Many Americans are now updating their estate plans, due in part to COVID-19. While the pandemic may prompt some sad reminders, creating or updating estate plans can provide peace of mind for you and your family.
But if you’re among those who haven’t done so yet, Martin Shenkman, an attorney with Shenkman Law, provided in an interview some tactics to consider.
Have Key Documents in Place
Many people focus on tax planning, but they should not ignore their estate paperwork. “It's really critical people address this,” said Shenkman. “And it affects 100% of people out there. It doesn't matter how much or how little wealth you have. You want to make sure that your documents and planning do what you need” them to do.
Shenkman said, “Don't just think about it. Do it. Writing little notes is of no use. You legally have to modify your documents. So make sure you implement the changes you want or they won't count.”
As for updating your estate plan, make sure elderly parents, or other loved ones have key estate planning documents in place as well, said Shenkman.
Note too that college-age children are legally adults so you cannot make healthcare or financial decisions for them. Be certain they have at least a healthcare proxy and financial power of attorney.
“This is a gap in most estate plans for most people,” said Shenkman.
Parents with college-age children who are 18 or older and living out of state don’t have a legal right to sign anything, said Shenkman. “If you need to transact business with their bank account or file a tax return, or, God forbid, they get sick and you have to make a medical decision when they can't do so you need a power of attorney for financial matters signed by the adult child and you need a healthcare proxy,” he said.
Many parents, said Shenkman, wrongly think they can continue to speak for their children. “But once they're 18, you don't have any legal right to do anything,” he said. “So, you better get documents in place.”
In addition, he said those documents need to be in place for elderly parents or relatives grandparents. Every adult needs basic documents, he said.
“If you have elderly parents that you're caring for make sure their documents are in place,” he said. “Because you're not going to be able to take care of legal tax financial matters or make medical decisions without the appropriate documents. And none of this has to be that costly or complicated, but it's really important to do. And too often that's all been neglected.”
Shenkman noted that the documents needed, such as a healthcare proxy and power of attorney, are also state-specific and he urged that those who might use an online service become educated about those documents before filling out and signing a form. Otherwise, he said, “it's like driving a car without taking driver's ed. It's not smart. So just get educated before you do it if you go that route.”
Springing Powers of Attorney
Shenkman notes that a power of attorney is a legal document in which you name a person called an agent to have the power or authority to take care of legal, tax and financial matters for you if, for instance, you become infected with COVID-19 and become hospitalized.
You need somebody authorized to take care of legal, tax and financial matters for you and the document that does that is the power of attorney, he said.
One type of power of attorney is immediate (it’s effective when you sign it) and another type is a springing power of attorney, which becomes effective only if you become incapacitated and cannot manage your affairs.
“If the document says your agent cannot act until you’re incapacitated, evaluate changing that to a new power that lets the agent act immediately -- i.e., it’s not contingent on the principal being disabled -- so that the agent can help you today,” he noted in his recent newsletter.
“The restriction of only being effective when you are disabled might make your form useless in the current environment as the springing mechanism often requires two physicians to evaluate you and sign confirming letters. That might be tough to obtain in the current situation.”
His recommendation if you have a springing power of attorney: Evaluate, ideally with your lawyer, if you can change it to an immediate power of attorney.
Intubation, Experimental Medical Treatments
There are at least four healthcare-related estate planning documents that you need.
One is a living will, which is a statement related to your healthcare wishes. “If you have any religious concerns, whatever faith you are, you’ve got to have a living will and tell people that, because don't assume anyone's going to know anything,” he said.
Another is a healthcare proxy or medical power of attorney. That’s a document in which you name a person, often a family member, as an agent to make medical decisions if you cannot do so.
A third document is called a HIPAA release. The was designed to try to protect private health information, confidential data. “So, unless you've authorized someone to see your medical records or communicate with your medical providers, they can't do it,” without a HIPAA release, said Shenkman.
“And unlike the healthcare proxy, (a HIPAA release) doesn't give somebody the right to make decisions, just to communicate,” he said.
And the fourth document is a DNR (Do Not Resuscitate) or POLST (Physician Orders for Life-Sustaining Treatment).
COVID aside, everybody needs those documents.
In the current COVID-19 environment, though, Shenkman recommends confirming whether your healthcare documents expressly prohibit intubation. “A lot of the standard forms have a blanket prohibition against intubation,” he noted.
But with COVID, intubation may be necessary to survive a bout of the virus, Shenkman noted in his newsletter. “This should be distinguished from a statement that you may not want intubation if in a persistent vegetative state or terminally ill with a short time to live. This might require revising your documents,” he wrote.
This is especially important for those who have a religious affiliation, he said, noting that “what COVID brought to light is how dangerous signing those blanket prohibitions (against intubation) are.”
Shenkman also warned against signing “boilerplate stuff” off the Internet. “Don't rely on boilerplate forms,” he said. “You need to be educated.”
Another COVID-19 consideration, according to Shenkman, is whether experimental medical treatments are permitted under your healthcare documents. “This might be critical to survival,” he noted. “For example, (the antiviral) Remdesivir might be viewed as experimental. You might modify your documents to expressly permit experimental treatments.”
In essence, you probably want to want to authorize your agent on your healthcare proxy and make a statement in your living will that experimental treatments are OK, he said.
In the past, if your healthcare agent made medical decisions, he or she would have been in the hospital speaking to your care providers and perhaps signing documents, according to Shenkman. “With COVID-19 being so contagious, and many hospitals overwhelmed, this is not practical,” he noted. “Consider modifying your documents to expressly authorize electronic communication of decisions by your agent: FaceTime, Zoom, electronically signed documents, etc.”
You also want to hold third parties harmless. “This is something that's never been addressed in any legal documents,” Shenkman said.
Of note, a sample clause might look like this:
“I expressly authorize my Agent to communicate decisions to any medical provider verbally, in person, by telephone, via email, via web conference including but not limited to such services as Skype, FaceTime, or in any other manner appropriate to the circumstances. Further, I expressly hold harmless any medical provider for relying on such communications of decisions and directions by my Agent. The express purpose of this provision is to foster decision making by my Agent in remote or indirect manners that may be necessary or advisable given whatever circumstances accompany such decision making.”