Estate planning during COVID-19: finding peace of mind in uncertain times

You have probably heard the expression the “new normal” a lot lately.  Society defines “normal” and we try to conform to it. When life does not conform to our definition of “normal,”  we need words to describe what is happening to us. Thus, the “new normal.”

The latest “new normal” is the onset of the novel coronavirus pandemic that is sweeping the globe and forcing people out of their comfort zones, sometimes drastically. Normal routine has been suspended, with authorities urging:

“Stay at home!”

“Stay at least six feet away from other people!”

“Do not congregate in large groups!”

This week my six-year old started to make these judgments: “They really should be social distancing,” he opined, watching a small group of neighbors with their toddlers running around together in a front yard.  When our children start using “social distancing” as a verb, you know something has changed.  

As a social species, our instinct to be with other people is hard to overcome. But coronavirus is ridiculously easy to transmit and very difficult to contain, so drastic measures being urged by government health officials are needed to keep the most vulnerable from getting sick.

Life was already complicated even before this “new normal” descended upon the world, as routine trials and tribulations of daily life seemed quite challenging enough. Now, for every one of us, the specter of serious illness, or worse, for us and our loved ones has made everyday living much more difficult. Few of us will ever adjust to the need for physical isolation from friends and family (and almost every other human, for that matter). Worst of all, perhaps, absolutely no one knows when life can return to something that we are able to recognize as “normal.”

With this uncertainty, it is important now more than ever to make sure your affairs are in order. As an attorney supporting wills and estate planning in the Capitol Hill neighborhood for the past several years, I wanted to share some thoughts on simple ways to get started.

First, make a checklist of what you have. This checklist should include:

1. A list of tangible assets, including real property, vehicles and any valuable personal property, such as heirlooms, that you may wish to pass on to descendants.

2. Insurance policies, including medical, life, and for any property.

3. Other financial records, including, but not limited to bank and securities accounts, retirement accounts and tax records.

4. Medical records, especially if you or anyone in your household is suffering from a continuing or chronic illness.

5. Property settlement, child support and alimony agreements, if applicable.

6. Estate planning documents, including wills, trusts, powers of attorney, and advance medical directives (living wills).

Then look at your checklist, take note of what’s missing, and try to figure out how to fill in the gaps. Out of all of the above items, perhaps the most overlooked are basic estate planning documents. A will? “I’m still young and have no assets,” or “I’m too busy raising a family to think of one.” An advance medical directive? “They’re for the very old or very sick, and I’m young and healthy.”

For a lot of people estate planning is for the rich or elderly. But it is never too early to execute a will, and everyone, healthy or sick, should have an advance medical directive just in case something unforeseen happens.

Just as everything else is more difficult at this point, we now arrive at this question:   How does one draft and execute estate planning documents in the middle of a pandemic that is keeping people at a physical distance? Technology has made it easy to interact without meeting face-to-face, so drafting estate planning documents is easily doable. To date, a few states have adopted laws to allow for electronic signature of wills--but here, as with most places in the U.S, estate planning documents need to be executed, with witnesses, in person.

As I think about how my practice will adapt, I realize that now is the time to be creative. Use multiple pens. Wear protective gear. Hold outdoor will executions standing more than six feet apart. But in these uncertain times, this is something that we can still do to claim some peace of mind. 

If this resonates with you, please be in touch. I am still accepting new clients, and I particularly enjoy working with my neighbors. I understand the constraints we all have on our time -- particularly with children out of school and the need to educate them at home -- and am pleased to offer virtual consultations whenever you may have a free moment. And while the stay-at-home orders are in effect, I will send detailed instructions on how to execute your documents yourself. My initial consultation is free, and my fees are commensurate with the complexity of the matter and ability to pay.

If you are interested in a Will and/or a Living Will (also known as an Advance Medical Directive), trust, power of attorney, or an estate plan, please contact me at pyabut [at] prylaw [dot] com, or visit my website at  http://www.prylaw.com.

