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Why COVID-19 Makes Estate Planning More Important Than Ever

Why COVID-19 Makes Estate Planning More Important Than Ever

The COVID-19 pandemic has transformed how we live our lives for the immediate future. While we are all doing our part to slow transmission, the disease is still spreading and can impact you and those you love. For many, contracting COVID-19 can lead to life-threatening consequences, even if you are otherwise young, healthy, and without preexisting conditions.

Becoming unexpectedly incapacitated or even passing away without any form of estate planning means your wishes might not be honored once you are unable to make decisions. With COVID-19 still at large in many areas, the risk of becoming seriously ill or worse can be higher than normal. It is essential you consider formalizing an estate plan in order to protect you, your property, and your family. We break down the estate planning documents you should consider exploring below.

Wills & Trusts

A last will and testament, or, more simply, a will, is a powerful mechanism that helps protect your property and your loved ones once you pass away. Passing without a will in place can result in the state deciding what happens to your assets and who takes care of your minor children.

When properly drafted and executed, a will in the state of Arizona can establish some of the following:

  • A guardian to your minor children
  • The beneficiaries of your assets, whether they be individuals or organizations
  • A trusted individual to distribute property left for your minor children or others
  • A personal representative (also known as “executor”) to manage the terms of the will
  • Resources for funeral arrangements

While a will is a critical tool in estate planning, it is far from the only relevant document, as wills only become relevant when you pass away. While COVID-19 is life-threatening for many, many others recover, though often only after a lengthy period of incapacitation while hospitalized or rehabilitating. During this period of serious illness, you may not be able to make decisions, in which case something called a revocable living trust can be extremely helpful in protecting your estate, as well as valid Powers of Attorney

A revocable living trust more allows you to name yourself as a trustee, as well as successors in the event you cannot serve. A trust is a private estate planning document that does not get filed with the Court for judicial oversight. If you were hospitalized due to COVID-19 complications and unable to handle the day-to-day of your financial affairs, for example, a co-trustee or successor trustee could continue to manage your trust in good faith. If you pass away and you have a properly-funded trust, your assets will be handled in according to your wishes, without judicial intervention.

Furthermore, you can establish beneficiaries of your trust in the event you pass away. If all of your property has been transferred into the entity, you can potentially avoid the expensive, time-consuming process of administering an estate in probate court, which could otherwise delay your loved one receiving your assets and incur additional cost and expense.

You may also consider establishing an advance directive, also called a “living will,” which establishes protocols should you be unable to advocate for yourself in an end-of-life scenario. For example, an advance directive / Living Will could dictate whether you would like to be put on life support if you entered a comatose state or were otherwise terminal.

Powers of Attorney

Formalizing powers of attorney can be an effective and direct way to give loved ones or people you trust the control to make decisions on your behalf should you become unable to do so yourself. If you are married, the state of Arizona’s “surrogate” statute does tend to permit certain family members to make some decisions in these scenarios, but they may not have the authority to make all of the decisions necessary to honor your wishes or effectively make decisions about your care. Establishing powers of attorney can help avoid unnecessary confusion and ensure efficient decision making on your behalf should you become incapacitated. Most importantly, having valid, effective Powers of Attorney drafted can avoid a costly court proceeding known as Guardianship.

Naming a medical power of attorney gives the designated individual the ability to make medical decisions on your behalf if, for any reason, you are unable to communicate with your healthcare provider. For example, this could include a scenario where complications related to COVID-19 render you unconscious or otherwise unable to communicate. Your medical power of attorney, perhaps your spouse or a sibling, could then advocate on your behalf.

Separately, a durable financial power of attorney gives the designated individual authority to make financial decisions and conduct business on your behalf should you become incapacitated. You have the ability to make the extent of their authority as broad or as limiting as you prefer. For example, you could allow your financial power of attorney to pay your bills if you are hospitalized but not permit them to run your business.

The consequences of not having medical or financial powers of attorney in place can be dire. Should you become incapacitated, there may not be a clear chain of command on who can make decisions, even with Arizona’s surrogate statute. Your loved ones will likely have to go to court to resolve who has decision-making authority if there is a dispute, and you will effectively lose any say in how your affairs are conducted. The costly process by which someone would go to Court to obtain authority to handle your financial affairs takes place in probate court and is called Conservatorship.

Never Too Soon to Start Planning

The risks associated with the still-evolving COVID-19 pandemic emphasize how important having a robust estate plan in place can be. Life can be unpredictable, and becoming seriously ill without your affairs in order can result in your wishes not being honored in addition to hardship for your loved ones.

Estate planning does not have to be complicated. At Mazza Law, our mission is to plan, protect, and preserve for clients across the greater Phoenix area. We focus on seniors, people with special needs, and vulnerable adults, endeavoring to offer compassionate, simple, and efficient means of protecting you or your loved one’s legacy. At Mazza Law, we have taken steps to offer our clients a safe way of creating and executing an estate plan without risking exposure to COVID-19. We offer numerous ways to accomplish this important task.

Do not wait to start safeguarding your future. Dial (602) 536-7609 or contact us online to schedule a free consultation. In light of COVID-19 and out of concern for the safety of our clients, all consultations will be conducted by phone, e-mail, or videoconference.

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