This is What You Need to Know About Estate Planning During COVID-19

estate planning

As the coronavirus continues to be an issue, more seniors are thinking about end-of-life plans and their estate planning. If this is the situation you find yourself in, there are some steps you can take to get started.

Step #1: Know the estate planning terminology

There are quite a few buzzwords related to estate planning. Familiarizing yourself with these terms, having a basic understanding of what they mean, and learning how they’ll impact your estate is an important first step to embarking on any end-of-life plans. So here are a few terms you should know:

What is a Will?

A will is a legal document designating how your financial assets and property will be distributed after your death. This document, also called a testament, includes the name of an executor you choose to manage your assets until they’re distributed.

How about a Living Trust?

A living trust is a legal document placing all financial assets, including personal property, in a trust before you die. The trust is set up so you can use the assets during your lifetime. It also dictates beneficiaries of the trust, just like a will, upon your death. A living trust is also called a revocable trust, because you can easily change the terms at any time as long as you live.

Okay, so what is an Irrevocable Trust?

An irrevocable trust operates almost identically to a living, or revocable, trust. But irrevocable trusts are much more difficult to change unless you have the permission of the grantor’s named beneficiary. Irrevocable trusts can be an attractive option if you’re looking for tax-shelter benefits.

And what is a Testamentary Trust?

A testamentary trust is created upon your death, as designated by your will, if desired. Based on the terms of the will, all or part of the assets must pass through the testamentary trust before being distributed through the probate court process. These trusts are often set up to distribute assets from life insurance policies.

What is Probate Court?

Wills and testaments are reviewed for validity in probate court. But not all wills or trusts end up there. If your estate planning is done well, your family can avoid spending too much time and money in probate.

Step #2: Avoid online legal templates for estate planning

In the last two decades, more and more people have started using online legal providers to create common legal documents, like those associated with estate planning. And now the COVID-19 pandemic has triggered many people to start their estate planning. So, of course, companies offering online wills and trusts have exploded in popularity.

It’s true that online legal providers are quick and easy, especially during times of crisis. But small mistakes made on your online will or trust could result in your family spending months or years in probate court—or even worse, litigation. By doing your estate planning online, you could be inadvertently sticking your loved ones with thousands of dollars in legal fees. Because with online wills and trusts, you get what you pay for!

Yes, using an estate planner or attorney will have a higher up-front cost than creating a will or trust online. But in the end the cost of actually executing these flimsy online documents can far exceed the cost to create them.

The good news is that attorneys are working during the pandemic and can create and execute estate planning documents remotely. In fact, many states have authorized special pandemic provisions allowing e-notarization of important legal documents like wills and trusts.

Step #3: Consult an estate planning expert

Estate planning is a complex, complicated endeavor. Mistakes or missteps with these important documents can have catastrophic results for your family. The best way to protect your assets is to consult a professional estate planner, like those at American Heritage Financial.

Their dedicated staff is highly trained in estate planning, living trusts, revocable trusts, irrevocable trusts and more. They can evaluate your assets and wishes and walk you through your options. The’ll help you create an estate plan to meet your needs and the needs of your family.

The experienced professionals at American Heritage Financial understand the sensitive nature of these decisions and work diligently to maintain the highest level of respect and care for you and your loved ones.

If you haven’t created an estate plan, the time is now. Contact us at 866-784-1812 to learn more about how American Heritage Financial can help you create a well-crafted estate plan today.



image credit: shutterstock/Zerbor

Pete Blasi