Expect the Best, But Plan for the Worst

August 24, 2020
By Cheryl Langston, CFP®

Earlier this summer, a family friend was involved in an accident, which required emergency surgery. His family was not close and he had no estate planning documents. While his situation ended well, it could have been far worse, given that he had no instructions, no one to act on his behalf, or permission to share health information. As COVID-19 ravages on, many folks wonder what they should do to protect themselves and their families. An orderly estate plan can make a difficult time such as this a little easier. Here are some documents that help in estate planning:

A last will and testament is a legal document directing the transfer of one’s assets at passing. A will names an executor who disposes of the decedent’s property, according to the will. It also names a guardian for minor children. If you do not have a will when you pass, you died “intestate.” Your state’s probate court decides on beneficiaries of your estate and the guardian for any minor children, which may or may not be according to your wishes.

While not a legal document, a letter of instruction is a private document that can augment a will. A letter of instruction provides guidance on how to settle your estate. For example, it can outline your preferences for funeral care. Some individuals write messages, or direct who receives specific items. It can detail asset locations, how to secure assets, or other important documents.

For financial matters, a durable power of attorney (POA) is a legal document used during your lifetime to help protect your property if you are not able to make these decisions. A POA names a trusted representative for matters such as paying bills, overseeing your investments or filing taxes. A POA can be immediate, effective at signing, or, springing, meaning that it is effective at incapacitation.

A living will states a person’s desires pertaining to medical treatment, particularly regarding end of life treatments. A durable power of attorney for health care (or health care proxy) appoints a representative to make medical decisions for you. A do-not-resuscitate order (DNR) is a doctor’s order stating you do not wish to have CPR performed if you go into cardiac arrest. Separately, consider a do-not-intubate order (DNI), which disallows intubation, a common occurrence in COVID cases.

There are many types of trusts that may help in estate planning. Trusts can provide continuing asset management, ease in asset transfer, better control of assets, privacy and can help clients avoid certain taxes and/or probate costs. A common type of trust is a living trust, also called a revocable or inter vivos trust. A living trust is set up during your lifetime. Typically, you serve as grantor and trustee, meaning you establish and manage the trust. Assets you own, such as your home or investments, can be retitled into the trust. As trustee, you control and can use trust assets, amend the trust and add or take assets out of the trust. You can even end the trust. If you become incapacitated, a successor trustee manages trust assets according to the terms of the trust. 

If estate planning seems daunting, take one step at a time. Do your current estate documents convey your wishes? Do you have an executor who is still able to serve? Review beneficiary designations on accounts. Are they current and do they coincide with your estate planning documents? For example, is an ex-spouse named on a life insurance policy? If you need a new document, contact an estate planning attorney. Not sure who to contact? Ask friends, family or your trusted advisors for recommendations. Despite COVID-19, there are safe meeting options. Many attorney offices offer phone calls or virtual meetings. Documents can be signed by drive through and notarized remotely.

Once this pandemic is behind us (and it will be), individuals still need a viable estate plan. An estate plan review can provide great peace of mind. We all hope to live long and healthy lives, but one lesson from this pandemic is that we never know when our estate plan will be put into action.

Meet Cheryl Langston, CFP® »

Important Disclosures

  • West Financial Services, Inc. (“WFS”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. You should carefully read and review all information provided by WFS, including Form ADV Part 1A, Part 2A brochure and all supplements, and Form CRS.

  • Certain information contained herein was derived from third party sources, as indicated, and has not been independently verified. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to WFS.

  • This information is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept. These materials are not intended as any form of substitute for individualized investment advice.