April 16, 2020   Estate Planning

Get COVID-19-Ready: Top 3 Legal Documents Everyone Needs

From stocking up on canned goods to wearing face masks in public, Americans all over the nation are feeling the impact of the coronavirus on daily life. While it’s unpleasant to think about, now is the time to ask yourself, “What can I do now in case I get sick?” In the event you become ill or stuck abroad and are unable to travel home, it is important that you designate trusted people to make sure your bills are paid, your taxes are filed, money is available for your family, and medical decisions can be made on your behalf.

While it’s unlikely that you’ll become incapacitated and hospitalized because of the coronavirus (even among those who contract it, most quickly recover fully), it is important to prepare for this or similar scenarios, as there are plenty of other situations (like injury, accident, old age, or illness) that could leave you incapacitated and unable to carry out your normal responsibilities. To ensure that you have the legal framework in place to provide for your loved ones, and make sure your medical wishes are honored and your financial responsibilities taken care of, taking steps to have the following three legal documents should be at the top of your to-do list:

  1. A Living Will
  2. A Healthcare Directive
  3. A Financial Power of Attorney

These documents help you prepare for events like the coronavirus, providing relief for your family members by alleviating any uncertainty regarding your healthcare decisions and financial obligations.

Coronavirus Facts
  • The incubation period (how long it takes for symptoms to show) is 2-14 days
  • 71% of cases are male
  • The median age of cases is 45 years; however
  • People of all ages can be infected by the coronavirus
  • The fatality rate is estimated to be between 2-3%
  • Of those infected, 8.6% are in critical condition at some point during their illness

Get more coronavirus statistics by visiting www.worldometers.info/coronavirus/


Planning for incapacity

Regardless of your age, gender, or whether you have any preexisting conditions—there is a possibility that anyone can become incapacitated (defined as the lack of physical or intellectual ability to care for themselves or manage their own affairs) at any time. Whether you become incapacitated due to illness, injury, or age, it’s important to plan ahead and make sure your health care wishes are communicated to a trusted person you have authorized to make medical decisions on your behalf and someone has been appointed to manage your financial affairs.

Appointing a medical agent

Your advanced healthcare directives are extremely important legal documents, especially in light of the coronavirus. In case of a medical emergency, these documents will ensure that your healthcare wishes are honored.

There are two important healthcare directives: your medical power of attorney and your living will (also called an advance directive). In your medical power of attorney, you select a trusted individual to be your medical. The individual you chose will be responsible for making critical healthcare decisions for you, such as determining which doctor or hospital to use for your care. In your living will, you can state your wishes about the medical treatment you do, or don’t, want to receive (such as artificial hydration or nutrition) if you are in a persistent vegetative state or terminally ill.

Having both of these documents in place will not only provide peace of mind to you but will also alleviate stress for your family, who would otherwise be burdened with potentially having to petition a court to obtain the authority to make these difficult decisions during an emotionally trying time. In addition, without these documents, your healthcare wishes may not be honored and the person you would have chosen to make decisions on your behalf may be left out of treatment discussions with your doctors.

Appointing a financial agent

The world doesn’t stop just because you fall ill or become incapacitated due to injury. Another important part of incapacity planning is creating a financial power of attorney. Just as you would want someone to make decisions and communicate your healthcare wishes on your behalf if you are unable to, you’ll also want to select a trusted individual who will be responsible for managing your money and other property.

Should you fall ill or otherwise become incapacitated without a financial power of attorney in place, financial accounts may be inaccessible to those who need them, bills may not get paid, tax returns may not be filed, and property may not be bought or sold. Instead, a court may have to appoint someone (possibly an individual you would not otherwise have chosen) to act as your agent and oversee the guardian’s every move. A financial power of attorney can provide a person you trust with the authority to handle these issues without the court’s involvement.

Pro tip: The dangers of relying on joint ownership

You might be thinking, “Won’t my finances be taken care of if my accounts are held jointly with my spouse/child/family member?” The main problem with relying on joint ownership (and there are many) is that it usually only confers limited power. For example, a joint account holder can access funds and pay bills, but in the case of real estate, they will not be able to mortgage or sell a property without the consent of all other owners.

Additionally, by adding a family member to your accounts or real estate titles, you might be saddling them with an unexpected tax bill by triggering gift tax liability. Further, you may leave your assets vulnerable to potential seizure should the joint owner be sued or have other creditors with claims against them. Should that happen, a court could take your property to satisfy the joint owner’s debt.

3 Things to Keep in Mind When Choosing Your Agent

Choosing the right people to fulfill the roles of medical and financial agent can be more complicated than one might initially think. Most people immediately turn to a spouse, adult child, or parent. However, due to the emotionally and mentally taxing nature of these roles, a close family member is not always the best person for the role. To help you choose your medical and financial agents, consider the following factors:

  1. Are they able?
    Many states have legal requirements one must fulfill in order to be appointed as a medical or financial agent—for example, they must be a certain age (usually 18 years or older), and some states prohibit health care providers from being medical agents or individuals who own or are employed by the facility in which you are receiving medical treatment to be your health care agent.

    Aside from the legal requirements, there are other factors to consider in determining an individual’s ability to serve in either of these extremely important roles. Being a medical can be stressful and requires the ability to make level-headed decisions, even when someone they love is suffering. It also requires the agent to be assertive and able to advocate on your behalf. When choosing your agent, ask yourself: Is this person emotionally mature and stable enough to handle this responsibility? Do they have the knowledge required to fulfill the responsibilities required of them?
  2. Are they willing?
    Willingness is often an overlooked but extremely important factor. Because this person is acting on your behalf, they need to be willing to put aside their own beliefs, values, and opinions in order to carry out your wishes. Additionally, acting as a medical or financial agent can be a time-consuming and emotionally challenging job. Don’t just assume that the person you choose is willing and able to set aside the time necessary to fulfill their responsibilities. Be proactive and ask that person if they are willing to take on the role. Having a conversation upfront will also allow your chosen agent to ask questions to ensure they understand your wishes and to clarify what you expect of them.
  3. Do they live close by?
    The person you choose to act as your medical and/or financial agent should be someone who lives close by and is able to act on your behalf very quickly in the event of an emergency, especially since your advocate may need to serve in that role for an extended time period. Due to the coronavirus, many people might currently be under a mandatory or recommended stay-at-home order, or may not be able to travel to another city or state. If your agent lives farther than 60 miles away from you, consider naming several alternate agents to account for the agent’s potential unavailability.


How an estate planning attorney can help?

They can make sure that your documents are legally valid. Under the law, estate planning documents, such as healthcare directives and powers of attorney, must meet certain requirements to be legally valid. The law that applies to estate planning documents is determined by each state—and there can be wide variations in the law from state to state. If your estate planning documents are not valid, a court can end up appointing someone to make your health care decisions and manage your finances and property. By consulting a local estate planning attorney, you can ensure your documents are legally valid and that your wishes are carried out.

They can make sure no important information is left out. If you create powers of attorney or healthcare directives on your own using online “do it yourself” software, there is the possibility that you may leave out important information or documents that could prevent your estate plan from accomplishing your goals. Without legal training, you are unlikely to know which documents you need to fully plan for the future. In addition, you may inadvertently include provisions that are contradictory or make other important provisions ineffective. By consulting an estate planning professional, you can rest assured that your estate plan will be complete and comprehensive.

Get started on your estate plan today by contacting an estate planning professional in your area.

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