This blog is an advertisement for the Law Office of Philip R. Yabut, PLLC, and the information in this post is not to be construed as legal advice, nor does reading it form an attorney-client relationship. Please do not post confidential information in the comments section.

Philip R. Yabut, Esq. || 1411 H Street, NE, Washington, DC 20002 || (202) 670-2429 || pyabut@prylaw.com

Whither Obergefell?

In 2015, the Supreme Court of the United States defined a federal constitutional right to marriage in the landmark 5-4 decision Obergefell v. Hodges. When Donald Trump ran for President of the United States, one of the promises he made was that he will choose conservative judges to fill vacancies in Article III federal courts, up to and including the Supreme Court. Now, President-elect Trump will have one seat to fill immediately upon taking office, replacing the late Justice Antonin Scalia and returning the Supreme Court to a 5-4 conservative majority.

Ever since the Court ruled that there is a constitutional right to marriage in Obergefell, conservative groups have been clamoring to have it overturned, returning regulation to the states. They think they have an opening in a new Republican president with a slim Republican majority in the Senate. People in the LGBTQ community are now worried that marriage equality opponents my now try to overturn Obergefell and return the country to the uneven hodgepodge of laws that existed before 2015. While this now seems unlikely based on the current political atmosphere, the fear is real.

No matter what happens with the law, it is still prudent to have your estate in order. At the very least, you should protect your assets with a will and your medical decision-making with an advance medical directive (living will). Also keep your transfer-on-death account (e.g., life insurance, bank accounts) beneficiary designates up-to-date and consider having a financial power of attorney in place as a contingency for incapacity. In the unlikely event that Obergefell is overturned, having an estate plan in place will help turn back challenges to your wishes and distribute your assets to your loved ones as you alone see fit.

This blog is an advertisement for the Law Office of Philip R. Yabut, PLLC, and the information in this post is not to be construed as legal advice, nor does reading it form an attorney-client relationship. Please do not post confidential information in the comments section.

Philip R. Yabut, Esq. || 1411 H Street, NE, Washington, DC 20002 || (202) 670-2429 || pyabut@prylaw.com

Wills vs. Living Trusts

A common and basic estate planning dilemma involves choosing whether to create a living trust or to write a will. These two instruments are similar because they create mechanisms for the distribution of property after death. But they have very different structures and uses, which are important to note when creating an estate plan.

When determining whether to use a trust or a will (or some combination thereof) to distribute assets, you should consider the advantages and disadvantages of each instrument.

WILLS

Advantages:

1. Less expensive on the front end. It typically costs more to set up a trust than to draft and execute a will.

2. Governing law. The law of wills has more protections in place for probated estates than laws governing trusts.

3. Time limit for creditors. The probate court sets a deadline for creditors to make claims on an estate.

4. Maintain title on property. There is no need to transfer title of property to another entity to make a will valid.

Disadvantages:

1. Public record. Upon death, your will is filed in probate court and is available for anyone to view.

2. Expensive probate. Probate can be both slow and costly.

3. Incapacity of testator. A will is only effective upon death, and cannot create mechanisms if the testator were to become mentally or physically incapacitated.

4. Multiple probate proceedings for out-of-state property. If you die with property outside the state where the will is effective, that property must be probated separately in that state.

5. Loss of control over fiduciaries/guardians. While you can nominate your own fiduciaries and guardians in a will, the probate court ultimately has the final say and has the discretion to ignore the testator's wishes if he/she believes it's in the best interest of the estate or children.

LIVING TRUSTS

Advantages: 

1. Avoid probate. Living trusts dispose of property like wills, but without the money and time costs associated with probate.

2. Incapacity of trustee. A living trust can immediately transfer property to someone else in the event of mental or physical incapacity without a court order.

