: How to plan your estate during a pandemic

Without proper estate planning documentation, a person’s wishes for their assets may not be followed. Beyond a will, there are documents in place that can assist in describing how their wishes are conducted, and types of accounts that can hold significant assets. 

Many Americans forgo wills, despite the fact they can be simple documents that spell out to whom their assets go. Even the rich and famous might not have this paperwork. Chadwick Boseman, star of Marvel’s “Black Panther,” did not have a will when he died in August after a long battle with cancer, nor did Jimi Hendrix or Prince.

Creating a will can be a relatively simple process, but may be emotionally and mentally taxing. “Many people find the task of getting their estate planning done a daunting process, whether it’s because they don’t want to face their own mortality, they can’t decide how to distribute their assets or they just can’t find the time to actually meet with an attorney to get it done,” said Kathleen Kenealy, managing director and senior wealth adviser at Boston Private. 

Still, here’s what advisers recommended people do to get started: 

• Account for all of your assets and liabilities. This includes every piece of financial information necessary, including bank and investment statements, as well as mortgages and other debts, said Charles Weeks, founding partner of Barrister. You should also have a secure place you keep important websites and corresponding passwords to share with loved ones and professionals you trust. “Even for those individuals who are well below the lifetime estate exemption amount, preparing a personal inventory of assets can be quite valuable,” said James Guarino, managing director of Baker Newman Noyes. “If nothing else, having a formal, written list of assets provides one with much more clarity regarding the eventual distribution of assets (to heirs) from their estate.” 
• Find a trusted professional. Financial advisers help individuals manage their assets, including their future estate, but they can also match their clients with an estate planning attorney, said Jeffrey Edwards, president of Atlas Financial Plans. 
• Decide who will act in crucial roles. These positions include: someone with durable power of attorney and a health care proxy, who serves in your best interest if you become incapacitated, and an executor, to administer your estate. “I have seen too many times where people go meet an attorney and never make it back because they never decided who will serve in these important positions,” Weeks said.
• Relatedly, pick who will be the guardians of minor children. “I don’t care how much money people do or don’t have, there is absolutely nothing more important than for those with children to name a guardian in the event the parent(s) die prematurely,” said David Mendels, director of planning at Creative Financial Concepts. Individuals may have good family members to fall back on in this sort of emergency, but not everyone will agree on what is best for the child. “Couples may not agree and these decisions can be tough. Flip a coin if you have to, but don’t leave it for others to have to figure out.” 
• Think over how you’d like your assets to pass to your heirs or preferred charities. There are various types of trusts that can distribute funds to beneficiaries. Kenealy also suggests asking yourself: if you’re married, are you worried if your spouse remarries? If you have children, do you want them to get their inheritance immediately or at a specific age? Are you concerned about creditor issues or divorces for your children? And do you have grandchildren that you want to provide for?  

Here are more questions to ask an adviser or attorney when estate planning: 

• Which assets are controlled by my will and which bypass this document? “For example, life insurance policies and retirement accounts pass by beneficiary designation, not by the will,” said Patti Black, partner at Bridgeworth Wealth Management. “Likewise, a home owned jointly with right of survivorship passes to the surviving owner.” 
• For which accounts do I need to name a beneficiary? And how can I review the ones that may currently be named to make sure they’re up to date? “If you do the documents and do not follow up with updating the beneficiary information, then you are creating a mess,” said Brett Holmes, a financial adviser. 
• What are the tax implications of my decisions? Most Americans won’t be affected by the estate tax, which is imposed on estates of more than $11.58 million in 2020, but it’s still good to know if how property is passed on from one person to another might be taxed — for the estate as well as the beneficiary.  
• What will all of this cost? Preparing documents, going over last wishes and other key components of estate planning cost time and money. 
• Is a trust appropriate for my situation? What vehicles are best to manage my assets?
• Will you work together with my other advisers to make sure that everyone is on the same page? “How the accounts or insurance are titled and where they are held impacts who actually receives the money and how much,” said Sean Williams, a wealth adviser at Sojourn Wealth Advisory. “Too often, families make one decision with an estate attorney and another with their adviser. The result can lead to costly mistakes and a cumbersome estate settlement for loved ones.”  

One more suggestion experts had: talk to your family members after the plans are in place, even if that may be difficult, Black said. “After documents are signed, I recommend clients get comfortable being uncomfortable and have a family meeting with their adult children to share the ‘why’ behind decisions, like making unequal distributions among children,” she said. “A family meeting allows you to ‘set the record straight’ and prevent your decisions from being misinterpreted after you are gone and unable to speak for yourself.”