Estate planning during the pandemic

The COVID-19 pandemic has made 2020 a nightmare for many people, and inadequate estate planning can exacerbate the pain.

Having a will and estate plan is important for everyone, but it’s crucial as you approach retirement. You’ll probably have more assets at this stage of your life, and it’s important to consider who you would like to inherit them. You’ll also want to be certain that your spouse and family will be well taken care of if anything happens to you.

For many people, family is the point of estate planning.

“Preparing your estate is a real act of love — not for you, but for your family,” says Chas Rampenthal, general counsel for LegalZoom. “You’re telling them straight up, ‘I’m not going to put that burden on you to figure out what I wanted. I’m going to tell you what I want, so you don’t have to worry about it.’ ”

Without a will or estate plan, state law dictates how your assets are distributed after you die. “Not only can this be a costly process in many cases, but it can also be a giant burden on your heirs during a time of grieving and sadness,” says Taylor Schulte, a certified financial planner and host of the podcast Stay Wealthy.

Even with a will, going through probate (the court-supervised process of passing assets through a will or, in the absence of a will, through state law) can be time-consuming and expensive. You can avoid it by setting up a trust. The most common of which is a revocable living trust, which will allow you to change the terms if you want. A revocable living trust “sort of has this mystique about it as being only for the rich and famous, but that’s just not true,” says Samuel Nuxoll, an Ann Arbor, Michigan-based estateplanning attorney.

He suggests that most people — especially anyone who has children or owns real estate — could benefit from setting up a trust. Not only does a trust let you avoid probate and help ensure that your money goes to the people you choose, but it also lets you control exactly how the money can be used and appoint a person to take control when you’re not available.

“With a will, the executor is really just kind of an administrator who transfers assets from one person to another. But a trustee is more of a decision-maker,” Nuxoll says. “They’re standing in your shoes and making decisions you would want to make if you were still around to make them.”

After you set up your estate plan, you need to review it at least annually.

“A will, a trust, an estate plan should be a living document,” Rampenthal says. “When doing New Year’s resolutions, that’s when I go back and take a look. Has anything changed? Should I be looking to update my will and my estate plan?”