3. Privacy. Unlike a will, a trust instrument is not a public document.

4. Out-of-state property. There is no need to probate out-of-state property held in trust.

5. Control over fiduciaries. Since a court is not involved in trust administration, you have complete control over who you name as trustee.

Disadvantages:

1. Initial cost. Unlike creating and executing a will, drafting documents and setting up the trust can be expensive.

2. Loss of ownership of trust property. You must relinquish formal title to the property placed in trust to a new entity.

3. No cut-off date for creditors. Creditors do not have a time limit for bringing claims against your trust.

4. No guardians for minors. You cannot designate guardians for minors in a trust.

For individuals and couples with large or complex estates, a good option is to utilize some combination of the two.  A will is highly recommended for anyone with minor children wishing to make a recommendation of guardianship as well as for anyone wanting to distribute property upon their death without losing control of it in their lifetimes. Under the right circumstances, supplementing that will with a living trust can provide you the security of knowing that your wishes will be carried out without interference from a court. Regardless of the approach you choose, be sure you contact an attorney before proceeding because much can go wrong if your trust or will is drafted or executed improperly.

This blog is an advertisement for the Law Office of Philip R. Yabut, PLLC, and the information in this post is not to be construed as legal advice, nor does reading it form an attorney-client relationship. Please do not post confidential information in the comments section.

Philip R. Yabut, Esq. || 1100 N. Glebe Road, Suite 1010, Arlington, VA 22201 || (571) 393-1236 || pyabut@prylaw.com

Wills on the Hill

This past November, my wife and I had a our first child. We very quickly discovered the trials and tribulations of being new parents: lack of sleep, overnight feedings and diaper changes, uncertainty over the right things to do to soothe your child, and the virtual disappearance of a social life. The experience, as so many of you know, has been life-altering -- so very challenging but also extraordinarily rewarding.

As a new parent, I understand the impact that raising a child has on the daily schedule.  While caring for a newborn, finding time to eat (and shower!) can prove a challenge--the idea of tackling tasks beyond that may seem like a distant dream. As time goes on, these time commitments change but don't necessarily decrease. As a result, you may end up putting aside tasks that you meant to do.

And if you are a new parent, maybe you're thinking a little bit more about the future than you before. Will you have to find daycare? Where are the best elementary schools in your area? What happens if he or she gets accepted to Harvard?

And what happens if you die?

That last question is likely to be the last thing on your mind when you're young and single and invincible. But when you start a family, it becomes important to consider how they will be provided for if the unthinkable happens. Many people have pensions or retirement plans that automatically pass to a designated beneficiary upon death (be sure to keep them up to date!), or jointly own a house or car or other property with their spouse, so there is no question as to where these assets will go. However, that potentially leaves a lot of assets and valuables whose ownership would be in dispute. That's where a will comes in. A properly written and executed will informs everyone you leave behind of your last wishes and eliminates sources of conflict and confusion.

I have started a program called Wills on the Hill because I know the limits on time that parents face. While I can help draft and execute wills throughout Washington, DC, and Northern Virginia, if you live in Capitol Hill or nearby neighborhoods, I offer home visits for initial consultations and other meetings as needed.  Yes, I can do house calls during your child's nap time, on evenings and weekends, or whenever you may have a free moment.  

The rewards of this effort have been multiple for me. In the months that I've been offering this service, it has been a pleasure to fill a need within the community by easing the way for people seeking to secure their families' futures. On a more personal level, it has been wonderful to grow my practice closer to home, which allows me a bit of flexibility to peek in and check on my son's progress rolling over. So if this service is of interest to you, please review the resources on my site -- and as always, please contact me with any questions.

This blog is an advertisement for the Law Office of Philip R. Yabut, PLLC, and the information in this post is not to be construed as legal advice, nor does reading it form an attorney-client relationship. Please do not post confidential information in the comments section.

Philip R. Yabut, Esq. || 1100 N. Glebe Road, Suite 1010, Arlington, VA 22201 || (571) 393-1236 || pyabut@prylaw.com