Estate planning during Covid-19
With people working from home and being surrounded by their spouse, children, and in some cases parents, the prospect of they or a loved one contracting the coronavirus and how it might impact their family, is a natural topic of conversation.
It is always best to be prepared and if that involves encouraging your spouse to discuss your estate planning, this is the time to do so.
Anyone making a Will should be exercising their own free will in doing so. Sufficient mental capacity is essential as a person must understand the nature of their assets, any claims against their estate and to whom they wish to distribute their assets. There must be extreme care and caution to ensure that there is no undue influence or pressure from other persons, so instructions must be provided while all faculties are in order.
You must decide who you wish to appoint as your executors. Essentially, they are your business managers after your death, responsible for applying for probate from the court if necessary, paying your debts and liabilities out of your assets and distributing the remainder of your estate in accordance with your Will. Your executors normally also become your trustees if there is a trust in your Will, for example where you need someone to manage your assets until your children reach adulthood.
The most difficult question to consider may be who you trust to look after your children, aside from their other parent, if you pass before your children reach adulthood. There should be appropriate conversations with your children, if they are old enough to understand, and the people you are considering appointing as guardians.
Special consideration should be given to the succession of a family business, and whether you intend for the business to continue, or if it is to be sold. If the former, you must decide who you wish to run it. If it is to be sold, you must determine how the proceeds should be distributed.
You must address who you intend to benefit from your estate, and whether you have any special requests about who receives what asset or how much from your estate, and/or at what age. To make those decisions, you must fully understand the assets that you own and whether you can gift them to someone else, bearing in mind that jointly held assets often pass automatically to a surviving joint owner.
As much time and money can be lost after a person’s death by executors having to search for assets, it is advisable to prepare a list of your assets. It should be updated, as circumstances change, and should include details of property, including that owned jointly or in the control of trustees, the location of deeds and any property that you have given away during your lifetime.
During this time of social distancing, there may be challenges or concerns around having your Will completed and executed. It can be prepared and sent to you by post or electronically for printing. The document should be signed by you in the presence of two independent adult witnesses who should not be your spouse, a beneficiary, or spouse of a beneficiary named in your Will.
If it is necessary to execute the Will while you are self-isolating, then extreme care must be taken regarding witnesses. If you are merely social distancing, then the Will can be signed in the presence of two witnesses in the same room but six feet apart. After executing the Will, you can then pass or slide it to your first witness to sign and they in turn can pass or slide it to the second witness to do the same. Each of you should have a different pen or wear gloves.
If you are in enforced quarantine, then witnessing your Will might be more difficult. Your witnesses could witness the Will through a glass door or window and sign the Will when it is brought to them.
Some countries, such as Scotland, have issued temporary guidelines to allow Wills to be witnessed by video conference, thereby respecting social distancing/quarantine orders and protecting witnesses. It has been reported that professional organisations in England and Wales are requesting that their governments consider doing the same.
In addition to the execution of a Will, it is also possible to execute an Enduring Power of Attorney, to cover the situation where you become physically or mentally incapable of managing your personal and/or financial affairs. Should you become incapacitated, without having executed an Enduring Power of Attorney, your next of kin would have to apply to be appointed as your Receiver by the Court.
Preparing your estate planning documents does not need to be a laborious task. Start considering what you have and what you would like to happen to your assets on your death, even if it means talking to your family frankly about your plans.
This is the time to contact an estate planning attorney and begin the process of deciding upon the best way to set out your wishes.
• Caljonah Smith is a Senior Associate in the Private Client&Trusts department at Appleby. A copy of this column is available on the firm’s web site at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.
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