The COVID-19 crisis continues to place a heavy burden on countless households throughout the country. To reduce its growth and spread, governments have implemented social distancing and lockdown rules. By slowing the infection rate, an encumbered healthcare system could treat those in critical condition while helping mitigate casualties.
But these measures have had an additional impact on personal and household finances across the country. Without the means to go work, and with non-essential businesses remained closed, millions of Americans are grappling with the uncertainty of financial ruin.
In the face of this pandemic, many have already lost their jobs and/or are out of employment options. To help families stay financially afloat, stimulus checks are still being issued. During these critical times, it’s imperative to begin crisis planning for the months and years ahead. This includes a game plan for what might happen, should you pass away prematurely.
What Happens to My Children If I Am Sick or Die?
During this crisis, the most pressing issue is death. While the chances of dying from infection are slim, mortality rate is considerable. Nonetheless, the COVID-19 crisis has claimed the lives of the young, active, and elderly.
As difficult as it is to grapple with the possibility of your death, it is important to make the right preparations. Dying is never neat and tidy, and can leave behind a mess of loose ends and legal questions. To address the most important issue, we need to turn to a will.
If you have young children, they will need a legal guardian should something happen to you. A will can not only help you put to paper who gets what, it also allows you to appoint a legal guardian. Young families and the elderly alike can benefit from a simple will, and in most cases, it’s not time-consuming or expensive.
If both parents die and did not appoint a legal guardian beforehand, the court will typically appoint those closest to the children – as long as they are deemed fit. Children over the age of 14 have a say in who their legal guardians should be, but the court picks who takes care of surviving minors.
Should you and your partner or spouse die, you will want a document that at least suggests to the court whom you prefer to be a legal guardian to your surviving children. You can pick close-by friends or family if you want to keep the kids within the community, and as close to where their parents used to live as possible.
A will also lets you determine how your belongings should be split between your loved ones. Estate planning documents, such as wills, are especially important if you are unmarried and/or if your child was from a previous marriage, as unmarried partners have no right to their partner’s property or children after death.
What Happens If I Get Too Sick to Make Financial Decisions?
The COVID-19 crisis is not an instant death sentence. Among cases with severe symptoms, hospitalization may include an extended stay in an intensive care unit, during which visits and potential interactions between the patient and their loved one are reduced or cut entirely.
If you are the head of the household and manage the finances for your family, then having someone act in your stead is critical. While wills ensure that things keep moving in the direction of your choosing once you have passed away, they do not go into effect until you are dead, and your estate is probated.
Durable Power of Attorney or Health Care Proxy
If you need a loved one to act in your name to make critical financial decisions, then you will need to name them as your health care proxy through a durable power of attorney. This document allows someone you trust to take care of your:
- Business investments and related financial capital
- Bills and monetary responsibilities
- Managing accounts
- Payroll and employee management
This estate planning document is used to give someone the ability to make medical decisions in your name, should you be incapable of responding to a doctor’s questions. If you have personal reservations about specific life-extending measures or treatments, you can create a living will.
Also known as an advance directive, living wills allow you to exclude treatments you find unnecessary. This type of will may be especially important to someone with a severe chronic condition, or certain religious beliefs.
Living wills can be used to reflect your interest in experimental treatments, or denote any relevant illnesses you might have, and how you wish them to be treated. If you already have such a document, you may want to revisit and amend it if the language is unclear, or not applicable in the context of a pandemic.
What Happens to My Property When I Die?
A last will and testament can let you leave behind instructions for whom is to receive what should you pass away. However, wills might not always be specific enough for your needs. A trust can be an alternative for complex estates with properties in multiple states or countries, or of considerable size. Trusts can be:
- Living or testamentary
- Revocable or irrevocable
- Amended to manage accounts for a child with special needs
- Paid out over years rather than distributed all at once if the beneficiary is a spendthrift
- Built to minimize or eliminate estate taxes
- Used to avoid creditors or the costs of a lawsuit
- Used to avoid probate
DIY Estate Planning vs. Hiring a Lawyer
Given the current COVID-19 crisis, it is tempting to resort to online drafting resources. While it’s inadvisable to seek out legal help in person, it’s equally inadvisable to opt for DIY estate planning services. Although you will likely find countless templates, there is no guarantee that they are error-free or even valid in your state or county.
Contact various local estate planning professionals to inquire about virtual consultations. Most law firms have already arranged for means to communicate and work with clients during COVID-19.