ESTATE PLANNING IN THE TIME OF CORONAVIRUS
With over 200,000 deaths due to COVID-19 it is not surprising scores of people are thinking about writing wills and making critical estate planning decisions about who will be in charge of their medical care and finances if they become ill and incapacitated. At the same time, due to concerns with transmission of the coronavirus and social isolation, many people are not comfortable with going into a law office and sitting with someone to prepare the legal documents. What documents should you have?
2. Health care proxy
3. Living will (Advance Medical Directive)
4. Medical power of attorney
5. Durable power of attorney for finances
6. Pet Trust Document or Pet Life Care Agreement
Here are two ways to get your documents in order without spending time in a law office.
A. The virtual estate consultation with legal counsel
1. Videoconferencing with your legal advisor to prepare your will.
Today, estate lawyers are connecting with clients via videoconference services like Zoom, Skype or FaceTime working with you online to obtain the information needed to prepare your documents. In this situation, you can work with your legal counsel via video conferencing and they can draft the documents for approval and signature. Zoom is easy to use when they set it up, but if you are not comfortable, just ask for Skype or FaceTime.
2. Electronic Signature or Drive-up Signature?
Once your documents have been prepared, however they do require signatures. The Uniform Electronic Wills Act permits testators to execute electronic wills and allows probate courts to give electronic wills legal effect, however each state must enact the law for electronic wills in that state.
E-Wills: As of September 24, 2020, the following states have authorized e-wills: Utah, Nevada, Indiana, Arizona and Florida. California, the District of Columbia, New Hampshire, Texas, and Virginia have considered e-will legislation, but have not yet adopted a law. During the coronavirus pandemic, New York and Connecticut have issued executive orders allowing for the temporary electronic notarization or execution of wills.
Undoubtedly, other states will follow suit and eventually it will become standard in each state. Be sure to check your state requirements with your legal counsel since laws change and there may be specific requirements in your state.
Drive-Up Signatures: In this time of COVID-19, you legal counsel should have protocols in place that make this a short and safe process and some may have a no-contact, drive-up will signing procedure in place, so be sure to ask for a drive-up option, even if it is not offered.
Note: The cost to have a lawyer draft estate planning documents can vary widely depending on where you live and how complex your situation. A lawyer might charge a flat fee of anywhere from $300 to more than $1,500 to draft a will and other basic estate planning documents. If working on an hourly basis, estate lawyers typically charge $150 to $300 an hour.
B. DIY-Do It Yourself with Online Estate Planning Software and Services
The demand for more affordable, simple do-it-yourself wills and estate planning documents is also on the rise. For some time now, you've been able to draft an online will on a home computer via firms or software like Rocket Lawyer, LegalZoom, FreeWill, QuickenWillmaker & Trust 2020, Trust & Will and Nolo Willmaker and Nolo Living Trust.
Note: Some of the online platforms are free to create an account and input your information to create your estate documents, but when it comes time to generate the documents, a fee is required. Fees can range from $69 to $129 on average.
In most states these estate documents require adult witnesses and notarization, a procedure that generally takes place in person and with signatures in front of a notary to be valid.
Some states require witnesses who are “disinterested parties,” meaning they aren't in line to inherit anything. Not easy to do when you're probably hunkered down at home with members of your family to prevent the spread of the virus.
Prior to the COVID-19 pandemic, 23 states already allowed remote online notarization in which a notary and signer are in different locations and use two-way audiovisual communication to securely execute electronic documents. These include Florida, Kentucky, Michigan, Minnesota, Montana, Nevada, Ohio, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.
Given the pressure by residents anxious to prepare these estate planning documents, some states are now permitting remote online notarization for some of these documents, including Arizona, Iowa and Pennsylvania.
In two states — Nevada and Indiana — after a person drafts a will online with Trusts & Will, he or she connects with Notarize.com by video chat with a notary who has received the emailed will. The notary then examines the document, asks some questions, notarizes it and emails it back. The whole procedure is recorded, encrypted and stored by Trust & Will." Boom! All done, completely online!
Risks of Online Forms:
1. It is very difficult for online forms to stay current with changes in the law that varies by state. Every year, the legislature may tweak its laws governing probate, estates, trusts, advance directives and other important documents. If your form is outdated, the form may fail in court.
2. Online forms don’t give legal advice on how to structure assets or beneficiary designations, how to minimize taxes, what the new SECURE Act is and what it means for your retirement accounts, how to avoid probate, how to protect your disabled spouse or child, and so on.
Given the risks, you may think that you can save some money by creating your own documents online and just ask your attorney to review it, but you will want to check with your attorney first to see if they are willing to do that and whether or not that actually saves you money. Some attorneys will not comment on or give their blessing for an online form you make, while other attorneys would encourage you to create a draft that can be edited and may offer a discounted price for the service.
Special Note for Pet Owners:
Many attorneys do not actively include pets in estate planning and may not ask you about pets that you have. It may be up to you to ask to have your pets included in your estate. Likewise, online software current versions most likely will have questions and an opportunity to set up a pet trust, but check to be sure they do before making any purchases of online estate planning software. If you would like a template of a pet trust agreement that can be modified for your pets, visit our website at www.perpetualcare.org to request a free template.