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Trusts & Estates Alert: Estate Planning Developments in the Midst of the COVID-19 Crisis

The novel Coronavirus has impacted nearly every aspect of our daily lives. The current crisis presents unprecedented obstacles that can only be remedied over time. This alert will address recent developments related to the crisis in the estate planning context. 

Massachusetts Temporary Virtual Notarization Act Signed Into Law

On a practical level, mandatory shutdowns of non-essential businesses and social distancing protocols pose a significant barrier to the face-to-face interactions generally required for the execution of estate planning documents. This time of great uncertainty invites a review of one’s estate plan, particularly that of the elderly and those otherwise in high-risk groups. It is also an important time for adult children (age 18 and over in Massachusetts) to establish basic estate planning documents, as without the documents in place, it is very difficult for parents and other family members to make financial and health care decisions for them should they become unable to manage their own affairs. Although most attorneys are able to work remotely to prepare and update clients’ estate planning documents, in states like Massachusetts, which prior to now have not authorized remote notarization, it has proved immensely difficult to coordinate the execution of those documents while ensuring the safety of all parties required for a valid signing. 

To address these concerns, Governor Baker signed “An Act Providing for Virtual Notarization To Address Challenges Related to COVID-19” (the “Act”) into law on April 27th. The Act became effective as of the date of signing and will be repealed three business days following the termination of the COVID-19 Massachusetts State of Emergency Order. Under the Act, a Massachusetts notary public, who is either a licensed attorney or paralegal under the direct supervision of a Massachusetts licensed attorney, may perform an acknowledgment or affirmation utilizing real-time electronic video conferencing. 

Although the Act provides a legal avenue to effect one’s estate planning wishes during the constraints of the current emergency, its protocol is cumbersome. Any such remote signing must be held by recorded videoconference and is subject to the following requirements: 

(i) both the notary and the signer must be physically located in Massachusetts at the time of the signing; 

(ii) the signer must disclose any person in the room and make that person visible to the notary; 

(iii) unless personally known to the notary, the signer must present the notary with a government issued form of identification and provide the notary with a copy; 

(iv) the signer must return the original signed document to the notary by courier or other means as the notary directs; and 

(v) if the signed document involves a transfer of title to real estate, the signer and notary must engage in a second video conference after the notary receives the signed original, during which the signer acknowledges to the notary that the document received is the same document executed during the first video conference. 

Upon completion of the above process (including the notary’s receipt of the original signature page(s)), the notary may notarize the document (pursuant to a certification comprised of the standard notarial clause and a statement that the document was notarized remotely) and must attach to the original document an affidavit detailing the notarial act. Importantly, it is only when the notary has compiled the original signature page(s), notarial certification and affidavit, that a document signed virtually pursuant to the Act will be deemed complete. The notary must retain the following for a period of 10 years: the affidavit, videoconference recording(s), and a copy of the signer’s government-issued identification (if provided). 

The Act allows for the virtual presence of witnesses. Estate planning documents requiring witnesses may be signed in multiple counterparts, and each witness (as a signer) is subject to the same requirements set forth above. All estate planning documents signed virtually pursuant to the Act, including those that do not ordinarily require notarization, such as a Massachusetts health care proxy, must be notarized in accordance with the above procedure. 

The requirements of the Act invite practical questions and raise concerns. Among them, the requirement that the signed physical document must be in the notary’s possession is potentially problematic, as coordination of the pickup and/or mailing and delivery of the document to the notary requires a degree of physical interaction at a time when social distancing is of utmost importance. Even more concerning is that an executed estate planning document will be deemed complete only when the original counterparts are assembled; an original not returned or lost in transit would presumably render the document invalid or subject to challenge. 

In sum, although the Act represents a welcome legal development in the midst of the current crisis, its practical requirements invite us to consider options for a traditional in person signing conducted at a safe social distance. As the weather improves, outdoor face-to-face signings with the parties protected by face masks and gloves and/or protective shields, may become common. This determination will best be made on a case by case basis by the attorney and client after careful consideration of the relevant facts and circumstances in this highly unusual time. 

