Earlier this year I remember speaking to a friend who had gotten caught in Germany on his way back to Spain. It was March 13, a Friday, and he was weighing whether to test his luck. Spain had just declared a State of Emergency in response to mounting cases of Covid-19 and he wasn’t sure if it made sense to wait the crisis out in Berlin or rush home, knowing that doing so would mean submitting to the strict quarantine measures the Spanish government had imposed. Lucky for him, he chose the latter. Being a non-Spanish citizen, had he decided to stay in Berlin, he’d likely still be there as the Covid-19 pandemic has ground on for far longer than most of us would have imagined.
The unexpected severity of the moment we are all living teaches two important things: Friday the 13th is not always an unlucky day and preparedness is paramount. If earlier this year, when many still believed we’d be back to normal by summer, you felt no hurry to organize your affairs and implement an estate plan, by now you have hopefully learned better. Covid-19 continues to threaten not only peoples’ lives but their economic well-being, too. Protecting your assets is the responsible thing to do, both for your own peace of mind and for that of your family.
5 Ways an Estate Plan Protects You and Your Family from Covid-19
1. Your life’s work is secure.
At the time of writing, Covid-19 has killed more than 157k people in the US and while the odds are on your side—the oldest living person is Spain survived the virus, after all—no one is immune to risk. Instituting an estate plan now means your hard-earned assets don’t end up whittled away by probate or, worse, consumed by creditors.
2. Credit agencies can’t come after your estate.
A year ago, it would have seemed unthinkable that you might die at the same time as a loved one were to lose their business to bankruptcy. At present, this is all too possible. Businesses are tanking and the elderly are at elevated risk. A testamentary trust or similar estate planning vehicle protects your loved ones’ inheritance from landing in the hands of creditors at a time when an injustice of this proportion is a legitimate concern.
3. You protect your mental health.
Covid-19 is a respiratory virus and yet research continues to uncover its effects on a range of bodily systems, including the nervous system and heart. Besides, experts predict a mental health epidemic to follow in the wake of the current pandemic. Having a plan in place prevents anxiety from snowballing by providing you the solace of knowing you are as prepared as possible.
4. Your family can also breathe easy.
Taking proactive steps to protect your assets assists in relieving your family’s anxiety as much as your own. After all, a family meeting explaining your intentions and wishes is an essential step in the estate planning process. Doing this now not only prevents future squabbles but provides those you love the peace of mind of knowing you are looking out for them in this challenging present moment.
5. You might capitalize on fleeting opportunities.
With interest rates on intrafamily loans at stunning lows and Grantor Retained Annuity Trusts (GRATs) looking more appealing than ever, you might just make gains if you act quickly. Also, huge discounts on minority shares in limited liability corporations (LLCs) are predicted, meaning now is the time to revise your asset distribution.
Nobody would characterize the present as good times but that doesn’t mean it’s a bad time for everything. If you don’t already have an estate plan, now is the time to get one. If you already have a plan in place, now is the time to revise your setup.
Six months ago, few would have predicted that the US would be mired in an accelerating global crisis. Six months from now, things will hopefully be better but they may just be worse. Simply put, now is not the time for procrastination.