Helpful Estate Planning Advice For NYC Residents During Coronavirus (COVID-19)
Times have never been more uncertain because of the coronavirus (COVID-19) pandemic. The global virus is having a major and intrusive impact on millions of New York City residents, medically and financially. COVID-19 has brought the lives of many to a standstill. Despite this pause, the need for estate planning is now higher, more than ever.
Estate planning is the smart and responsible choice, in this dynamic and always challenging world. There is also a medical aspect to estate planning in which your medical decisions are pre-selected by you through various tools. As a NYC probate lawyer, I always urge clients to have their estate plan ready before it is too late. If you haven’t got around to planning for sickness or death, the current pandemic warrants your attention. The following some key instruments you should be arranging ASAP:
Power of Attorney (POA)
A power of attorney (POA) is a simple, yet so effective, document that allows you to designate another individual (ie agent) to oversee your financial matters, in the event that you are unable to. It can be used to access bank accounts to pay certain expenses while you’re undergoing surgery, or more involved as selling your real estate, in the event that you are abroad and can’t return in time for the closing. These powers and appointment must be reduced to a writing; oral agreements are not honored by banks and other institutions.
Depending on your needs and the complexity of the POA, this impressive tool can cost anywhere from $300 to $1,000. But, be without a POA and fall seriously ill, a guardianship proceeding will cost you thousands of dollars and linger in courts for months.
With proper and restrictive language, you set the limitations. Here’s an example of how a power of attorney can be used during the coronavirus:
Jerry’s sister is hospitalized for a high fever. She is being monitored extensively. Although she is bedridden, she is aware and conscious of her surroundings. She has a real estate closing scheduled for April 10, 2020. With social distancing rules and self-quarantine, she can’t possibly attend the closing. However, her absence can subject her to a massive financial loss. With the current climate, who knows when the buyers will be able to close again. The solution is quick and simple: she can appoint Jerry as the power of attorney to attend the closing in her place. The POA language will be limited to the closing, nothing further.
Healthcare Proxy (HCP) and Living Will
A healthcare proxy (HCP) allows to you to plan ahead and name an agent to make medical decisions if you are unable to express yourself due to incapacitation.
Consider the following example: Mary is unconscious from a stroke. Her strict vegan values forbid her from consuming any drugs tested on animals, if a cruelty-free version is just as effective and readily available. Several years ago, she appointed her brother William as her healthcare proxy. Her desires and intentions are made clear to William in the HCP, and as such, he requests that Mary is treated with a vegan pharmaceutical drug, if available, as opposed to generic treatment.
With a health care proxy, you can decide ahead of time if you want to be provided with life-sustaining treatments, whether you want to be provided nutritional sustenance through intravenous devices, and whether you want to be kept on equipment that extend your life if you are no longer conscious.
Another example is Alfred. He’s fallen very ill because of the COVID-19. He is 92 years old. He has expressed in his HCP that if he needs to be put on a ventilator system because his own lungs cannot function at the bare minimum, he would prefer to opt out. In this instance, the healthcare provider along with Alfred’s appointed agent, would have a discussion regarding Alfred’s breathing capability.
Last Will and Testament
The most unfortunate results of the COVID-19 would be that of a fatal one. An untimely passing is never a good thing for anyone, especially when the decedent’s affairs are in a disarray. A last will and testament is one of the smartest investments you can have to make things easier on your loved ones. A last will and testament gives you the opportunity to make final financial decisions. You can disinherit heirs, name as many beneficiaries as your heart desires, nominate a guardian for any minor children, and designate an executor to run the show. The executor has a very important role, that’s why its crucial to put some thought in the decision. The executor oversees the transfer of your assets and manages accounts and businesses until an accounting and distribution is finalized.
As example of how a will can be useful during these turbulent times is as follows: Peter fell very ill because of the coronavirus. While still conscious and hospitalized, he decides to have a will drafted by an estate planning attorney. In his will, he appoints his brother as the executor, and directs that that his house be sold with the proceeds split evenly between his two children. His further instructs that his brother select the real estate broker and pay no more than 5% in broker commissions. Peter passes, but with a will in place, the family is not left scrambling. The brother files the will with the Surrogate’s Court and follows Peter’s wishes to the T.
Trusts
Trusts are very powerful financial tools that are widely to help protect assets. Similar to a will, you as the grantor decides how your assets will be distributed. A will comes into play only at death. With a trust, you can position it to go in effect during your life. A trustee is appointed to manage and oversee the disbursement of your assets. Additionally, challenging a last will and testament has become a common practice. However, challenging a trust requires an estate lawyer with advanced knowledge. Although no one is completely invulnerable to a contest in court, it’s a fact that trust contests are extra cumbersome and way more expensive than for someone to challenge a will.
To illustrate how creative you can get with a trust, here is an example to demonstrate the financial savviness that comes with this estate planning instrument: Mario owns a building that is worth $1.5 million. He’s had many medical issues over the years and COVID-19 has been another complication to add on to his already growing pile. His medical bills exceed $700,000. Without payment, he knows that a claim will be made on his most valuable asset – the building. Mario can create an irrevocable trust, place the building in the trust, and relinquish his ownership to the asset. The beneficiaries of the building will be his children. He can then file a Chapter 7 Bankruptcy. There is a look back period of several years when filing for bankruptcy, but assuming he gets the timing right, this asset stays with the family and he will not be obligated to pay for his accumulated medical bills.
Contact Us
Coronavirus (COVID-19) is sweeping through New York City in an alarming rate. The figures of those infected is not slowing down. The fragility of life is something to consider during such challenging times. There is no better time than now to invest into estate planning. Otherwise, strangers will be making decisions on your behalf that you may not find very agreeable.
If you need to speak to an estate planning lawyer, our law firm is open. Call us at (646) 233-0826. We service clients in Manhattan, Brooklyn, Queens, Staten Island, Bronx, Long Island, and Westchester.