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Everyone has a will. Do you know what yours says?

April 14, 2021

You have a will, whether you have officially drafted one or not.

You may be wondering how that could be? Without a written will in place at the time of death, the state of residency will dictate how assets are distributed based on their intestacy laws. Most likely, their distribution does not represent the decedent’s final wishes. By having an official legally binding will, you can ensure to get a final say in the who’s and the when’s of the distributions of your assets. Otherwise, it is left up to the state.

Life will change and your estate plans will, too. Another common misconception of estate planning is that if you previously prepared a will, you are done. Everything is all set. Well, it’s definitely better than not having one, but if you haven’t reviewed your will in several years, this could also be an issue. It may not reflect your current wishes, your financial situation or may even be out of date with the ever-changing estate tax laws. Although wills and other estate planning documents do not have expiration dates, the details they reflect can “expire” or change. A good rule of thumb is to review your estate plan every three to five years, and especially after significant financial or life events. Major life changes, such as a marriage or a divorce, having a child, or buying a property are all good reasons to review and possibly update your will. One of the worst mistakes we have seen is where a change in marital status happens and the estate documents are not updated accordingly. You’ve moved on but your assets didn’t! If the will wasn’t changed, your ex-spouse could still inherit what was previously left to them.

In conjunction with reviewing your will, don’t forget to check beneficiaries on retirement accounts and life insurance policies. The changes in circumstance that led you to update your will could also carry over to your beneficiary designations. Beneficiary designations elected through retirement accounts take precedence over the will, so this is an important step to not overlook when updating your estate documents.

Now more than ever, it’s important to take the time for this review. Current proposals involve the estate tax exemption decreasing (from $11,700,000 per individual currently to $3,500,000) and the potential for an increase in estate tax (from the current top rate of 40% to a range that will start at 45% and possibly go as high as 65%). Understanding your current plan will enable you to make better decisions about taking advantage of the current laws before any possible changes are enacted. Do not let the complexities stop you from getting started. At Schulman Lobel, our estate planning professionals have the experience and resources to properly assist in developing a plan that considers both dispositive and tax-saving objectives. We will help coordinate with your estate attorney to make this a simple and streamlined project for you. Contact us today to get started.