The COVID-19 crisis reminds us how vulnerable we are and highlights how important it is for each of us to put a well-conceived, up-to-date estate plan in place.
An estate plan ensures our assets are properly distributed to family and intended beneficiaries at minimal cost and in a manner best calculated to enhance their lives. However, many of us avoid or delay the process of putting such a plan in place. The COVID-19 pandemic is especially not the time to procrastinate on planning.
We see the old “money is the root of all evil” adage come to life in our practice too often—particularly when wealth is distributed to the wrong beneficiary or in the wrong way. Our clients spend their lives building wealth, and estate planning is aimed at preserving it. The process involves clearly identifying who the client wishes to benefit and how, whether in trust, outright, or in a different way. It is geared toward protecting assets from waste, estate and income taxes, needless administration costs, litigation costs over disputes that could easily have been avoided, and long-term care costs or other liabilities.
In the absence of an estate plan, the state where an individual resides has a default plan for distributing assets as well as for determining who will manage and invest those assets and make health care decisions if the individual is unable to do so. Rare is the circumstance where we have prepared an estate plan (e.g., a will, power of attorney, health directive, or other document) that matches the state default plan. Almost all of our clients want to choose for themselves how assets are handled and distributed, by whom, and who will make health care decisions for them.
Estate planning involves a detailed review of assets and income, family structure, and client objectives. We work collaboratively with clients and their financial advisors and accountants to structure a plan that best meets their unique needs.
If estate planning is not put in place and a crisis occurs (e.g., illness, disability, or death), we still have planning opportunities available. However, the best and most effective planning is done when a clients are not in crisis, when they can provide us with the information needed, and when they have the time to truly reflect on their wishes and objectives. In addition, many of the tax, asset protection, and asset preservation strategies that can save significant wealth are only available well before any crisis occurs.
Effective estate planning works best when there is a strong relationship between the client, their estate planning attorney, and other key advisors. The first step is building the estate planning base, including structuring assets to conform to the plan and executing estate planning documents. After, the plan should be reviewed and updated every three to five years or whenever there is a change in finances, health or family circumstances, or laws of tax, trusts, estates, elder care, business, or other laws impacting the plan.
If you don’t have an up-to-date estate plan in place, don’t delay! It’s never too late to start the planning process or to update your plan. Barclay Damon’s trusts and estates attorneys can work with you now without having to meet in person, as discussed in our previous “Even Though We Can't Meet in Person, We Can Put Estate Planning Documents in Place for You Immediately” alert. Contact us to discuss your estate planning.
If you have any questions regarding the content of this alert, please contact Karen Schaefer, Trusts & Estates Practice Area co-chair, at kschaefer@barclaydamon.com; David Luzon, partner, at dluzon@barclaydamon.com; or another member of the firm’s Trusts & Estates Practice Area.
We also have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. You can reach our COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.