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Core Documents to Review During a Pandemic

Estate planners have an important role to play to help clients navigate the uncharted possibilities of COVID-19.

For the first time in recent history, mortality is at the forefront of humanity’s collective conscience. The global COVID-19 pandemic that erupted earlier this year brought with it an increased risk of severe illness and death, forcing many of us to stop and consider the possibility of our own incapacity and death and whether we and our families are adequately prepared. Many are now grappling with difficult questions estate planners contemplate on a regular basis: who decides whether to pull the plug; how are bills paid during a period of incapacity; and who will be responsible for minor children after death? No doubt, trusts and estates practitioners have mainstay documents—wills and revocable trusts, powers of attorney (POAs) and advance health care directives—to answer these immediate concerns and prepare clients and their families for every possible scenario. These tried-and-true foundational documents have served well under normal circumstances, yet the pandemic has brought into sharp focus other concerns that should be reviewed and, to the extent necessary, incorporated into core documents. Let’s explore some thoughts on how to re-examine these staple documents in light of COVID-19.

Wills and Revocable Trusts

Since this past March, much of the discussion about wills has focused on the mechanical aspects of properly executing documents in a socially and physically distanced manner. However, practitioners also should consider the substantive content of their clients’ wills in light of the continuing pandemic. Aside from urging clients to examine their existing documents to confirm that they continue to reflect their wishes, it may be prudent to evaluate other substantive aspects of these core documents. Due to the many current travel restrictions, clients may want to select fiduciaries, especially guardians of minor children, who are in close proximity to relevant family members.

Even the choice between a traditional will and a pour-over will with a revocable trust isn’t immune from reconsideration. As always, one of the many benefits of the pour-over will with revocable trust structure has been to ease the administrative burden involved in the probate process. Many courts across the country have temporarily halted nonessential functions, and while some of those courts have resumed in earnest, continued and additional shutdowns will place significant burdens on an already backlogged system. One of the many potentially detrimental effects of a growing backlog is an increase in the number of frozen estate accounts, the worst economic crisis since the 1930s and, arguably, the worst in history. Practitioners who still prepare traditional wills for the bulk of their clients should seriously consider shifting their practice to pour-over wills with revocable trusts to avoid unnecessary delays in the probate process. Furthermore, clients should fund their revocable trusts as soon as practicable so they can actually benefit from the structure.

What’s more, the pandemic and volatile markets may have severely and deleteriously affected clients’ assets. This may result in some clients wanting to change their dispositive wishes, such as revised amounts passing to specified or new charities and revised amounts passing to family members based on how the pandemic has affected a beneficiary. Other clients currently may not be subject to federal estate tax or should incorporate portability into their planning. Similarly, as asset values fluctuate in an unpredictable economic environment, practitioners should look at clients’ plans that rely on fair market values (FMVs) at a point in time to evaluate whether those plans remain viable. For example, consider language in a will or revocable trust that funds a trust with a pecuniary amount less the value of any trusts created for the benefit of the beneficiaries as of the date of funding. Alternatively, consider an equalization provision based on the FMV of an asset or set of assets that another beneficiary receives. Each of these examples is based on an assessment of an FMV that may be constantly shifting or temporarily depressed. If the value is assessed prior to some economic or market normalization, the estate plan may leave one beneficiary with too much or too little or trigger other unanticipated consequences and, thereby, increase the odds of estate litigation.

The ways in which standard bypass trust plans fund credit shelter trusts (CSTs) and marital trusts may no longer function as intended for those clients whose wealth has experienced a significant decline in value or whose portfolio is susceptible to volatile swings in value. For example, suppose a client’s wealth has declined from $20 million to $10 million during the pandemic without any assurances that the value will recover. If the client dies with a standard bypass trust plan in place, the CST could be funded leaving nothing to fund the marital trust. The client may want to ensure that the surviving spouse receives preferential treatment or income from the CST. If the trusts also have differences in the remainder beneficiaries or powers of appointment granted, the draftsperson should consider whether funding the marital trust with a smaller amount than anticipated, including nothing, would frustrate the client’s intent. These clients may want to consider disclaimer or portability planning instead. Similarly, a significant decline in the value of the estate may result in generation-skipping transfer (GST) trusts fully funded and little or nothing available to fund non-GST trusts, which could complicate the children’s generation’s ability to access the trusts.


A POA instrument is particularly useful when a client hasn’t used a revocable trust to facilitate asset management during her lifetime. In tailoring a POA to a client’s needs, however, practitioners should carefully consider the extent of powers granted to an agent and when the grant of authority should become effective.

Absent express authority in the POA instrument, many states restrict an agent’s ability to make more than de minimis gifts on behalf of a principal to protect principals from the unscrupulous acts of deceitful agents. For this reason, gifting authority shouldn’t be automatically included in every instrument, but instead should be carefully drafted to fit within the principal’s estate plan and take into account the client’s circumstances and goals, as well as the applicable state and federal tax exemption amounts. If a client is uncomfortable giving the primary agent broad gifting authority, consider other solutions that still implement the client’s personal and transfer tax planning goals. For example, gifting authority could be restricted to certain thresholds, such as the annual exclusion amount or the lesser of the client’s remaining federal and state transfer tax exemption amounts. Gifts by an agent could require the agreement of numerous agents, including a trusted advisor, and the agent may be altogether prohibited from making transfers to himself or to his immediate family members.

