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5 Legal Documents You Need During a Pandemic

If you get COVID-19 or experience another unexpected tragedy, these crucial documents can help you and your family manage money and make essential decisions with more clarity and less stress.

By
Laura Adams, MBA
6-minute read
Episode #642
The Quick And Dirty

Make sure you have these five legal and emergency documents in place before a tragedy strikes to keep yourself and your family safe:

  • Last will and testament
  • Living will
  • Health care proxy
  • Power of attorney
  • Childcare authorization

As Americans grapple with how to stay physically and financially healthy during the COVID-19 pandemic, it’s critical to make sure you and your family have the right emergency documents. It’s much easier to prepare for a potential disaster than to recover from one that blind-sides you. After a tragedy occurs, it may be too late to make critical decisions.

Let's talk about the different emergency documents and why you may need to create or update existing paperwork. If you get COVID-19 or have another unexpected illness or accident, these documents will help you manage your finances and make essential decisions with more clarity and less stress.   

5 emergency and legal documents to have during a pandemic

Instead of being caught off guard during a difficult time, consider if you should have these five legal documents.

1. Last will and testament

The purpose of a will is to communicate your final wishes after you die. Too many people don’t have one of these incredibly important documents because they mistakenly believe it’s something just for old rich people.

The fact is, every adult should have a will. If you die without one, the courts decide what happens to your possessions, not your family.

The fact is, every adult should have a will. If you die without one, the courts decide what happens to your possessions, not your family.

And once you have a will, don’t forget to update it periodically to make sure it addresses all your wishes, assets, and beneficiaries. Critical life events—such as getting married, divorced, having a child, or losing a spouse or partner—should trigger you to update your will.

If you’re starting from scratch, make an inventory of your assets—like bank accounts, investments, real estate, vehicles, expensive belongings, and sentimental possessions—and decide what you want to happen to them. You can list beneficiaries for specific items, like who gets a piece of heirloom jewelry or an artwork collection. You can also create distribution percentages, such as 50 percent of the value of your assets go to your partner and 50 percent to your only child.

In addition to dealing with your possessions, a will allows you to name a guardian for your minor children.

In addition to dealing with your possessions, a will allows you to name a guardian for your minor children. And don’t forget to leave instructions for what you want to happen to your pets, digital assets, intellectual property, and business assets. You can create a plan for your funeral, such as where you want to be buried and whether you want your organs donated.

Someone must carry out your final wishes and legal details. You can name a designated family member, friend, or attorney to be your “executor” and handle all the arrangements. Depending on the size of your estate, this can be a challenging and time-consuming task. So, make sure they’re capable and willing to do the job.

The bottom line is that having a will makes death easier for the loved ones of the deceased. It can help keep peace in your family by settling disagreements, minimizing bureaucracy, and even saving your heirs from unnecessary expenses. You don’t need a lawyer to create a will, but if you have a high net worth or many different types of assets, it’s a good idea to hire one.

2. Living will

In addition to a last will, you also need a living will. This document specifies what you’d want to happen regarding your end-of-life care. It would help if you were unresponsive for an extended period or in the final stages of a terminal condition.

Having a living will makes your wishes clear when you’re facing death. It’s an essential guide for family and doctors who might need to know if you’d want to extend your life by artificial means or to die without any interventions.

3. Health care proxy

When it comes to your health care, another critical document is a health care proxy. You might also hear this called a health care power of attorney or a health care surrogate. In it, you designate someone to make medical decisions for you when you can’t.

Imagine that you’re in an accident or come down with a severe illness and become mentally incapacitated. Having a health care proxy allows the person(s) you choose as your representative to make medical decisions for you or admit you into a health care facility.

Having a health care proxy allows the person(s) you choose as your representative to make medical decisions for you or admit you into a health care facility.

You might want to name two proxies in case one isn’t available when you need them. Consider who you’d trust with your care and discuss the responsibilities and your wishes with them.

Some hospitals won’t allow medical professionals to disclose any information about you—even to your health care proxy—unless you have a HIPAA (Health Insurance Portability and Accountability) medical privacy release. Your family needs to speak to your doctor about your medical situation without creating a legal problem for the doctor, so consider having this legal document as well.

4. Power of attorney

Even if you don’t need a designated proxy to make medical decisions for you, you likely need someone you trust to help with other types of decisions, such as managing your finances or legal affairs. Creating a power of attorney (POA) allows another person to stand in for you as an agent if you’re incapable of making routine transactions, such as paying bills or signing contracts.

You can use it power of attorney any time you’re not capable of doing something like selling real estate, making insurance claims, filing taxes, or making financial decisions.

There are different kinds of POAs, but the most common is a durable power of attorney. You can use it any time you’re not capable of doing something like selling real estate, making insurance claims, filing taxes, or making financial decisions. You can also create one or more limited powers of attorney, which name people to act on your behalf for specific transactions during a limited period.

Having a POA is how the financial end of your life can run smoothly if you become incapacitated. It’s also a tool for giving someone the authority to manage nearly any aspect of your life if you’re unavailable or don’t have time to handle it yourself.

5.  Childcare authorization

If you’re the parent of a young child, you should have a childcare authorization. This document can address a variety of situations, such as whether your child’s school or daycare can release them to another individual.

You can use this authorization to allow someone else, such as a partner or nanny, to temporarily make decisions for your child in your unexpected absence.

Do you need emergency documents if you’re married?

Don’t make the mistake of thinking that you don’t need emergency or legal documents because you’re married. While a spouse may be able to make some crucial decisions for you, you could both die or become incapacitated at the same time.

Let’s say your spouse is in a coma in the hospital due to a disease or accident. If you had a financial hardship and needed to sell assets, such as jointly owned investments or real estate, it could be difficult. Each of you would have to authorize the transaction.

Married couples and domestic partners should give each other power of attorney to avoid having financial restrictions during a crisis. And each of you should have wills and healthcare proxies.

Therefore, married couples and domestic partners should give each other power of attorney to avoid having financial restrictions during a crisis. And each of you should have wills and healthcare proxies.

Also, consider what would happen to your minor children if you and your spouse were in an accident together. It’s critical to name a guardian in your will, so the court doesn’t appoint one for you that you may not like.

Where should you keep emergency documents?

Keep your original signed legal documents safe, such as at your attorney’s office, in a fireproof safe, or a bank safe deposit box. Also, maintain copies of everything at home in case you need them at night or on the weekend. You should scan and upload them to a cloud-based storage service, such as Dropbox or Evernote.

Do yourself and your family a favor by getting all your emergency documents created as soon as possible. If you already have them, put an annual reminder on your calendar to make any necessary updates. You’ll feel at ease knowing you’re as prepared as possible for the unexpected. Your emergency documents make sure that you and your children’s future is protected no matter what happens.

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlersbook is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.