One of the constant fears related to Covid-19 is the possibility of incapacity, disability or death, and the financial impact on individual and family estates.
“Some people are very resistant to plan for such a contingency”, says Peggy Sheahan Knee. She calls it “the that’s-not-going-to-happen-to-me syndrome.” But the pandemic forced many to confront their lack of documents and to inquire about health care proxies, advance directives and durable powers of attorney.
“Whatever you do, try to get something in place. Don’t die without any will or testamentary document,” Peggy advises.
Soon after the pandemic hit, it became clear that the mechanics of traditional estate planning called for new approaches. For starters, New Jersey requires two live witnesses. “The witnessing part was challenging,” Peggy recalls of meeting clients and others out of the office, among other practice adaptations.
Estate planning concerns have been compounded by potential federal legislation, including measures that could reduce lifetime gift exclusions and exemptions for estate and generation-skipping taxes.
For example, Peggy notes, lawmakers are considering cutting the estate tax exemption from $11.7 million per person to $5 million or $3.5 million. “If you are in that $3.5 million to $5 million per-person zone or above, you really need to talk to someone,” she says.
Peggy also has been advising clients on potential legislation that would set a 50-year maximum term for generation-skipping trusts, such as dynasty trusts. If such a trust “is something you are interested in, do it now,” she says.
Hear more about the impact of Covid-19 and potential legislation on the practice of estate planning.
About Peggy Sheahan Knee:
Peggy Sheahan Knee is a contributing writer for LexisNexis – Practical Guidance and is the author of LexisNexis Practice Guide: New Jersey Probate and Estate Administration and a co-author of LexisNexis Practice Guide: New Jersey Elder Law. Ms. Knee has over thirty years’ experience in the areas of estate planning and administration, tax planning, elder law, and special needs planning. She is a past president of the New Jersey State Bar Association as well as the Northern New Jersey Estate Planning Council and frequently lectures for the New Jersey Institute for Continuing Legal Education. Ms. Knee is certified as an elder law attorney by the National Elder Law Foundation, an organization accredited by the American Bar Association.