The client could delegate to the agent other powers designed to accomplish tax planning goals, including the authority to engage in other types of estate-planning transactions, disclaimer planning and even the power to change beneficiary designations or ownership of non-probate property. These provisions could be of tremendous value in carrying out an estate plan when a client becomes ill during the planning process.

To facilitate the agent’s activity, the POA instrument also could grant the fiduciary authority to access the principal’s digital assets, including access to email accounts, digital currencies and online account credentials, which typically aren’t included under the more general grants of authority. The instrument should specifically identify the extent of the agent’s access (and any lack thereof) to the principal’s digital assets in light of whether the relevant jurisdiction has enacted the Revised Uniform Fiduciary Access to Digital Assets Act. Most importantly, the instrument must clearly express that the authority granted to the agent is considered the principal’s lawful consent under applicable statutes. Access to digital assets is particularly important for entrepreneurial clients to give the agent authority to access company computer systems, online banking and payroll and benefit systems.

Because of the travel restrictions in connection with the ongoing pandemic, clients may wish to reevaluate their selection of agents under a POA instrument, as it may be preferable to nominate agents physically situated close to the principal or her business. However, given the various and fluctuating stay-at-home orders, the principal should specifically empower the agent to undertake any of the authority granted under the POA by electronic means. The principal also should consider holding third parties harmless for relying on such a provision in accepting the agent’s authority.

Advance Health Care Directives

Usually, one important factor for clients to consider when executing a health care proxy is the agent’s physical location. Proximity of the agent can be crucial in case of a medical emergency. For example, say a client has a daughter who lives nearby and a son who lives far away. All other things being equal, it may be sensible for the client to designate the daughter as the primary health care agent—if the client suddenly suffers a major health issue and is hospitalized, the daughter should be able to travel to the hospital and carry out her duties as agent more readily than the son.

During the age of COVID-19’s unpredictable travel bans and shifting quarantine requirements, the importance of proximity is even more pronounced, especially if an agent lives far away enough to require travel by plane. These concerns can be mitigated if the client consents to allow agents to communicate by electronic means. This should include communications by video so the agent can virtually converse with doctors and perhaps obtain a visual depiction of the client’s medical condition.

Many living wills include language expressing a desire to avoid intubation, usually in the context of an irreversible and terminal condition that manifests as a persistent vegetative state with no behavioral evidence of awareness (for instance, a coma). Living wills also often address the use of experimental medical procedures.

Some severe COVID-19 patients who require intubation have plunged into a coma, and some COVID-19 treatments have involved medically induced comas. And, it may not be clear how a do-not-resuscitate (DNR) order applies to a COVID-19 patient who rapidly falls into a coma. In addition, experimental therapeutics and procedures continue to drive much of the nascent and rapid medical progress in understanding COVID-19 and its most effective treatments.

In light of the novelty of COVID-19 and its treatments, clients should review their current advance health care directives with counsel and determine whether any changes might more fully reflect their wishes with respect to COVID-19.

In addition, clients should share their health care desires with their loved ones and designated health care agents so all involved parties can better appreciate the client’s expectations of their respective roles and duties. After these discussions, counsel can make necessary revisions to advance health care directives. If appropriate, this could include preparation of a rider or addendum to address specific COVID-19 concerns, such as providing that a DNR order won’t apply in the instance of COVID-19 hospitalization.

Other Documents

In the uncharted territory of today’s global pandemic, finding order in the chaos is paramount, and practitioners have an opportunity to help put their clients and families at ease not only by preparing foundational documents but also by helping organize these documents in an effective manner. After all, the best-laid estate plans are of little use if the dispositive instruments can’t be located or are otherwise unavailable when needed. It’s good practice for clients to keep on hand important documents, such as wills, revocable trusts, POAs, health care proxies and living wills.

Clients should assemble an emergency folder containing pertinent medical information in the event of the sudden onset of illness. This folder could include copies of the client’s health care proxy and living will. The client also may wish to include names and contact details for his next-of-kin and each designated health care agent, particularly if an agent’s contact information has changed since the instrument was executed. In addition, the client could include a list of current medications, health conditions and the names of any current health care providers. While the folder should be stored in a readily accessible place in the client’s home, perhaps near the front door or in an emergency suitcase, the client also may wish to provide a duplicate folder to a designated agent under the client’s health care proxy to ensure this information is readily available in an emergency.

Another planning item for clients to review and update is their beneficiary designations, especially because they govern the passing of non-probate assets and operate independently of a will. In addition, the Setting Every Community Up for Retirement Enhancement Act enacted in late 2019 curtailed the use of stretch individual retirement accounts by requiring a non-spouse beneficiary (including conduit trusts) to take distributions within 10 years after the death of an account owner. Previously, a conduit trust could be used to stretch distributions over the remaining life of a surviving beneficiary. Considering these recent changes in law, it’s prudent to review now the overall retirement and estate plans of clients, including any trusts that are named as an IRA beneficiary. 

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