Do You Have a Will? Is Your Will Up-To-Date?

by Thomas D. Begley, Jr., Esquire, CELA

During this time of uncertainty it is more important than ever to have a Will and that it be current.  A 2019 survey by Caring.com found that most people believe that having a Will is important, but only 40% have gotten around to doing one.  Procrastination is easy, but proper planning is important.  Of the 40% who have a Will, many are out-of-date.  Laws may have changed and family circumstances may have changed since a Will was written.  Your Will may no longer achieve your objectives.

Will Considerations

            When planning what should go in your Will, there are a number of considerations.  These may include some or all of the following:

• Grandchildren.  Do you have grandchildren?  Do you love them?  Did you remember them in your Will?
• Gifts/Loans to Children.  Have you made gifts or loans to any of your children during your lifetime that have not been repaid and that could be equalized in your Will?
• Tax Considerations.  While the current federal estate tax exemption is $11,580,000, this is scheduled to sunset in 2025.  Due to the enormous strain on the federal treasury due to COVID-19, we may see a tax increase including a decrease in the federal estate tax exemption soon.  The New Jersey estate tax has been repealed, but again due to pressure on the state budget this tax could be reinstated.  Does your Will address these potential taxes?
• Bloodline Trust.  If you leave money outright to your children and they are sued by a creditor, personal injury victim, or if they are divorced, the creditor, injury victim or spouse may walk off with some or all of the money you left to your child.  To avoid this consequence, many of our clients leave money to their children in a Bloodline Trust.  This offers protection.
• Retirement Plan Account.  In December 2019 Congress passed and the President signed the SECURE Act.  This law imposed a significant tax on children who inherit their parents’ retirement plan accounts.  Does your estate plan reflect these changes in the law?
• Blended Families.  Second marriages where one or both spouses have children from a previous marriage create special problems.  Generally, the first spouse to die wants to provide for the surviving spouse but wants some or all of the money to go to the children of the first spouse to die on the death of the second spouse.  Frequently one spouse will leave his or her estate to the other, and the other will either remarry and leave everything to his or her new spouse, or on death of the first spouse the surviving spouse will change his or her Will leaving everything to the children of the surviving spouse.  This can be avoided by using a Trust for the surviving spouse to provide for all of his or her needs with a specific direction that on the death of the surviving spouse all or part of the remaining funds go to the children of the first spouse to die.
• Disability.  Do any of your intended beneficiaries have a disability? If so, leaving them money in your Will may prevent them from receiving important public benefits and may, in fact, cause them to lose benefits they were already receiving.  Trusts can be utilized to ensure that the individuals with disabilities receive an inheritance, but also maintain their benefits.