Maryland Estate Planning Guide During the Coronavirus Epidemic
Maryland Estate Planning Guide During the Coronavirus Epidemic
COVID-19, the coronavirus, has disrupted all our lives, all over the country. The Maryland estates and trusts law firm, Franke, Sessions & Beckett, is no exception. For the protection of our existing and new clients, as well as of our lawyers and staff, our physical office is closed to clients/prospective clients and we are working remotely.
Whether you are staying at home or otherwise limiting social interaction, you can still engage in meaningful estate planning. In fact, you can create or revise a Will, a Revocable Trust, a Durable Power of Attorney or a health care directive without leaving your home as long as you have access to audio-video conferencing on a smart phone, tablet or home computer. Even without this capability, you can accomplish your important estate planning goals while continuing to protect your health.
Effective Estate Planning Can Still Be Implemented
Although we are working remotely, we continue to service existing and new clients, not just giving advice as to the various estate planning options, but we are also able to produce estate planning documents that can be put in place for you now and be effective under current Maryland law despite the restrictions on your freedom of movement and limited social interaction.
Depending on your circumstances, how that estate planning is accomplished, and the nature of the documents used to effectuate the plan will vary. The “how” and the “what” will depend on the extent of your physical social isolation, the magnitude of the signing formalities required by the document, and your access to audio-visual technology. Regardless of your situation, however, there are still significant opportunities to implement effective planning under Maryland law.
We have adopted new approaches to our estate planning services during the coronavirus health emergency. Although similar techniques will come into use elsewhere, the methods and techniques discussed here are from a Maryland estates and trusts perspective and may or may not work in other jurisdictions.
Our Pre-Coronavirus Procedure
Before the current health emergency, our standard procedure involved a high degree of client contact. Prior to our first meeting at our office, we generally would email or mail an initial questionnaire with the initial two pages designed to gauge the new client’s objectives. Our initial client conference was usually in person with only the client or clients present. That meeting was in our office with two lawyers for one to one and a half hours. If the new client was not able to come to our office because he or she was in a nursing home or assisted living facility, a lawyer would meet with the new client at the facility to discuss the issues. The primary reasons for this procedure was (i) so that we understood the client’s concerns and needs fully, (ii) so the client had an opportunity to hear from us various approaches to reaching their goals, and (iii) so that the estate plan that we created would work accomplish its intended purpose. The attorney-client interaction continued through the drafting process and we usually oversaw the signing of the final documents.
Our Post-Coronavirus Procedure
Our goal is to duplicate the high degree of client contact but operating remotely. The pre-meeting questionnaire can still be sent electronically or mailed to the client. Unlike before, however, we will need the client to return it to us prior to our initial meeting instead of bringing it to that meeting. The meetings – initial and follow-up– will be done remotely. To the extent the client has internet access, we can simultaneously review documents together in real time.
Witnesses, Notaries, and Other Document Formalities
In Maryland, different estate planning documents require different levels of signing and attestation/certification requirements. A Will, for example, generally requires the testator’s signature and two witnesses who sign in the presence of the testator. Health Care Directives generally require 2 witnesses. Powers of Attorney require 2 witnesses and a notary, who can also be one of the witnesses in some circumstances.
Although not requiring third party witnessing or notarization, the traditional Revocable Trust agreement may require some of these formalities in order to fund the trust (for example, a deed transferring a residence into a Revocable Trust generally needs to be notarized). An alternative form of trust—the “Declaration of Trust”—can be used to work around some of the witnessing and notary requirements, but only if drafted carefully in anticipation of possible future chain of title issues. (This “Declaration of Trust” alternative will be discussed below.)
Logistics Will Drive Planning Decisions
Estate planning during the coronavirus epidemic will depend on your circumstances and your assumptions. Prior to the epidemic, a lawyer from the firm would oversee the execution of all documents and we would provide the witnesses and the notary.
In the current situation, we anticipate providing our clients with several alternatives to accomplish their estate planning goals. We can still work with you remotely to establish an estate plan, including creating “final” documents, with several different options depending on your urgency and whether it is safe to be in the presence of others to witness and/or notarize documents.
