As we all know by now, Governor Gretchen Whitmer issued Executive Order 2020-21 on Monday, March 23, 2020, effectively shutting down the state until at least April 13, 2020. As of the date of this writing, almost 2,300 people living in Michigan have contracted Covid-19. As we face this unprecedented health crisis, I recommend the following regarding your estate planning documents:
Review your existing estate planning documents
Under normal circumstances, I recommend that my clients review their estate planning documents any time they experience a major life event (marriage, divorce, birth of a child, loss of a spouse, etc.) and at least every three to five years. Even during a general estate planning review, my clients are often surprised at how much has changed in their lives.
Now is a good time to make sure your estate planning documents are current, and that the people you have appointed to handle your estate, or to make important life decisions for you, are still appropriate for those roles.
For example, you may have created your estate planning documents when your children were minors; you may now want your children to handle your affairs or to make medical decisions for you if you are unable to do so for yourself. Or maybe you had a falling out with the person you appointed as your Personal Representative. Or maybe your parents were appointed to be guardians of your children, but they are no longer able due to their age or failing health.
Create a Durable Power of Attorney-Healthcare if you don’t have one
A Durable Power of Attorney-Healthcare (DPOA-HC) allows you to appoint someone to make medical decisions for you if you are not able to do so for yourself. If you have a DPOA-HC, now is a good time to review that document and make sure the person(s) you have nominated is still able and willing to act on your behalf, if necessary. If you do not have a DPOA-HC, I recommend that you contact an attorney to create one.
My clients are often surprised when I tell them that your spouse does not have a legal right to make a medical decision for you without a DPOA-HC. If you want your spouse to make medical decisions for you if you become unable to do so, you have to make that designation through a DPOA-HC.
The DPOA-HC also allows you to make decisions about end of life treatment.
Have a discussion with your loved ones about your estate planning documents
If you appoint someone to manage your estate for you, or to make decisions for you if you become unable, you should have a conversation with that person about your wishes and how you want your affairs to be handled. You should also tell that person where your estate planning documents are located.
If you have adult children, this is a good time to talk to them about your estate planning documents, whether or not your children are appointed to help manage your estate. If your adult children are not appointed to manage your estate, they should know who is appointed instead. You should also provide the following information to your adult children: the name of your CPA or tax preparer; the name of your financial advisor; information regarding your life insurance.
And, though this may be difficult during the shutdown, I also recommend that you provide your primary care physician with a copy of your DPOA-HC, to be added to your medical file.
Review your beneficiary designations
You should contact your financial advisor, if you have one, or find some other way to review your beneficiary designations for your life insurance, retirement accounts, and other investment accounts.
If your life insurance, retirement accounts, and other investment accounts have designated beneficiaries, those funds will transfer to your beneficiaries immediately upon your death (usually once a death certificate has been submitted).
If those accounts do not have designated beneficiaries, those accounts become probate assets, which means they must go through probate before those funds can be transferred to your beneficiaries.
Have an estate planning attorney review your estate planning documents
Now is a great time to have your estate planning documents reviewed by an estate planning attorney. We are open for business, even though we are currently working at home.
It is our practice not to charge our clients to review existing estate planning documents. If we did not prepare your estate planning documents, we would be happy to review those documents, as well. Please contact our office to take advantage of this complimentary service.
For more information regarding coronavirus and Covid-19, please visit www.michigan.gov/coronavirus.