The past 15 months have brought uncertainty and anxiety to millions of Americans. Due to the COVID-19 pandemic, economic recession and other events that transpired throughout 2020 and into 2021, people are rethinking their estate plans.
Erika Apelis, partner with Kohrman, Jackson & Krantz in Cleveland; Sandra Buzney, attorney at Sandra J. Buzney Co., LPA in Shaker Heights; and Joseph Kampman, partner with Ziegler Metzger LLP in Cleveland, said they all observed different tendencies among people when it came to estate plans.
Buzney said she noticed more people were coming in to get their estate plans done during the height of the pandemic.
“I would think maybe because people felt a little more fragile,” she said. “And it wasn’t just wills. I always focus on the powers of attorney, like for health care and finances. So, if they did get sick, they would have somebody able to take care of things, help them out, And help get their affairs in order. People felt more vulnerable and at risk.”
Kampman said the increased down time people suddenly had became a catalyst for them to review their plans, and consider their life and mortality as a whole.
“I think people had a lot more time on their hands for these types of things,” Kampman said. “The COVID situation, I think, caused people to consider issues like their mortality and if they have their estate plan properly in place, if it’s up To date, and that type of thing.”
Although Apelis said the number of people looking for estate plans and estate planning advice remained the same, the people who did come in were looking to be proactive, on account of the unpredictability that surrounded them.
“More clients and potential clients reached out to begin the estate planning process, or to update and finalize their plans,” Apelis said. “I think the uncertainty of the pandemic and the broad impact of the COVID-related diseases, illnesses and deaths really forced them into confronting those planning situations in a way that they probably wouldn’t have, had COVID not impacted that ... I think it really created more of an urgency for individuals to do planning than may have existed without a pandemic.”
Buzney said the past year also made people reflect on who they put down as their caretaker, guardian or beneficiary. Buzney gave an example of an older person who feels their spouse doesn’t have the capability to take care of them if they get sick, so they established someone else as their potential caretaker.
“It helped them look and ask if their spouse can still make decisions for them,” she said. “Or should they maybe have a trusted older child, trusted relative, or an alternate in place, just in case. ‘Can my spouse still make health care decisions for me?’ Because some people don’t look at these documents for years … and then also this past year certainly dramatically changed the lives of people that unfortunately lost a spouse. So they had to redo their documents, because their spouse was named but they are no longer with us.”
On top of world events, certain tax laws also changed or were in the process of being changed. Kampman used the example of the federal estate tax exemption. The exemption states that a person can transfer up to $11.7 million after their death without being taxed. A married couple can pass up to $22 million, according to Kampman. But he said this is due to expire in 2026.
“I think some of the estate planning we did, and some of the estate planning techniques that did come into play, were wealthy people who wanted to take advantage of the significant federal estate tax exemption that’s currently in place,” Kampman said. “Understanding that the exemption is going to be potentially reduced significantly in a couple years when the law sunsets.”