If there is a poignant reality the pandemic has taught us all, it is to expect the unexpected. Since early 2020, our lives have been turned upside down. We have seen dramatic shifts in the stock market, civil unrest, a great resignation from work and endured a lot of time at home. As of late February, the virus has taken over 970,000 lives in the U.S. alone, which has had a heartbreaking and life-altering impact on so many families.
When it comes to unexpected events, there are few more difficult than the death of a loved one, and it can become more strenuous without a comprehensive estate plan in place. As we all adjust to the new normal and find ways to protect ourselves and each other, take this opportunity to understand the estate planning basics that ensure you and your loved ones are prepared for unexpected death.
Here are some essential considerations for estate planning in an era of uncertainty.
Ensure You Have an Updated Will
Your will is a legally enforceable document that indicates how property or assets will be distributed after your death. Many people are concerned about where their assets will go after they die, and it is, therefore, important to have a will (for more details, read The Essentials You Need for an Estate Plan) and that you update it at regular intervals.
Even if your planned asset division is relatively simple, a will is a necessity to protect your assets and the loved ones who will receive them.
This is also a good opportunity to inventory your assets and take full stock of what needs to be considered within your estate plan, from real estate and automobiles all the way down to items like tools and clothing. If you are working with a financial planner, they will likely go through a checklist with you to complete this process. If not, there are free checklists available online.
Prepare a Power of Attorney for Financial Situations
The power of attorney is a document of legal authority that allows an individual to act on behalf of another individual (usually a family member) in case of incapacitation or illness. This is particularly important as it relates to being able to manage financial transactions when an individual is unable to do so. In some cases, the power of attorney may also be able to execute certain duties after one’s death, particularly if there is no estate executor.
The bottom line is that having someone you trust with power of attorney capabilities in case of incapacitation, illness or death is a good safeguard for your assets.