Estate planning risk, compliance and COVID-19

Some people might see the title here and think this is an odd title: Estate planning risk, compliance and COVID-19. However, issues like compliance go with estate planning just like they do anything else.  My oldest friend is a consultant in the energy industry for Deloitte & Touche LLP.  Actually, Howard Friedman’s official title is Leader of Enterprise and Regulatory Compliance Services for the Energy Sector. That’s a mouthful! 

Sure, on the one hand he’s a kid I was riding my Big Wheel around the block with back in 1975 or so. Back in the days when mom and dad said “be home by dark” but they didn’t even really enforce that. Heck, that was in first grade. Our independence only grew from there. However, this is not a blog about riding our Big Wheels or listening to Vin Scully on the transistor radio.  Howard sent me a link to his latest article and I provide that link here

His article is entitled Energy industry risk, compliance, and COVID-19. What on earth does that have to do with the California Probate law?  As I read his article I realized that many of the concepts he spoke of are probably similar to a lot of industries. Sure there will be some nuanced differences but really a lot of the risks of COVID-19 apply in California probate law, estate planning, and trust law just the same as they do the energy industry.

I started with his title, Energy industry risk, compliance, and COVID-19. I simply changed to Estate Planning risk, compliance, and COVID-19.  Does that really work?  Yes, let’s discuss.  A key distinction is that Howard advises energy companies whereas our law firm, when dealing with estate planning, are dealing with individuals. Though we are advising from a different angle the issues really are similar.

One of his first paragraphs is entitled Addressing regulatory and political uncertainty.  Well, heck the estate planning world has lived in a state of political uncertainty for the last 15 years. Estate tax laws change, like the wind, depending on who is in power in D.C. It’s extremely important that you consider the political uncertainty when you do your estate plan and in particular for higher net worth clients. Currently the estate tax exemption is over $11m, at the federal level (much lower in some states), until that law sunsets in 2026. However, if the occupants of the White House change sooner could that change the law sooner?  You need to pay attention to this!

Another paragraph is entitled Preventing and detecting fraud risk.  I filed a new probate recently where my client was concerned that a person might try to file a fraudulent will. It happens. Hire an experienced estate planning law firm and hopefully the risk of fraud derailing your estate plan is low but it’s something to think about. It’s extremely prevalent on a related field which is financial planning. I have seen news stories that scammers are using the COVID-19 crisis as an opportunity to commit more fraud while people are not paying attention. So you need to pay attention!

His article then moves to actions the chief compliance officers (CCO’s), which in estate planning means YOU, so what can be done? Howard mentions Assessing the compliance risk environment for your organization.  In estate planning I would say this means having tight estate planning documents, prepared by an experienced and reputable law firm, and making sure trusted people have copies of those documents and/or know where the originals are stored.

Another paragraph says Re-assess and re-evaluate compliance related priorities just like everyone else.  In estate planning this might mean re-evaluating your plan. Do you still highly trust your trustees?  Do you still want to give money to the charities or individuals you named?  Are all your assets properly titled in your trust?

The simple point is whether we are talking about estate planning or advising a large energy company, during the COVID-19 crisis, there are a lot of similar issues. Don’t ignore your estate plan!  Failure to plan can lead to a costly and time consuming trip to a California probate court, among many other problems, after you die!

Plan ahead!

-John Palley



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