Getting The Estate in Order

Covid-19 has changed life forever in more ways than we can count. It has also changed end-of-life estate planning and estate modification. It can be very difficult having that conversation with a spouse who’s dying.

Estate planning conversations are often put off because they are a reminder of the inevitable for every mortal on the planet. But when one spouse is dying, the other spouse often realizes that estate issues need to be addressed before death occurs. What should you do?

Review estate plans currently in place

You may have forgotten some of the details of the current estate plan. Read through the documents and refresh your memory so you know exactly what needs to be done. You may want to review the current plan with your advisors and get their input on whether changes need to be made and, if so, what those changes are.

Fiduciary Review

  • Who is named in the documents to serve as executor or trustee of your spouse’s estate? Are they still the right people for the job?
  • If there is a trustee, do you have the legal right to remove that person in the future if you can’t work with them or you think they’re not doing the job?
  • Does your spouse have a healthcare proxy and/or healthcare power of attorney? If so, who is named to handle medical decisions if your spouse becomes incapable of making those decisions before death? If it’s not you, do you believe that person is right to handle the job?

Asset Review

What happens to the assets when your spouse dies?

  • How are they titled? Are they all in joint name and will they pass directly to you?
  • Are some assets in your spouse’s name alone? If so, do you get those assets or will they go to someone else? Are there instructions in a will or trust that dictate who gets the assets?
  • Have any assets been moved into a trust? What does the trust say about how you can use those assets after your spouse is gone—income only, principal and income, however you choose?

A Need for Probate

If some assets are registered in your spouse’s name alone, there is a possibility those assets will have to go through probate. If probate is required, make sure you understand what that means as it relates to your spouse’s estate.

Beneficiary Review

There are several types of accounts that require the naming of a beneficiary. Review those accounts. Who is listed? Are the beneficiary designations still correct or do changes need to be made? Those accounts can be:

  • Life insurance policies – Don’t forget policies through your employer
  • Bank accounts – Bank and brokerage accounts can be set as TOD (Transfer On Death) or POD (Pay on Death) to avoid probate.
  • Retirement accounts – IRAs, 401(k)s, 403(b)s, SEPs, SIMPLE IRAs, TSPs
  • Investment accounts – Again, TOD designations can simplify estate planning.
  • Deferred Compensation Employer Plans
  • 457 Government Plans
  • Annuities
  • Health Savings Accounts
  • 529 Education Savings Plans
  • Pensions
  • Trusts

Changing beneficiaries may be as simple as a signature on a form. Others may require a notary seal.

Changes to a will

If changes need to be made to a will, ask your attorney how to go about it. It may require a notary only to attest a signature. But some states require two witnesses who are not family members and a notary to update a will.

In the era of Covid, deathbed updates are much more difficult. Having a lawyer and notary come to the hospital is now a rarity. But in response to Covid, some states now allow virtual notarization. You sign documents in front of witnesses and a notary who are all on a video call with you.

Be precise

End-of-life changes to an estate plan or will are often challenged. If a spouse is ill, disoriented, under the influence of medications or emotional, it is much easier to influence them, thus a last-minute estate plan is a prime target for those who seek to void a will. Attorneys at Stimmel, Stimmel, and Roeser have tips on what to watch for that may help avoid a challenge.

  • If an interested person, such as children from a previous marriage or grandchildren, can demonstrate that the testator was subject to inappropriate influence or control by an heir or any other person, then the will can be invalidated. A typical claim is that grandpa was going to give money equally to all the grandkids but one of the grandkids, while the rest were out of the room, pushed grandpa to leave it all to him by lying to grandpa about what the other grandkids were saying and grandpa changed his will accordingly.
  • Another common attack by those seeking to void a will is that the testator was not of sound mind when creating the will, either due to age, medication, illness, or injury. This is often combined with an attack based upon undue influence and, again, when close to death or on medication, it can be difficult to contest such a claim.
  • When already ill or medicated, estate planning issues can be a tremendous burden for the dying person, who is already facing the traumatic issue of oncoming death. Such a mental condition can mitigate against calm and careful planning and the ability to handle the demands of relatives and friends. Squabbles between family members at the hospital can lead to emotional outbursts by the testator who uses the inheritance to punish and reward those in the family.
  • Equally likely, the testator will forget what assets he or she owns or what promises have been made to what family members. It is not uncommon for the testator to want one plan, but awakening two hours later, will want a different plan. Estate planning under such circumstances can never be accomplished with the type of reasoning and calm consideration required.

Deathbed estate planning can be done, but it’s more practical, precise, and focused when done before the doctor tells a spouse to get their affairs in order. Thinking about death, for you or your spouse, is never pleasant. But taking on the issue now, while both of you are still healthy can save much pain and heartache when death is imminent.

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