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Tuesday, February 6, 2018

Revising Your Will Based on Changes in Law and Changes in Facts

It is important to revisit your documents at least once every 5 years. As the tax law changes constantly, the documents created in the past may no longer be the most efficient ones. As your family situation changes, your Will may become completely outdated.

Changes in Law

In the past, estate tax threshold used to be $1MM. Anything above that amount would be taxed at 40%. A lot of documents were written to reflect this low number and to leave anything above the threshold to the surviving spouse outright (to minimize the taxes). At this point, lots of houses in NY are above the $1MM threshold, the estate tax threshold is $5.5MM, same sex marriage has been legalized, and the majority of clients are more concerned with long term care planning ($15K a month for nursing home) than with estate taxes. Your documents should be revised appropriately to reflect this changing legal landscape.

Changes in Facts

Families and relationships within the families change often. Some couples divorce. Others remarry (with or without a prenuptial agreement). Some parents fight with their children and sever all contacts. Others reconcile after years of misunderstandings. Some seniors move into the same home with their children, with the understanding that the child will take care of them for the rest of their lives.  Change is normal and is to be expected.

As your family situation changes, so should your documents. The court will only know what you have written down (in the proper Will that had to be done properly, with two witnesses and the notary and all proper signatures). Otherwise your wishes may be completely outdated, may end up hurting your family and may not reflect your current reality.

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.


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