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Three Areas of Your Estate Plan to Review in Light of COVID-19

Although COVID-19 related restrictions are beginning to ease, many people continue to help slow the spread by staying home and self-isolating. There are still unknowns related to the pandemic and how it will play out, undoubtedly keeping us all on edge. Over the past few months, we’ve been forced to face fears of falling ill, losing a job, spending time alone, etc. With these anxieties weighing on your mind, it may feel as though there’s a sudden need to get your affairs in order, just in case. 

It never hurts to be prepared in the event that, for instance, you may need to be hospitalized for coronavirus or any other sickness. Thinking about falling ill or not being able to make decisions for yourself can be frightening, but having an estate plan in place can help ease your concerns. 

Many people are taking this time at home to update their estate plans, and if you don’t have one in place, there’s no better time to put it together. 

Estate Plan Documents To Review & Update If Necessary

Individuals over the age of 18 should have some level of estate planning in place.  A strong estate plan will include a Will, a Powers of Attorney for Property, and a Power of Attorney for Healthcare, and careful consideration of your account and property ownership and beneficiary designations.  We strongly recommend a "Just-In-Case" folder where your loved ones can easily refer to all of your financial, legal, and bank account numbers and representatives.

In light of the current pandemic, two of the most important documents to have up-to-date and on-hand are your medical and financial powers of attorney. For instance, if you’re quarantined in your home, admitted to the hospital or become incapacitated, you’ll need someone to handle your finances or make medical decisions on your behalf. With those in place, it’s a good idea to continue organizing a comprehensive estate plan that includes the following documents. 

1. Power of Attorney and Health Care Proxy

A power of attorney for property grants authority to carry on a person’s financial affairs and protect their property by acting on their behalf. This includes the ability to write checks, pay bills, make deposits, purchase or sell assets or sign any tax returns.

Similarly, a power of attorney for personal care grants the authority to make health care decisions on your behalf should you become incompetent or incapacitated. If you are over the age of 18 and do not have powers of attorney in place, your family members will need to request that the court appoint a guardian to take on these responsibilities.

Ensuring that you have named trustworthy and reliable individuals as your powers of attorney is key as you update your estate plan. If your current documents are outdated, implementing new ones should be on the top of your list.

2. Your Will

A last will and testament is a legal document that allows you to direct distributions of your property at the time of your death. A will also allows you to appoint an executor who oversees the distribution of your assets.1  This person will attend to your affairs after you pass, probate your will if necessary and file income and estate tax returns on your behalf. If you have children who are minors, you should also name a guardian for them in the will. 

Everyone has assets that must transfer after a person’s death, and without a will, there is no direction as to how and to whom those assets will pass. Distribution of your assets will be handled by the province and the court will decide on the best person to oversee the administration. This is similar to an appointed guardian in that if you don’t appoint one, a court will decide on the best person to fulfill this role.

3.  Account and Property ownership and Beneficiaries 

Another important part of your  estate plan is to review how your accounts are set up.   Are you able to name a beneficiary  on the account, and a contingent beneficiary?  Are your beneficiary designations on your RRSP, RRIF, TFSA and  life insurance policies up to date?   Have you considered life insurance or segregated contracts as a way of passing assets to adult children while avoiding probate fees and delays?  Segregated contracts can pay out to your beneficiaries either as a lump sum or as a monthly income stream.  This may be lower cost than establishing  a trust. A Living trust benefits you while you are alive and may also be beneficial to others, such as your spouse or children.  A Testamentary Trust is formed after death, as a result of instructions in your Will.   

Are your investment accounts, home and other property registered Joint with Right of Survivorship?  Keep in mind that if you have a joint asset such as a bank account, that will pass to the surviving joint owner if it is your spouse, yet recent court decisions have shown if the surviving joint owner is someone other than a spouse, the account or property could be subject to probate and litigation. 

Due to stay-at-home orders and social distancing practices, it may be more difficult to meet with your lawyer  in-person to prepare or update your documents, but many professionals have found ways to discuss or review documents electronically, limiting the face-to-face contact.   While some documents can be finalized virtually, wills need to be signed in front of witnesses, which means this step to finalizing your documents may need to be done in person.  

In summary, there is no time like the present to start reviewing your estate plan and making any adjustments with the appropriate professionals as needed.  Summarize all of your investment, insurance, banking, and legal documents in one place.  Making necessary and important changes now will likely benefit you and your family in the future.  Our joint advisor team is available by phone, email, and video-chat.  It's another way that we are here for you.

  • Elaine Kelly, MBA CFP, FCSI,  Senior Investment Advisor, Manulife Securities Incorporated
  • David Wyatt, BA, B.Comm, CFP, Senior Investment Advisor, Manulife Securities Incorporated 
  • Katlin Wyatt, BA, Investment Advisor, Manulife Securities Incorporated
  • Diana Kancko, Executive Assistant, Manulife Securities Incorporated
  • Terry Wyatt, Executive Assistant, Manulife Securities Incorporated
  1. https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/an_introduction_to_wills/
  3. https://www.consumerreports.org/cro/2013/11/how-to-create-a-bulletproof-estate-plan/index.htm
  5. https://www.americanbar.org/groups/law_aging/resources/coronavirus-update-and-the-elder-law-community/notarization-in-the-age-of-covid-19--the-status-of-states/
  6. https://manulife.digitalagent.ca/documents/55322/0/joint+inv_trs_mk1973.pdf/1e374fc0-f0b4-4e85-aa8d-c201f75b4a76

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.