Since the coronavirus pandemic shook the entire world in March 2020, virtually everyone has had to stop what they are doing — commuting, travelling and being caught up in the day-to-day. Almost overnight, this has caused most people to think long and hard about what’s important; although TikTok’s meteoric rise might be the exception that proves the rule.
Nowhere have we seen this to be truer than with our clients. Certainly, there is a fair amount of angst that occurs when the stock market goes down 30% in less than a month. However, we do get through this conversation, because deep down, we all know that the global economy will eventually recover. It might take years, rather than months, but most people fervently believe that this too, shall pass. And if you believe that, then the focus becomes on ensuring we have enough money set aside in cash and bond ladders to get through the crisis.
Once we get through this conversation with our clients, we discuss the things that have come to their attention as life has slowed down. More times than not, estate planning comes to the top of that list. And why not? After all, estate planning has the following qualities:
Proper estate planning is important, but almost never urgent.
If estate planning does become an urgent item on a to-do list, there is virtually nothing else on that list until it is done.
By now, the coronavirus has impacted virtually everyone, either directly or indirectly (through someone that we know, a mutual friend, or simply a touching story we heard).
As a caveat, we are not attorneys, and we do not give legal advice. We can give financial advice, tax advice, and investment advice. We also can read estate planning documents and point out layperson observations that the client might want to discuss further with estate planning attorneys. At no time, should this article be construed as any type of advice.
With that in mind, below are some of the more common estate planning questions we’ve heard from clients.
Estate Planning Question #1: Can we add estate planning to our agenda?
Most of the time, we establish client meeting agendas in advance. Almost every meeting contains an investment update, and the second meeting of the year usually covers tax planning. After the first year of working together, we usually revisit topics like insurance planning and estate planning every two to three years. These are usually topics that we put on the agenda, although we’ll gladly add any other focus items the client would like to discuss. Clients almost never ask to discuss estate planning, simply because it’s a topic most clients don’t want to talk about.
Over the past month, a significant number of clients have actually asked to put estate planning on the agenda to discuss. Many of these are from clients who want to make sure everything is up to date. However, a surprising number is from clients who felt that estate planning wasn’t the most important topic at the time we brought it up. Now it is.
And that’s okay. We always build time into our meeting schedule to talk about any topic our client feels is important. If it’s important to the client, it’s important to us.
Estate Planning Question #2: Are my beneficiary designations up to date?
While it’s a question we cannot answer, we can pull up a list of accounts with beneficiary designations and show the clients where they stand. At that point, the client can decide if they need to make changes, and we will always take the time to ensure the beneficiary designations properly reflect their wishes.
We also use this time to point out our fervent belief that client accounts should have primary and contingent (or secondary) beneficiary designations.
Estate Planning Question #3: Is it too late to update my estate planning documents?
If you’re able to ask this question, and you’re of sound mind, it’s probably not too late to update your estate planning documents. Of course, you might want to discuss this with your estate attorney. To our knowledge, most estate attorneys are still working and seeing clients during the pandemic, even if they’re seeing clients remotely from their home.
Normally, our clients want to use us as a sounding board for the changes they’re considering in their plan. Our conversations can set a softer tone for some of the more sensitive topics (and really, all of estate planning is a sensitive topic). Since we interact with clients more frequently than an estate planning attorney normally does, we can ask questions in a manner that helps our client shape their plan before they see the attorney. When they eventually talk to the attorney, the questions are a little less daunting because they’ve already been discussed.
Estate Planning Question #4: What happens to my possessions if I pass away?
Simply put, there are two options here:
Everything that has beneficiary designations: This includes investment accounts, insurance policies, and banking accounts with payable on death designations, and goes exactly as directed, bypassing the probate process. Most financial assets (other than money you keep in a safe or under your mattress) falls into this category. You do not need an estate attorney to change any of these at any time. We help our clients with the accounts we manage, and we point out the accounts where the client might need to do this on their own.
Everything else: It depends. On-What-Your-Documents-Say. The estate of someone with a trust and pour-over will might have less difficulty than the estate of someone who passes intestate, like the artist formerly known as Prince. It also depends on the laws in your state, and whether your documents have been updated to reflect the latest changes in those laws.
There is no time like the present to ensure your estate plan is up to date. Since much of the world has been put on pause, there literally is probably no better opportunity to ensure things are in order. If you have estate planning documents, you should discuss them with your estate attorney and your financial advisor. And if you don’t, you should strongly consider putting your estate plan in place.