Option 1: Wait It Out
One option is to prepare the documents but defer the execution of those documents until a later date (I.e. when social distancing practices are relaxed or no longer in effect). Unfortunately, none of us can determine when that later date may be. Few new clients would probably want to proceed in this fashion. Some existing clients with their basic plan in place who wish to merely tweak that plan may opt for this approach.
Option 2: Supply Your Own Witnesses
If you are in a position to supply two witnesses for documents safely (and please read and consider the CDC guidelines to determine risk), a traditional Revocable Trust agreement, a Will and Health Care Directive can be prepared meeting your requirements and be effective upon completion of the execution process. Remotely we can walk you and your witnesses through the process in real time to guard against error. A Power of Attorney, however, would still need a notary. (Ironically, the General Assembly passed a new Notary Act that will permit remote access to a notary but deferred its effective date until October 1, 2020 and it does not work for many estate planning documents). As we discuss below, by executive Order during the COVID-19 health emergency remote notarization is now permitted. A pour-over Will works in conjunction with a traditional Revocable Trust to assure complete funding at death. While the Revocable Trust itself does not need witnesses or a notary but, as noted, the pour-over Will requires witnesses and lifetime funding may still need a notary for retitling deeds. However, other types of assets—non-retirement brokerage accounts, for example—can often be transferred into the Revocable Trust without a notary acknowledgment.
Option 3: Use Traditional Workarounds
(Declaration of Trust as Will Substitute)
For those limiting social contact either by self-quarantine or because of government mandates, there are less traditional options. As mentioned above, an alternative to the traditional Revocable Trust agreement is the utilization of a “Declaration of Trust.” This does not require witnesses or a notary. It does not require ancillary documents (such as a deed) to effectuate transfer of assets to the trust. While Declarations of Trust were infrequently used (in a pre-coronavirus world), they are still legally valid. Indeed, the Maryland Trust Act recognizes a Declaration of Trust as one of the methods for creating trusts.
Drafting of a Declaration of Trust must be done with care to minimize future disputes over what assets are covered by the trust. Although not technically required, best practice would be to change account designations electronically if possible. Because you would want to be able to create a successor trustee to manage your assets in the event you lose the ability to do so, best practice would also be notifying any bank or investment company of the trust terms and that the Declaration of Trust controls the assets subject to the trust. Properly crafted, a Declaration of Trust can act as a “Will Substitute” and a surrogate Power of Attorney without needing any witnesses or a notary.
(Signed but Not Witnessed Health Care Directives)
As noted above, Health Care Directives generally require witnesses. The Maryland Health Care Decisions Act, however, recognizes any “authentic expression” of a person’s health care wishes as having legal effect. Therefore, even an unwitnessed Health Care Directive is enforceable to the extent that it expresses the signer’s wishes. Our office uses an enhanced version of the state form Health Care Directive that certainly creates such an authentic expression.
Option 4: Remote Signing with Remote Witnesses and Notary
Under two emergency Orders, Governor Hogan enabled estate planning documents can be witnessed remotely and notarized remotely. We can structure finalizing estate planning documents using these remote techniques if a client has access to audio-visual applications on a smart phone, tablet, or home computer. With such technology, all traditional documents can be executed remotely. If this technology is not available to a client, we would utilize the work-around techniques.
Planning During the COVID-19 Epidemic
Creating effective estate planning for clients during the coronavirus can be accomplished regardless of the degree a client is practicing social distancing. As with all estate planning, these new challenges call for the creation of a plan fitting the client’s needs and, given the current environment, require thinking outside of the box.
The Maryland estates and trusts lawyers at Franke, Session, and Beckett, LLC have limited our physical office hours during the acute phase of this national health emergency. We are, however, working remotely and we remain committed and able to serve our existing and new clients with necessary estate planning services. Please go to our website Home Page for the contact link or call 410-263-4876 to get in touch with our office.