• Determine Beneficiary Designations – Check to make sure that beneficiaries of retirement accounts and life insurance policies are current and up-to-date.
If changes need to be made, your lawyer can advise how best to accomplish that. Some documents may just require a signature, while others may require a notary. I recently had a client update a trust which he was able to sign at home with a family friend who was a notary. Other changes, however, may be more difficult. Depending on your state’s law, you may need two witnesses – who are not family members – and a notary in order to update a will.
Covid has made deathbed updates all the more difficult. It used to be that lawyers routinely visited hospitals bringing along secretaries to act as witnesses so that a client could update their will. That is currently not possible. However, some states do allow for virtual notarization where you sign your documents in front of witnesses and a notary while you are all on a video conference such as Zoom. You will need to check with your lawyer to see if that is possible as there are often strict requirements that need to be adhered to.
Finally, know that deathbed updates to an estate plan can and often are challenged. To make any updates, your spouse must be competent to act and be acting of his own volition, meaning you are not pressuring him to make these changes. If your spouse is cutting out beneficiaries at the last minute (such as children from a prior marriage), be prepared for a legal challenge after his death.