Just like the CDC, we wouldn’t want you to panic about the coronavirus. But it can’t hurt to be prepared, and that applies to your estate plan as well as your pantry and disinfectant supply. There is of course the obvious: If you die, you’d want your plan to be in order. It appears, though, that the chances of that are pretty slim. It’s more likely that you may be out of commission for a time even if you don’t get sick. You could end up quarantined on a cruise ship, in a hotel, or at home. Or maybe you do get sick and you are in isolation at a health facility or just don’t feel like doing anything but sleeping for a few weeks or more. Are your affairs set up to keep your life going if you can’t maintain your regular routine?
The most important documents to review: your powers of attorney and revocable trust, if you have one.
Why? These are the documents that allow others to step in for you if you are unable to handle your affairs.
Powers of Attorney
Your general financial power of attorney names someone (an “agent” or “attorney in fact”) to handle your finances if you can’t. Such a document typically gives your agent the power to do every possible financial act for you. But if you have a trust, it’s the successor trustee who would handle the trust assets. Your power of attorney for health care names an agent to make medical decisions for you if you can’t. Of these three, the medical power is the least important. Arizona law allows relatives and even friends to make medical decisions for you, but there is no similar law for finances. Even spouses don’t automatically get access to their spouse’s separate assets.
Powers of attorney are not just for elderly people; every adult should have them, and this nasty virus illustrates why. The virus spreads easily, anyone can get it, and no one knows how hard it might hit. In unpredictable situations, be prepared by reviewing your plan and updating it, if needed.
Get or Review Documents
First of all, you should have powers of attorney. Although you can easily find basic power of attorney forms online or at an office supply store, an established estate planning attorney’s documents will include more provisions, and the attorney can customize the documents to specifically suit your situation.
If you have documents and need to review, first look at your financial power. How well will it work if you get stuck or sick? Consider:
1) Who you name as your agent. If your agent is your spouse, that’s nice but not be good enough. You are probably physically close, so he/she might be sick or quarantined, too. You should name at least one back up. Many clients like to name close friends or kids that live in town. With this virus, closeness can be a detriment. You can name co-agents, and the one(s) who are able can act. Consider institutional agents, such as a bank or licensed fiduciary (like Fleming & Curti); the chance of an entire office going down with the virus is much lower than a single individual you might name.
2) What it takes for the power to kick in. If you have a “springing” power, one that requires one or even two doctors to weigh in on whether you are able to handle your affairs, reconsider. If the health care system is even more swamped than it is now, securing letters from doctors may hamper your agent’s ability to help you. And, why would you need a doctor to weigh in if you are stuck in another country or on a cruise ship? Consider allowing your power to become effective upon signing.
3) Whether it works. In Arizona, financial institutions may refuse to accept a power of attorney document — even if it is perfectly drafted and signed. A bank might refuse to honor a document because it’s too old (we recommend updating them every five years), the signature or notary stamp is blurry, or the agent looks suspicious. Moreover, some institutions have their own forms and will not honor any power of attorney prepared elsewhere. You should check with your bank, broker, financial adviser, etc., to ensure any financial power of attorney you have will be honored.
4) Your agent act effectively. Can he or she do the job without physically seeing you? Does the agent know you have named him or her? Do they have copies of the documents? Can they get access to the originals, if needed? Are your assets and obligations organized with clear marching orders? Can they access accounts online?
And if you have a trust, you will want to consider those same questions for those assets: What’s in the trust (is everything properly titled?). Who you have named as successor trustee? Will he or she be available? What steps need to be taken to give him or her authority to act? Can the agent access the assets? Can the agent access the original documents, if needed?
It usually makes sense for agent under power of attorney and successor trustees to be the same person, but there may be situations when it makes sense to separate them. Think carefully about how things might play out.
Medical, Post-Death Issues
Corona is a medical threat, so it also makes sense to review your health care power of attorney and living will. Will the people named be able to serve, if needed? Does your living will accurately express your wishes?
Then there’s imagining and preparing for the worst. Is your Will and/or trust up to date? Do you have a burial plan? Have you expressed your wishes over burial/cremation/scattering/services?
There’s never a bad time to review and revisit these issues, but a world-wide medical scare is a particularly good reason to do it. In the meantime, wash your hands, don’t touch your face, cough into a tissue (better than your elbow) and dispose of it right away, eat right, stay hydrated, and get plenty of rest. Chances are, you’ll make it through this, but it never hurts to be prepared.
