How do the Los Angeles Wildfires Affect Estate Plans?
The devastating wildfires in Los Angeles and surrounding areas serve as a stark reminder of how unpredictable life can be. Beyond the immediate physical and emotional tolls, these disasters can have long-term implications for personal and financial matters, including your estate plan.
Here’s how wildfires and other natural disasters may impact your estate planning. We’ve also included a few reminders to help protect your heirs. Start by asking the following questions:
Are Your Documents Secure?
Wildfires can destroy homes and all the essential documents within them, including wills, trusts, property deeds, and powers of attorney. While we always recommend storing these documents in fireproof safes or secure, off-site locations like a bank’s safe deposit box, many of our clients neglect to do so. It’s not because of a lack of desire, it’s mostly due to procrastination, forgetfulness, lack of time, or a myriad number of other reasons.
Those reasons won’t necessarily hold up in probate court.
Unfortunately, we (your attorneys, accountants, trustees, court officials, etc.) need the original documents to prove the validity of your Will and Trust at the time of your death. The destruction or loss of the documents may delay or complicate the administration of your estate.
Take Action: Store your estate planning documents in a fireproof safe, a safety deposit box, or a secure digital vault and inform close family members and trustees, along with your estate planning attorney, of the location of these documents.
Should Your Property Value Be Reviewed?
The value of real estate often plays a central role in estate planning, but wildfires can significantly alter the value of your property. Complete destruction or damage to an individual property or a neighborhood might trigger market fluctuations. Such fluctuations will negatively impact inheritance plans, tax considerations, and insurance payouts.
Take Action: Update property valuations and review your homeowners’ insurance to ensure sufficient coverage. Adjust distributions to beneficiaries with your estate planning attorney if necessary because of a change in the value of your real property.
Have You Been Displaced?
Individuals and families may have to move for weeks, months, or even longer in the wake of a wildfire. During this time, access to critical documents, financial accounts, and legal resources may be limited, making it harder to execute or update estate plans.
Take Action: Keep an updated, portable emergency kit that includes copies of key estate planning documents and contact information for your attorney and financial advisor. Store copies digitally.
How are Beneficiaries Affected?
Family members and other beneficiaries may need immediate financial support, particularly if they’ve lost homes or possessions. You could alleviate some suffering with immediate emergency distributions and by modifying trust terms to provide more flexibility in the future.
Take Action: Review your beneficiary designations and trust provisions to account for potential emergencies. Consider adding disaster-related clauses to provide timely support. Consider giving funds to family members who need help now vs. at your death.
How Does Your Health Directive Address Emergencies?
First responders need to react to emergencies quickly. If taken to the hospital, will medical teams have access to your health directives? Do your health care directives state your wishes clearly so that your health care agent can make informed decisions?
Take Action: Review and update your health care directives and powers of attorney. Check in with your appointed health care agents and advise them of your current wishes. Share copies with your primary care physician, designated agents, and family members.
What Charitable Giving Opportunities Should You Consider?
Natural disasters like wildfires often trigger a desire to help the community. You may wish to include charitable giving in your estate plan to support local disaster relief efforts or organizations aiding recovery. Try to assess the recipient organizations before deciding on a beneficiary. Organizations like Charity Navigator or the Better Business Bureau’s Wise Giving Alliance, can help you decide on worthy recipients.
Take Action: Work with your estate planning attorney to incorporate charitable giving into your plan, either through direct bequests or the creation of a charitable trust.
Peace of mind for you and your family members is the ultimate goal here. The Los Angeles wildfires have reminded us all to be proactive and resilient with respect to our clients’ estate planning. Contact us if you have questions about your estate plan.
Kira S. Masteller and Wanjia “Olivia” Li are California Trust and Estate Planning attorneys.
This information provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact or situation.