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In Times of Crisis: Seven Estate Planning Tips For Your Retirement

In Times of Crisis: Seven Estate Planning Tips For Your Retirement

The American College of Financial Services
May 11, 2020

A common topic these days among estate planning and retirement planning groups are “panic wills” that come up due to client worries over the possibility of a sudden death from COVID-19. Exacerbating the situation are stories in mainstream media about patients unable to communicate with loved ones and hospitals that, because of the current circumstances, are creating their own do-not-resuscitate (DNR) rules—even if they conflict with the patient’s wishes.

Your clients may be in a retirement planning situation where they feel compelled to quickly create or update their estate plan, and there are many things to consider that could help them in their quest. Every situation is different, but this overview of seven tips can help start the process that eventually leads your client to instituting the financial planning arrangements they want and need.


1. Talk to an attorney 


While many estate planning documents don’t require an attorney’s direct involvement, in many cases an attorney is the authority who can help assure the financial planning documents make sense for your client’s situation and are legally executed. And, while most of the documents needed in an estate plan are state-specific, be wary of articles found online that offer “general” estate planning information. There are many estate planning law firms that offer meetings via videoconference or phone that can be found and scheduled through their websites, making it easier to consult with legal professionals in these difficult times. 


2. Create a will


Your client can only have one valid will, and it should be created under the state laws of your domicile. In the current environment of stay-at-home restrictions, this can be a challenge. For example, your client’s permanent residence may be in Iowa, but they could be waiting out the virus at their second home in Florida. Iowa does not permit electronic wills; Florida does. Your client probably can’t create a valid Florida will in case they become sick there while maintaining their Iowa will for when they get back home. Again, an attorney is preferred to make sure your will and other financial planning documents are validly drawn, executed, and attested.


3. Create your Power(s) of Attorney (POA)


A Power of Attorney is a legal form designating who you want (your “agent”) to act on your behalf if you are unable to do so, typically due to your physical or mental incapacity. It is a good practice for your retirement planning client to have a POA for their financial matters and a POA for medical decisions. Unlike a will, it is possible to have POAs in multiple states. For example, your client might create medical and financial POAs in Florida as a “just in case” while they wait out the virus in their second home. The POAs are best created using the formalities of the state in which your client anticipates their use. An advantage of POAs is that this is an area where a do-it-yourself approach may work. Many states provide a standardized fill-in-the-blank POA template. If your situation is such that you feel you need to create these POAs, search your state’s online resources for more information. POA forms can often be obtained through state government agencies, the bar associations, or certain educational and philanthropic institutions. And, if your clients are worried that stay-at-home orders may keep them from getting signatures and notarization, check to see if their state has made exceptions to the standard rules. Many states are temporarily instituting procedures for electronic signing.


4. Complete HIPPA releases


If you’ve designated an agent under your medical POA, but that agent doesn’t have HIPPA authority to be told your medical conditions, your client could run into a serious roadblock. The rules of HIPPA are intended to protect one’s health information privacy – and they are strict. Health and Human Services has issued some very limited HIPPA waivers to combat COVID-19, but many feel they leave out key guidance. It’s better for your client to execute a HIPPA Release Form for their POA agent in advance. Fill-in-the-blank release forms are available online. 


5. Create a living will / advanced directive


Decades ago, individuals had almost no say over life-sustaining treatments. The physician decided on things like resuscitation, feeding tube insertion, or the use of a respirator. Many states have moved aggressively to permit advanced directives where the patient indicates how and when they want these kinds of life sustaining measures to be used, if at all. In some cases, the advanced directive is part of the POA process. In general, living wills include provisions related to end-of-life care and require the maker's and witnesses' signatures to make them legally binding—but the process varies among the states.


6. Learn your state’s POLST process


A Physician Orders Life-Sustaining Treatment (POLST) order is a process that began at a national level in 1994. It was put in place to improve communication of a person’s decisions to accept or decline medical intervention and to ensure those decisions were honored. All states have some sort of POLST process in place, but the procedures vary greatly. Particularly in these times, when there is a concern about overly-burdened hospitals, your clients may want to know what procedures they can have to assure their wishes will be honored during a medical crisis. Advanced directives and POAs are important, and generally should be filed with your client’s physician and hospital, but the POLST order is in many medical emergency situations the most important form the healthcare worker sees. In many states, the law mandates that the form be in bright colors and be placed in the patient’s medical chart.   


7. Have a document storage plan


Estate planning forms are of little value if it takes too long to find them. Your POA will mean nothing if the physician has already unhooked the ventilator. The will indicating your burial wishes will be moot if the document is sealed in an inaccessible safety deposit box. There are many ways to assure your retirement planning clients have easy access to documents for POA agents and loved ones, but the most important consideration is that it be handled in advance. And there are two areas where storage may not work as well as many assume: first, safety deposit boxes can be a problem because of bank rules concerning access after the box holder’s death. Second, while virtual vaults are all the rage in estate and financial planning, they may not have the legal usefulness the client expects: for example, a will stored in a virtual vault may not be legally binding in states that require an original signature paper will. 


Gain the Confidence Knowledge Provides


These are stressful times, and it is understandable that your financial planning clients’ interests in their retirement plan may be morphing into concerns about their estate plan. Be sure to check in on your clients’ emotions before they make major personal finance decisions, guide them in creating their financial plan, and encourage them to communicate their plans to their loved ones. Finally, once the threat of the coronavirus calms down, work with your clients to review and update any plans made and documents signed during this pandemic.

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