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Are You Prepared? Here are 4 Areas of Your Estate Plan to Review in Light of COVID-19

Insights

As the country starts to ease the restrictions related to COVID-19, many Americans continue to do their best to help slow the spread and protect their brethren by staying home and continuing to self-isolate. Understandably, many people are still wary of the many unknowns related to this pandemic and how it will play out. A lot of Americans still have their guard up and remain on edge in public situations. Since just about the turn of the new year, we've been forced to stare down many fears like getting sick, losing a job, being alone, among others. This fear and anxiety may make you suddenly feel the need to have all of your affairs in order - just in case. 

The reality of the situation is, It never hurts to be prepared in the event that, you may need to be hospitalized for any sickness, for instance, the coronavirus. Thinking about falling ill or not being able to make decisions for yourself is truly frightening, but like most things in life, having a plan can help ease your concerns. 

Many Americans are taking this time, right now, while stuck at home - to update their estate plans,  there just hasn't been a better time than now, to put it all together. 

Estate Plan Documents That Should Be Reviewed & Updated If Necessary

Anyone over the age of 18 should have some level of an estate plan in place. Wills and trusts are a part of the puzzle for sure, but you may be surprised to learn that they aren’t the only documents you should be prioritizing. A strong estate plan will include the following documents, such as a living trust, financial powers of attorney, health care powers of attorney and more, which are all very important.1 

In light of the current pandemic, two of the most important documents to have up-to-date and on-hand are your medical and financial powers of attorney. Just think, if you’re quarantined in your home, admitted to a hospital, or in a worst-case scenario - become incapacitated, you’ll need someone to handle your finances or make medical decisions on your behalf when you are unable to.

With those in place, it is a good idea to continue organizing a comprehensive estate plan that includes the following documents. 

1. Power of Attorney and Health Care Proxy

A financial power of attorney grants authority to carry on a person’s financial affairs and protect their property by acting on their behalf. This includes the ability to write checks, pay bills, make deposits, purchase or sell assets or sign any tax returns.1 

Similarly, a health care power of attorney grants the authority to make health care decisions on your behalf should you become incompetent or incapacitated. If you are over the age of 18 and do not have a health care power of attorney in place, your family members will need to request that the court appoint a guardian to take on these responsibilities. This can take time and could possibly put your well being in jeopardy.1 

Ensuring that you have named trustworthy and reliable individuals as your powers of attorney is a major key as you update your estate plan. If your current documents are outdated, implementing new ones should be at the very top of your list.

2. Your Will

A last will and testament is a legal document that allows you to state unequivocally, how you would like your property distributed after your passing. This document will also allow you to determine who will oversee the distribution of your assets.2 The executor will attend to your affairs after you pass, probate your will if necessary, and file income and estate tax returns on your behalf. If you have children who are minors, the will is where you would name a guardian for them. 

We all have assets that need to be transferred after death, but without a will, there is no way to let the world know how you would like your assets handled after you are gone. In this case, the distribution of your assets will be handled by the state and a court will decide on the best person to oversee the administration. This is similar to an appointed guardian in that if you don’t appoint one, a court will decide on the best person to fulfill this role.2

3. Living Trust

Generally speaking, your trust will benefit you while you are alive and often times may be beneficial to your spouse of child among others. Identifying who will receive assets and what assets they will receive upon your death, are details that most likely will need to be updated based on changes that take place. Additionally, your trust can outline whether your beneficiaries receive your assets outright or perhaps you’ll want to release specific dollar amounts at specific times or even create an income stream. If your beneficiaries are young, you may want to consider holding assets for them in a trust until they are old and responsible enough to handle finances themselves. 

Appointing a trustee will identify who will step in to manage your affairs without the involvement of the court, avoiding extra time and money associated with probate.3 A trust also affords you privacy regarding the details of your estate since it eliminates the need for probate, which is a public process. 

4. Beneficiaries 

Another important update you should make to your estate plan is to review all beneficiary designations on your retirement accounts, Life insurance policies, and all other investment accounts.2 Bear in mind, a joint asset such as a bank account will pass to the surviving joint owner. It is of paramount importance, to name someone you trust to act in your best interest should the time come for them to be responsible for your assets. 

Due to stay-at-home orders and social distancing practices, it may be more difficult to meet with your attorney or notary in-person to prepare or update your documents. There are template websites online that allow you to create documents from scratch, and some states have even suspended various statutes to let people appear before a notary public via video-conference4 While some documents can be finalized virtually, a will must be signed in front of witnesses, which means this step to finalizing your documents may need to be done in person. 

Now is the time, while we all have a bit of extra time, you should start reviewing your estate plan and making any adjustments with the appropriate professionals as needed. Making all necessary changes now will likely benefit you and your loved ones in the future. 


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About the Author

James M. Comblo , CFF
is a Partner and the Chief Compliance Officer at FSC Wealth Advisors. His greatest passion in the financial services industry is helping clients accomplish their dreams both with investments and their personal lives. To learn more about him click here.




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  1. https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/
  2. https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/an_introduction_to_wills/
  3. https://www.consumerreports.org/cro/2013/11/how-to-create-a-bulletproof-estate-plan/index.htm
  4. https://www.americanbar.org/groups/law_aging/resources/coronavirus-update-and-the-elder-law-community/notarization-in-the-age-of-covid-19--the-status-of-states/