Estate planning in a socially distanced environment

Posted On: OCTOBER 2020

Estate planning in a socially distanced environment

As we continue to recover from the COVID-19 pandemic and much of the economy reopens, the “new normal” demands continued social distancing in many areas of life. What does this mean for estate planning? Clearly, estate planning is as important today — or arguably more important — than ever. But how do you plan your estate and execute critical documents if you’re uncomfortable with face-to-face meetings or are required to self-quarantine?

Fortunately, many estate planning activities can be done from the safety of your own home. Following are some options to consider, but keep in mind that requirements vary significantly from state to state, so it’s important to discuss your plans with us.

Most planning can be done remotely

There are definite advantages to meeting with your advisor in person to talk about creating or updating your estate plan. But these discussions can be conducted in video conferences or phone calls, and document drafts can be transmitted and reviewed via email, secure online portals or even traditional “snail mail.”

Several options for signing documents

Traditionally, estate planning documents are executed in an attorney’s office in the presence of witnesses and a notary public. In-office document signings are still possible with appropriate precautions, such as wearing masks and gloves and practicing social distancing. But there are other options that allow you to avoid traveling to an attorney’s office and that minimize the number of people involved. The options available depend in part on the type of document being signed:

Wills. In most states, a typewritten will (as well as a modification or codicil to an existing will) must be signed in the physical presence of at least two witnesses. Typically, those witnesses must be disinterested — that is, they don’t stand to inherit or otherwise benefit under the will. But some states permit family members or other interested parties to serve as witnesses. In those states, it may be possible to conduct a will signing at home (with instructions from your attorney) and have members of your household witness it. If disinterested witnesses are required, you might have friends or neighbors observe the signing from a safe distance (in your backyard, for example). In some states a will can be valid without witnesses, if “clear and convincing” evidence is provided in court, after the will-maker’s death, to prove its validity.

What about notarization? Wills are usually notarized as a best practice, but in most states it’s not required. However, wills are often accompanied by a self-proving affidavit, which must be notarized. A self-proving affidavit is a sworn statement, signed by the will-maker and witnesses, that affirms the will’s validity. It’s not required, but it can streamline the probate process. One strategy for avoiding the presence of a notary (assuming online notarization isn’t an option in your state) is to sign the will without a notary and then arrange for the parties to sign a self- proving affidavit in front of a notary when it’s safer to do so.

Another option in some states is a “holographic,” or handwritten, will, which generally doesn’t require witnesses or notarization.

Trusts. In many states, you can sign a trust document without witnesses or notarization, and it may even be possible to sign it electronically. One potential strategy for avoiding traditional will-signing requirements is to sign a holographic “pour over” will that transfers all assets to a revocable trust, which can accomplish many of the same objectives as a traditional will.

Powers of attorney and health care directives. Depending on your state, it may be possible to sign a valid durable power of attorney (for financial or legal matters) without witnesses or notarization. This isn’t advisable, however, since notarization usually confers presumptive validity, making it more likely that the document will be accepted by financial institutions or other third parties.

Health care powers of attorney or advance directives generally must be signed in front of witnesses, although typically they’re not required to be notarized.

Monitor legal developments

Requirements for signing estate planning documents have been evolving in recent years, and the COVID-19 pandemic may accelerate the process. A few states permit electronic wills (e-wills) and online notarization, which makes it possible to execute these documents without the need for physical interaction with anyone. These technologies are still in their infancy, but they’re being considered by lawmakers in many states.

Even if your state doesn’t allow e-wills or online notarization, be sure to monitor recent legal developments. A number of states have considered temporarily permitting online notarization or electronic signatures during the public health emergency.

Sidebar: Beware of do-it-yourself estate plans

In a time of social distancing, it may be tempting to explore one of the many do-it-yourself (DIY) tools for creating an estate plan. Software or online tools that automate the creation of wills, trusts and other documents have a certain appeal, but they also present some significant risks.

The requirements for executing estate planning documents are complex, vary dramatically from state to state and are subject to change. Many DIY solutions fail to meet these requirements or to keep up with changing laws, which may jeopardize the validity of your plan.

The best DIY tools may comply with applicable laws and be kept up to date. But while they can help you create individual documents, they can’t help you see the big picture. Creating an estate plan means determining your objectives, making critical decisions and coordinating an array of carefully drafted documents designed to achieve those objectives. And doing so effectively requires professional guidance.

© 2020