Each month, we like to take stock of elder law news and developments and share them. The December round-up is actually the 2020 round-up. We’ve reviewed lessons we’ve learned over the past year, inspired by our own practice, cases we’ve read about, and even rumors we’ve heard. We’ve polled our team, and here are the top 10 (plus a couple of bonuses):
1) Does Fair Mean Equal?
Especially during the pandemic, some loved ones may need more help than others. Consider how help you have already provided or may provide in the future should be dealt with in your estate plan. Do you want to equalize? Or make clear that you don’t care to equalize? Also consider whether such help should be continued if you become incapacitated. You probably need to provide specific direction in order for your wishes to be carried out, and that’s true all the time, not just for the 2020 round-up.
2) Consider Communicating Values
The pandemic has many people re-evaluating whether their lives are consistent with their values. You may want to review your estate plan in light of the pandemic, too. Does your plan accurately communicate your values? Consider revamping your plan to include charitable donations or creating a separate document like an “ethical will” tailored to share values.
3) Know the Documents, Part I
In order to evaluate your documents, you need to know how they work. If you have a trust, do you know how your will and trust work together or how your financial power of attorney works with your trust? What does it take to activate your powers of attorney? Does your health-care power mention use of a ventilator? What what happens if one of your beneficiaries doesn’t survive you? How long does someone has to live in order to inherit from you?
4) Know the Documents, Part II
Are you named as trustee or agent under power of attorney in someone else’s documents? In order to serve properly, you need to know both the person you may serve and know how his or her documents work. What will your duties be? When are your powers activated? Do you need more clarity about financial management or health-care wishes? Can you be held liable if you make a mistake?
5) There’s More to It
Every fiduciary should understand that their job involves more than just the relevant document. Every trustee, agent under power of attorney, or personal representative is also governed by laws, both statutes and court opinions (known as case law), and maybe not in the state you happen to be in. No single document can capture what is required of you. As attorneys, we’d advise you to at least consult with an attorney to get a full understanding of the job.
6) Realize Plans Change
Those nominated in a document may decline, quit, or die before you do. In order to avoid court proceedings to maintain your affairs, be sure to name alternates. Also consider whether to include a mechanism for naming the next in line without the need for court intervention.
7) Get Divorced?
Divorce is one of those life events that demands attention beyond the proceeding. Although Arizona law removes a divorced party from some documents and designations, it doesn’t work for those governed by federal law. If you do nothing else, you should update your beneficiary designations on 401(k)s and other employer-provided benefits. If you leave your ex on as beneficiary of these “ERISA”-governed plans, he or she would inherit it, regardless of what the divorce decree says.
8) Get Married?
If you get married, re-do your estate plan. First and foremost, make sure your ex-spouse has been removed from your documents (unless your divorce required otherwise). And, again, check your beneficiary designations. Your ex-spouse might be removed by statute if it’s not an ERISA plan. (See No. 7.) But if your sister is still listed, she’ll get the asset, not your new spouse. If that’s what you want, fine, but you might want to tell your spouse.
9) Reconsider ‘Special Needs’
Every estate plan should consider whether a beneficiary or potential beneficiary might be eligible for needs-based benefits. Sometimes, it’s obvious because some people have life-long challenges such as autism or cerebral palsy. But many people become disabled later in life or in ways that are not so obvious. If they receive assets from you, their benefits may be in danger or lost. Be alert and adjust your plan, if needed. Even better, build in contingencies that can solve the problem, if needed.
10) Don’t Let COVID-19 Stop You
Maybe you’ve made adjustments to your estate plan and are waiting for the pandemic to end before venturing out to sign. Don’t. Waiting can have devastating consequences for your beneficiaries, both emotionally and financially. Your new plan, however well-crafted, likely is not valid. Faced with a new plan that is not valid and an old plan that is, your loved ones might not agree on the best way forward. That kind of conflict is never good. There are ways to stay safe and still get it done.
Bonus 1
Check beneficiary designations. This one is slightly revised from last year. Everyone should check their accounts every so often. Find all your beneficiary designations, print them out or write them down; do not trust your memory. First, make sure you have named some beneficiaries. Then make sure those named match your estate plan or intentionally deviate from it. (Note: naming a trust can be OK; if you have concerns, check with your attorney.) Then consider how distributions will be made post-SECURE Act. Does everything still match your wishes?
Bonus 2
Be kind. This one also is a slightly revised repeat from last year. The sentiment seems to apply even more now. “Be kind” is a bit of a motto in Tucson, thanks to the work of Ben’s Bells. But when life gets stressful, uncertain, or full of sorrow, it can be hard to remember to appreciate others. Let your spouse, parent, child, friend, lawyer, trustee, colleague, boss, employee know you care. And be kind to yourself, too.
That’s the 2020 round-up. So long, 2020. Welcome, 2021, we’ve been waiting for you. Happy New Year!