CARES Act

The Coronavirus Aid, Relief and Economic Stability Act (the “CARES Act”), was signed into law on March 27th, and provides $2 trillion in aid to various groups severely impacted by the virus in the United States. From an estate planning perspective, significant provisions of the CARES Act include a suspension of most defined benefit retirement plan minimum required distributions (“MRDs”), and preferable tax rules for so-called “coronavirus related” distributions. 

The CARES Act temporarily waives MRDs from qualified retirement plans for calendar year 2020, affording account owners’ investment portfolios an additional year to recover from current market volatility. Unfortunately, the CARES Act does not provide direct relief for those who withdrew their MRDs prior to April 1, 2020. However, consistent with prior law, the account owner has a 60-day window after an IRA distribution is taken to roll over that distribution into an IRA (allowed once in any 12 month period across all IRA types); if effected, the rolled over distribution will not be taxable.[1] 

Some investors may choose to take advantage of lower income and resulting lower tax rates in 2020 by converting an unwanted MRD to a Roth IRA (note that the once per year rule does not apply to Roth conversions).Converting a traditional IRA to a Roth IRA may also be an effective strategy for those who anticipate earning more and paying higher income taxes in the future. 

Qualified retirement accounts payable at death to an estate, charity, or non-qualifying trust are subject to a 5-year mandatory distribution rule (i.e. the account must be distributed out to the beneficiary within 5 years after the death of the account owner); under the CARES Act, if one of the qualifying years is 2020, that rule becomes a 6-year rule, as 2020 is effectively ignored for purposes of the mandatory payout. 

For retirement account owners who are not yet age 59.5, have tested positive for COVID-19 or have a spouse or dependent who has tested positive, or have experienced negative financial consequences due to the pandemic, the 10% penalty on account withdrawals up to $100,000 is waived for 2020. The withdrawal can either be repaid into the retirement account over the following three years (as opposed to the 60 days otherwise required), or the taxpayer can elect to be taxed on the withdrawal over the following three years. 

The CARES Act also bolsters retirement plan loans, allowing account owners to borrow the lesser of 100% of the vested balance or $100,000 (as opposed to the 50%/$50,000 otherwise allowed), for the 6- month period from March 27th to September 23, 2020. Additionally, borrowers will be afforded 6 years to repay the loan, rather than 5 years. 

There are also enhanced benefits to charitable giving under the CARES Act. For cash gifts directed to a public charity, donors can increase their itemized income tax deduction to up to 100% of their 2020 adjusted gross income, a significant increase from the 60% previous limit. (Note that the higher limit does not apply to gifts made directly to a donor advised fund.) Qualified charitable deductions (“QCDs”) are still viable under the CARES Act, though other charitable giving alternatives may be preferable for calendar year 2020, given no MRDs are required this year.[2]

Careful consultation with one’s advisory team is essential in evaluating the viability of the foregoing strategies from both a financial and estate planning perspective.

To find out more about how the information contained in this Client Alert may relate to the implementation of your personal estate plan, please call your attorney in our Trusts & Estates Group at Ruberto, Israel & Weiner.

This article was co-authored by Deborah Pechet Quinan and Deborah Qualia Howe. Deborah Pechet Quinan is the Chair of RIW’s Trusts & Estates Practice Group. Deborah can be reached at dpq@riw.com or 617-742-4200.

[1]Note that an MRD cannot be rolled over; however, as CARES applies retroactively to all of 2020, there are no MRDs for this calendar year, so the MRD has become an eligible rollover distribution. Also notable is that in Notice 2020-23, the IRS granted an extension of this 60-day rollover period to July 15, 2020, for distributions taken between February 1st and May 15, 2020. Inherited IRA distributions are not eligible for rollover.

[2]QCDs allow a retirement account owner over age 70.5 to contribute up to $100,000 from a retirement plan directly to a charity, and exclude the distribution from gross income while counting it toward the year’s MRD.


This summary is presented for informational and educational purposes only, does not constitute legal advice, nor create an attorney-client relationship. For a full understanding of the issues, please contact counsel of your choice.

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