Article by Jory Barrad, Director of Development and Communications, The Pathway School. The article was originally shared on LinkedIn. See the article here: https://www.linkedin.com/pulse/wills-estate-planning-during-coronavirus-pandemic-jory/
Many attorneys are reporting higher than usual activity with current and new clients for creating and updating wills and estate plans during this pandemic. Web search tracking also indicates a recent spike in searches related to wills and estate plans. COVID-19 is certainly a reason why more people are concerned about their wills and estate plans than they may have been in the past. I’m sure that many people, myself included, have spent more time thinking about their own mortality over the past 10 to 12 months, especially if we know people who have either contracted the novel coronavirus and become sick or perhaps have even died as a result.
One attorney was recently quoted in an AARP article as follows:
“Mortality is on the front of their minds,” Rubin said. “Spurred by the coronavirus pandemic, clients who I haven’t heard from in 10 or 15 years, as well as prospective new clients, have been reaching out to update their existing estate planning documents or write new ones. It’s been pretty unusual to get this many requests. And they want to move quickly.”
Sadly, many older adults still do not have wills or estate plans. According to Caring.com, in 2020 about 52% of people 55-years of age and older do not have estate planning documents in place. And that number has been on the rise? So, if you are reading this and are over 55, I hope that you do not fall into that group of people.
Even with the pandemic, restrictions do not make it impossible to get a will or other estate plans constructed, signed, and executed. The number of people using will-writing websites surged by as much as 200% in late March, when the vast majority of states ordered social distancing measures. Or you can meet with an attorney or estate planner virtually and plan to sign and have the documents witnessed and notarized as needed. There are five key estate planning documents to consider. More information can be found about these documents in the referenced AARP article, but I will list them here for reference:
1. Will
2. Healthcare Durable Power of Attorney
3. Living Will
4. Durable Power of Attorney for Finances
5. HIPAA Authorization
It’s also a good idea to have a Digital Assets Inventory, which is a complete documentation of your online accounts, electronic files, and physical computers, and other devices, along with usernames, passwords, security question answers and any other information necessary to access each digital asset.
Furthermore, with the recent change in administration in Washington D.C., other changes may be on the horizon that could have a greater impact on people with high net worth such as potential changes to estate tax exemptions, changes to the step-up in basis rule, and changes from the SECURE Act passed in 2019 impacting the “stretch strategy” on inherited IRAs. So, between COVID-19 and uncertainty around the potential for future changes in our tax structure, now is a really good time to revisit your will or estate plans, or to get them done and in place if you haven’t already.
As many people look at their wills and estate plans, they also consider how they can best provide for their heirs and for the charitable organizations that they care about. Supporting your favorite charitable organizations through your will or estate plans is known as a Planned Gift and is how you can “leave a legacy”. This is also known as gift planning. These are gifts and forms of support that, in many cases, requires nothing “out-of-pocket” today, yet greatly helps nonprofit organizations in the future. This pandemic has also heightened the focus for nonprofit organizations, and the donors who care about them, not only on their revenue today, but their sustainability for the future. Nonprofit organizations that do not have an endowment (or investments) resulting from planned gifts from donors in the past, do not have the “rainy day fund” they need to continue operations and fulfilling their missions as revenue has dropped during this pandemic.
There are other forms of Planned Gifts that do not involve gifts from your will or estate and can help donors reduce tax liabilities today. Some of the most coming are gifts of mature stocks or securities, gifts of other assets such as IRA rollovers, life insurance policies, real estate, and real property, charitable gift annuities and charitable trusts – there are several types of trusts all with different types of benefits for you, your heirs, and your favorite charitable organization. It is always suggested to discuss these options with your financial advisor and/or attorney as well as someone like me at your charitable organization of choice when you are thinking about your plans.
As a fundraising and communications professional, I would be remiss at this point if I didn’t mention The Pathway School. Fortunately for our school and the 175 or so students and families we currently support in the Greater Philadelphia region, we have a 60-year history of success that hinges on delivering “best-in-class” special education and supporting clinical services bolstered by fiscally responsible practices. So, if you may be looking to get your will or estate plan in place and would like to include supporting an organization that provides life-changing services for students with special needs in 50+ communities, visit The Pathway School’s website for more information. Contact me if I can be of assistance to you in thinking through how you might “leave a legacy” through your estate plans.
Most importantly, please do not go without a will or an estate plan. Without an up-to-date estate plan in place, you or your loved ones may be faced with the unpleasant prospect of having state law and probate courts determine who will be responsible for your financial affairs and healthcare decisions. A thoughtful, up-to-date estate plan, on the other hand, provides peace of mind for you and your loved ones and allows you to control where your assets go at your death, including your charity(s) of choice. Having such plans in place, and when they include Planned Gifts, is “win-win-win”. You win, your family members and loved ones win, and the charitable organizations you care so much about also win.