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Foundation Updates

Managing Finances, Estate Plans and More during Uncertain Times: Part I

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Editor's Note: Martin M. Shenkman, CPA, MBA, PFS, AEP, JD, is an attorney in private practice focusing on estate and tax planning and estate administration. He is the author of 42 books and has authored 1,200 articles on these topics.

We are living in extraordinary times: deep social changes, economic uncertainty and the worries and health challenges of the COVID-19 public-health crisis. What steps can people with Parkinson’s disease and caregivers take to manage financially? What legal documents should you have in place? How might they be different now? While the answers will vary to person to person, and the laws vary by state, here are some considerations to help you begin.

In Part I of this blog, I'll provide a list of key planning documents that every adult should have in place, and should review to ensure they meet current needs.

During times of uncertainty, people may wish to create or update important legal documents that organize their assets. These documents can include:

Power of Attorney — This is a legal document in which you name a person, called an agent, to handle legal, tax, financial and other matters if you are unable to do so. Having a power of attorney in place now may be particularly important so that your agent can transact business for you, and help you avoid unnecessarily having to go to a bank or other business location. You might review the detailed powers given to the agent to determine if they should be restricted or broad, consider tax and other provisions, and differentiate how these factors might live optimally vs. what will suffice in current circumstances.

If you have an existing document:

  • Are the people you named as agents still people that you can rely on? Some people name close friends or family who live at a distance. It may be best to have somebody local who can help you address specific matters.
  • Is the document so old that banks or others might be concerned about its validity?
  • Does your document say your agent cannot act until you are incapacitated? You might want to change that to a new power that lets your agent act immediately (i.e. not contingent on your being disabled) so that your agent can help you today. The restriction of only being effective when you are disabled might make your form useless in the current environment.

If you’re preparing a new document:

  • Consider permitting the agent to communicate decisions via email, electronically signed documents, and perhaps even via Skype, FaceTime and similar services. It is not clear that banks or other providers will accept this, but it might nonetheless be worth considering.
  • You might also hold banks and other third parties harmless for relying on such electronic communications to encourage them to be more accepting.

Will and Revocable Trust — A will is a document in which you name guardians if you have minor children, and provide for how your assets can be distributed in the event of death. Most common is a “pour–over will,” which pours or transfers assets in your estate into a trust. The trust then provides for your dispositive plan.

Many people have ignored their documents for so many years or decades that little of what the documents contain is what they presently want. It is important to have documents in place, ensure the executor is someone you feel confident naming, and that the dispositive scheme is current.

If you have to change your will, consider how you can validly sign a will, and whether remote or electronic signing will work in your state. Some states permit a “holographic will.” That is a will that you write in your own handwriting and sign. But the rules vary by state and handwriting a will has to be done with great caution as your handwritten document won’t practically be able to include many of the standard provisions that even a simple online form might include.

In Part II of this blog series, I focus on health care related planning documents and the next steps you should take once all of your planning documents are together.

For more information on estate planning, check out the articles Why You Must Check Your Estate Plan Every Year and Tax Benefits of the CARES Act

The information provided is intended and provided solely for informational and educational purposes. None of the information is intended to be, nor should they be construed to be the basis of any investment, legal, tax or other professional advice. Under no circumstances should these materials be considered to be, or used as independent legal, tax, investment or other professional advice. The information is general in nature and not person specific. Laws vary by state and are subject to constant change.

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