COVID-19 and Estate Planning – The reasons why you should have your will up to date
Without stoking the embers or fearmongering, the reality of COVID-19 and its disruption on our livelihoods is now an undisputable reality. Thankfully, the numbers and statistics of people passing away due to COVID-19 infections and complications are relatively small (at the time of writing, Australia had 167 deaths from a confirmed 15,304 infections, equating to approximately 1.1% of COVID-19-infected Australians passing away).
The unfortunate reality is that the situation is forcing Australians to consider illness, and possibly, confronting our own mortality. We hope never to have to do so, but sometimes it becomes inevitable, and so highlights the importance of having an up-to-date will and estate plan in place. For current purposes, our view is that it would be inappropriate to take advantage of current world events for promotional purposes. With this in mind, we hope that all Australians are taking the matter seriously, and adhering to medical and governmental advice regarding social distancing, personal hygiene, use of masks and other PPE equipment, and generally supporting one another through this event.
It is nonetheless important for all adults to – at least briefly – consider whether they have a will in place, and if that will is up-to-date and accurately implements your intentions should the worst befall you.
If you don’t have any will in place, then intestacy laws will apply determining who administers your estate, and distributes your estate according to a set of government provisions amongst your relatives (including setting out what proportion each relative gets). For more information regarding intestacy generally, see here.
If you do have a will in place, we would encourage that you at least briefly review that document and ensure that it is up-to-date. For example, under Queensland law, events such as your marriage, divorce, the end of a civil partnership or the end of a de facto relationship automatically revoke certain terms of your will. So if you have experienced any of these events, it may be necessary to update your will so it properly addresses your current circumstances.
Similarly, other events such as new family additions (e.g. children or grandchildren) may inspire a change in your will, to ensure that the new family addition is not unintentionally excluded from your estate under a will made prior to their arrival.
If any of these situations have occurred, it would be advisable that you at least briefly consider whether any changes are needed to your will to ensure that, should the worst befall you, your affairs are at least in order and up to date.
Thankfully, the mortality rate of COVID-19 is relatively low in Australia. However, for each person who has passed away, there are approximately 99 others who have been infected. Due to the relatively new appearance of the infection, the long term effects aren’t yet entirely known, however sources suggest that even after recovery, infected persons have long term (or sometimes permanent) health problems. For example, reports indicate long term damage to survivors’ lungs, heart and brain – the latter potentially causing confusion and cognitive impairment, or even being a contributing factor to strokes.
Again, without wanting to sound alarmist, this increased risk of long term health complications, as well as potential cognitive impairment, may prompt consideration as to who would look after your affairs if you were incapacitated for any substantial period of time, or if you lost capacity. An enduring power of attorney is a document by which you can appoint another person (your attorney) to act on your behalf. For more general information regarding enduring powers of attorney, see here. With health issues being currently so visible, we would suggest that anyone with a power of attorney review it to ensure it remains appropriate. If there is no enduring power of attorney in place, it is much safer to have one put into place before you get sick.
We express our support for community efforts in this difficult time, and sincerely hope that through cooperation and common sense, Australia – and the world for that matter – comes through this pandemic as quickly and as unscathed as possible. If you have any questions concerning estate planning, wills or enduring powers of attorney generally, we are able to assist. That being said, we hope our assistance is precautionary in nature only, and that we are not having to assist you in the administration of a deceased loved one due to this pandemic.
Stay safe and best wishes.
The O’Connor Ruddy & Garrett team.