How Estate Planning has Been Affected by COVID- 19

How Estate Planning has Been Affected by COVID- 19

The COVID-19 pandemic has changed life as we know it. The way we work, learn, eat, and play in Libertyville, IL, (1) and beyond might not return to normal for months or possibly years to come. The pandemic is also affecting estate planning in Illinois (2) in a number of important ways.

 

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Estate Planning is Shifting to the Internet

The spread of the coronavirus has forced the vast majority of office work to be completed at home with the help of high-speed internet. If you do not yet have an estate plan formulated or need your current estate plan altered, do not assume doing so is impossible simply because your attorney and financial advisory firm’s brick-and- mortar offices are closed.

These professionals are going to great lengths to provide estate planning services on the internet. So don’t put off your estate plan’s creation, update, finalization, and/or signing. It is still possible to make progress with your estate plan while socially distanced.

Meet with your estate planner, financial advisor, and other relevant estate planning professionals through a web-based videoconference, communicate your desires for the handling of your assets and let the professionals get to work on your behalf. The bottom line is if there is a will, there is a way, even amidst a once-in-a-century pandemic.

Estate planning professionals deserve credit for implementing creative solutions during this difficult time. Invest the little bit of time necessary to interact with your financial advisor, attorney, and other estate planning professionals and it won’t be long until your estate planning documents are created, signed and implemented. Once this work is complete, you will rest easy knowing you have done everything in your power to ensure your estate plan is truly comprehensive, guaranteeing your assets are distributed exactly as you desire.

 

Estate Planning Documents can Still be Created and Processed

Even if Illinois estate planning professionals are unable to meet with you through a video conference or in-person, they will make every effort to communicate with you through phone, email, and even text messages, if desired. Estate planning documents will be drafted, emailed to you for review, or delivered through traditional USPS mail, complete with tracked delivery service.

Signing estate planning documents amidst the pandemic is easier than most anticipate. There are several ways to sign these important documents. If you need a will created or modified, your attorney will conference with you about the many different options available to add your signature to the document.

If the two of you decide the signing will occur in the office, masks and gloves will likely be worn while you and your estate planning professional and his or her support staff maintain social distancing as best as possible.

It might also be possible to sign your will or other estate planning documents at your home while social distancing. In fact, some estate planning professionals are even going as far as providing drive-up service for clients to sign newly-created and modified wills.

Signing estate planning documents might not necessitate a meeting with your estate planner. In some situations, it is possible to sign these legal documents on your own in the comfort of your home. Your estate planner will provide instructions for the signing to

take place outside of the office. This approach might require the assistance of witnesses who are either neighbors or friends, to observe you as you sign the estate planning documents.

In fact, online notarization services are now available. Though this industry is fairly

new, it is gradually expanding to more states as the pandemic plays out. The temporary electronic notarization of estate planning documents is available in Illinois. (3)

Reach out to your estate planner to find out the latest on the state’s rules pertaining to online will signings.

 

Low-Interest Rates Facilitate Rewarding Estate Planning

The COVID-19 pandemic has brought about numerous changes, some of which make estate planning even more beneficial than it was prior to the outbreak of the virus. The historically low-interest rates have set the stage for financially rewarding estate planning along with enticing intrafamily loans.

The Applicable Federal Rate for loans up to but not in excess of three years was 0.91% as of April 2020. The rate dropped to 0.25% one month later. The interest rate on loans of 10 or more years in length decreased from 1.43% to 1.15% across this same period of time. There is also the opportunity to refinance current loans to these historically low rates.

As an example, the interest rate for grantor annuity trusts and charitable lead annuity trusts decreased to 0.8% this past spring. This rate is often referred to as the hurdle rate. If the underlying asset increases in value beyond the rate, there is the option of transferring the asset without taxation from one generation to another, or to charity. If you’re struggling with an appreciating estate, or wanting to gift to family and/or charity, now is a great time to consult with an attorney about your options.

When contemplating a complex gifting strategy, it’s critical that your estate planning attorney, accountant, and financial advisor collaborate together. These professionals will work on your behalf to minimize your risk, protect your assets, and create a truly comprehensive estate plan tailored to your unique finances and family.

 

Mind Those Retirement Funds During These Challenging Times

The reduced market values combined with a decreased income tax rate has opened the door for the tax-free growth of assets through Roth IRAs. If your estate plan includes assets in a traditional IRA, 2020 may represent a good time to consider a Roth conversion. However, if done incorrectly, a Roth conversion can lead to adverse tax and financial consequences. It is in your interest to meet with your financial advisor and/or tax advisor prior to making this important decision. Ideally, these professionals will interface with one another as well as your estate planning attorney to ensure their efforts are geared toward achieving the same overarching goal for your finances and estate plan.

At Prism Planning Partners, we are CERTIFIED FINANCIAL PLANNERS TM professionals committed to facilitating your important questions so that we can help you explore all of your many opportunities. We offer a broad array of financial planning and consulting services for our clients-including estate planning.

Contact us (4) today and let us illuminate your possibilities!

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Sources:
(1) State of Illinois Covid-19 response https://coronavirus.illinois.gov/s/
(2) How a financial advisor can help you with estate planning: https://prismplanningpartners.com/how-a-financial-advisor-can-help-you-withestate-planning/
(3) State of Illinois EXECUTIVE ORDER IN RESPONSE TO COVID-19 (COVID-19 EXECUTIVE ORDER NO. 12 https://www2.illinois.gov/Pages/Executive-Orders/ExecutiveOrder2020-14.aspx
(4) Contact Prism Planning Partners https://prismplanningpartners.com/contact-us/
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