Updating Your Estate Plan in the Time of COVID-19

Amid all the frightening and fast-changing news about the COVID-19 pandemic and its impact on lives and economic well-being, some have thought to review their estate plans. Is this a good time to update your estate plan? Any time is a good time for review, and an unanticipated consequence of Sheltering in Place may be that individuals will do so.

In general, we recommend that individuals review their estate plans at least every five years to make sure it still reflects the individual’s wishes and has kept up with changes in law. Regardless of how old your estate plan is, you should also review it after major life events such as a marriage, divorce, birth or death. The goal of any review is to make sure your plan still accomplishes your goals. The COVID-19 pandemic has helped focus the need for this review.

The first step is to re-read your documents, or at least the dispositive provisions. What should you look for to determine whether you should update your plan? You should confirm that the gifts you wish to make are still appropriate. Has your desire to make charitable gifts changed? Do you wish to alter the amount of any cash gifts? Does a particular gift no longer make sense, such as a gift for the education of someone who is no longer in school? If you have married since your previous plan, do you want to add your new spouse to your estate plan?

You should review your choice of fiduciary, i.e., the trustee of your trust and executor of your will. Make sure the people you have nominated are still willing and able to serve, and that you would still want them to serve. If you have nominated a friend with whom you have lost touch, or a family member who is too old to serve, you should name a new fiduciary. Other things to look for are more technical. If your estate plan is more than five years old, it may have been drafted with the intent to minimize the amount of estate tax you would pay. With the estate tax exemption currently at $11.54 million per person, you may no longer need to plan for estate tax. A new plan could be drafted to minimize capital gains tax if you no longer have estate tax exposure under the new, higher exemption amount.

The uncertainty caused by the coronavirus may be a reason for you to review your plan to see if it still carries out your wishes. The pandemic is a striking reminder of the importance of always having a current estate plan in place. We wish for all of you good health.