How COVID-19 Has Underscored the Need to Revisit Estate Planning

Recently, there have been a number of heartbreaking accounts in the news about children losing parents, sometimes within days of each other, to COVID-19. Whether your children are school-aged or now have children of their own, recent events have brought one important question into focus: when was the last time you reviewed your estate plan?

The answer to this question is key to whether your estate plan will succeed or fail. And with everything from the assets themselves to harmony in the family at stake, many have wisely concluded that now is the time to revisit estate plans and update them accordingly.

Here is why a “set it and forget it” approach simply doesn’t work with estate planning and some things to consider as you revisit your estate plan with your CornerCap Wealth Advisor and attorney.

1. Life happens. If it has been a while since you last updated your estate plan, chances are there have been significant events such as births, marriages, divorces, and even deaths in the family that may impact the plan in place. Take these events into account as you consider reallocating assets.
2. Who’s in charge? Take a close look at the people you deemed your durable power of attorney, trustee, and executor of your will. How confident are you in their ability to carry out your wishes, and have you effectively communicated your expectations to them? Are the individuals you originally named to these roles – perhaps a decade or more ago – still the right fit?
3. Harness the power of trust. Help loved ones avoid probate by placing appropriate assets in a revocable trust. If you’ve already done this, have you completed the follow-up task of transferring your assets into the trust you established?
4. Prepare the next generation now. One of the biggest reasons why estate plans don’t work out the way you intend is that the beneficiaries are not prepared to inherit wealth. Whether they do not know how to manage money or were not informed of the plan and have not come to terms with their new reality, working with advisors to strategize ways to ensure your loved ones are ready to inherit wealth is critical to a successful estate plan.
5. Cross the t’s and dot the i’s.  One often neglected part of estate planning comes down to simple paperwork. Ensuring that each of your financial accounts and other assets, including your home(s), have a clearly identified, updated beneficiary can facilitate their transfer upon death outside of probate. Check with each financial institution where you hold accounts to ensure you have the right transfer on death and / or beneficiary forms in place

While difficult to think about, the COVID-19 pandemic has reminded us about another important element of estate planning that focuses not on your assets, but rather your health: medical directives. While all families hope never to have to rely on such a document identifying who is authorized to make medical decisions on the behalf of an incapacitated individual, it’s well advised to have one in place for unforeseen and unexpected circumstances such as we’re witnessing this year.

Estate plans are living documents and should be revisited periodically to ensure your assets are distributed the way you want them to be. Considering an update to your existing estate plan or want help educating loved ones about what your plan entails? Contact your CornerCap Wealth Advisor to start the conversation.