COVID-19 Effects on Estate Planning

COVID-19 Effects on Estate Planning

The unpredictability of the COVID-19 pandemic has forced many clients to consider the ‘what if’ situations that were previously avoided. As a result, we have seen a surge of interest in either the preparation of estate plans from scratch or updating documents currently in place.

COVID-19 requires many to isolate, quarantine or in the worst case, receive treatment for the virus. Practically, this poses many challenges especially from an estate planning perspective.

Currently, the law requires that for a will to be valid, the person signing the will and the witness to the signature must be physically present and must sign at the same time – this is just not feasible for many in this current climate.

Industry professionals are asking for Government intervention to overcome these unprecedented difficulties. At the time of writing, no formal regulations have been enacted in Queensland, however, it is expected that updates are to come in the following weeks.

Clients must avoid the temptation to prepare and/ or sign estate planning documents themselves in the absence of legal advice. To do so would be exposing oneself to risks that could lead to considerable legal fees at the expense of your estate.

We appreciate that current restrictions are directly affecting the preparation of wills and estates documentation which rely heavily on person to person interaction and witnessing protocol. We wish to assure clients that are anxious in this time, that we remain open for business and our office hours are unaffected.

Our estate planning team has developed a wills self-execution procedure to assist clients currently in self-isolation or quarantine. Our procedure follows strict compliance requirements to ensure the validity of all wills executed from our clients’ home.

 

The effects of COVID-19 on wills

The rising cases of COVID-19 around the world serve as a timely reminder of the significance of attending to your estate plan before they become urgent or futile.

If you pass away without a will, state-based legislation will govern who administers your estate and who your estate is left to (which may not necessarily be who you want).

On the other hand, for those who have wills in place but have experienced significant life changes (for example, divorce, marriage, new children or grandchildren or if your executor is no longer suitable) if you pass away without updating your will, your estate may not be distributed in accordance with your wishes.

Another consideration is the impact COVID-19 has on estate assets. Consider this common scenario; someone wishes to leave their whole estate equally to their children and they do so by gifting separate assets such property, businesses or shares. The impacts of COVID-19 may have significantly decreased the value of these assets in comparison to when the will was originally prepared. The issue then is that some children may now be worse off or not provided for at all.

Where you pass away and this happens, children may make an application to the court (called a Family Provision Application (FPA’)) for further and better provision. The impact of an FPA claim is that significant legal fees may be incurred in defending the claim and the entitlements of the other beneficiaries may also be significantly reduced as a result. Further, the estate cannot be finalised until any litigation is resolved and therefore resulting in significant delays.

 

The challenges posed by COVID-19 in preparing wills

The current social distancing laws present unprecedented issues for estate planning. Restrictions on human interaction are problematic for assessing capacity and witnessing requirements – both of which are required to ensure the validity of wills.

Calls for government intervention have been made and as a result, the COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 (NSW) passed on 24 March 2020 which includes a regulation-making power to allow documents such as Wills, Powers of Attorney, Appointments of Enduring Guardian to be executed in a way other than what is currently required.

On 22 April 2020, the New South Wales Government announced regulations to allow the electronic witnessing of wills, enduring powers of attorney and appointment of enduring guardian documents in New South Wales. Further updates from the remaining States are anticipated shortly.

Where clients, due to self-isolation or quarantine circumstances are unable to locate two independent witnesses to execute their wills, it may be more preferable to sign the will in the absence of witnesses as opposed to not signing the will at all. This method is known as informal execution. Where clients choose to informally execute their wills, the only way to have it “validated” after death is for an application to be made to the Court. Court applications are expensive and there is no guarantee that the Court will declare the informally executed will as valid.

We would only recommend that this course of action be followed in exceptional circumstances. The client would be required to follow strict procedures (such as video taping themselves or arranging a video conference with a legal professional to observe the signing) to give themselves the best prospects of validity in the eyes of the Court.

We urge clients to not take any action in relation to informal execution without seeking legal advice first.

 

How Ramsden Lawyers can assist you during this time

While the COVID-19 pandemic directly impacts how we would normally conduct our wills and estate matters, we are committed to working with our clients to achieve the best outcome available during this time.

In addition to the safeguards Ramsden Lawyers has implemented to minimise the impact of COVID-19, we are actioning the following measures to directly assist our estate planning clients;

  • ‘meetings’ to take instructions for the preparation/ or updating of estate planning documentation will occur by telephone, video call or our online questionnaire via Settify our online web-based app;
  • Quotes are to be provided over email or post only;
  • Estate planning documents will be prepared by Ramsden Lawyers staff while adhering to social distancing laws or working remotely;
  • Where clients wish to execute their estate planning documents from home, we will provide in-depth instructions and will be available by telephone to walk clients through the process;
  • We are able to facilitate ‘drive-in’ services, where a Ramsden Lawyers staff member may witness clients’ documents while the client remains in their car. This service is strictly subject to availability given the ever changing environment caused by COVID-19.

We are tailoring our delivery of service for clients affected by COVID-19 on different levels. If you require assistance preparing or updating your current estate planning documentation, contact us on 1300 749 709 to see how we may best assist you.