Preparing for Death, Illness or Incapacity: How Covid is Forcing Unprepared Young Adults to Deal with Estate Planning
Coronavirus has forced Americans to face the "what if" scenario that many people are uncomfortable discussing with their loved ones. These circumstances have led to an increased interest in estate planning.
Unfortunately, not everybody has had enough time to get their acts together. Some people have succumbed to COVID-19 or been incapacitated without an estate plan. This has left many family members, especially the young, unprepared to deal with estate planning.
Here are some estate planning elements that young adults have had to grapple with amid the ongoing pandemic.
Medical decision making
COVID has continued to remind us that we should always be ready for incapacitation. Some families have had a COVID case where a family member has been too sick to speak and make critical decisions for themselves.
Family members may have a rough time addressing significant medical concerns without a document such as a living will or health care power of attorney.
Living Will
You have the right to decide about your medical care. A living will is an advance directive that you could use to specify the type of medical care you would or wouldn't prefer in the event of your incapacitation.
Some COVID patients without a living will have become unconscious for long periods of time. Loved ones have had to ask doctors to put these patients on life support machines which might be against the patient’s wishes.
With an advance directive, you can let family and doctors know whether to put you on a life support machine, feeding tube, and other related forms of care.
Health Care Directive
Incapacitated COVID-19 patients without a healthcare proxy have made their unprepared adult family members go to court to request the judge to appoint a guardian to help make vital health-related decisions.
A Health Care Directive is a legal document in which you assign a trusted person with the responsibility of acting as your agent (or a proxy) to help express your wishes if you can't speak for yourself.
Financial decisions
Young adults with incapacitated COVID infected family members without a power of attorney in place have also had it rough. A durable power of attorney would have specified the person with the legal authority to decide on behalf of the incapacitated patient.
Business owners and other persons with substantial financial responsibilities have left their unprepared children not knowing what to do after contracting COVID-19 and getting hospitalized. With a power of attorney in place, the family would have known how to go about things such as:
· Paying taxes
· Paying the person's medical and other bills
· Operating the business
· Representing the person in court
· Managing the person's retirement and other accounts
· Collecting rent, selling, buying, and maintaining the person's estate
Inheritance decisions
Young inheritors have had to wrestle in court over the sharing of the deceased's estate.
A will would have allowed the deceased to direct the distribution of their estate. It would also have allowed the person to nominate an executor to oversee the distribution process.
Everyone has a property that needs to transfer after death. If you fail to leave a last will and testament, you won't be able to direct how your possessions will pass and how your heirs will share it. The court and state will then appoint someone to supervise the administration of your wealth. The last will and testament also allow you to nominate a trusted person to act as a guardian or trustee for your minor children.
A Trust allows you to reserve and direct the dispersal of money for relations who may be unable to manage finances due to reasons such as disability or young age.
Again, the unexpected COVID-19 death of people without wills has forced the court to step in and appoint a guardian to care for the needs of the left behind minor children.
Who Will inherit your property If you Die?
If COVID-19 comes with the worst-case scenario and you pass on, how will your estate be divided?
Some assets, such as retirement accounts and pay-on-death bank accounts, will go to the person you named in your last will and testament. (It might be time to review your beneficiaries' names!). Any wealth that you don't assign to a designated beneficiary will be distributed according to the state laws.
If you plan ahead, you decide who gets your possessions.