Secure, Knowledgeable Planning

For You & Your Family's Financial Future

Does Your Will Need Revising?

Changes in a person's life over a ten year period can undercut the effectiveness of the best estate plan. Children can turn into terribly irresponsible young adults. Juveniles can become surprisingly responsible citizens. Elderly parents can become financially dependent upon their adult offspring. Baby boomers can inherit a few million dollars. All these things will happen in the next decade to somebody.

I recommend to my clients that they pull out their estate planning documents every three to five years, read over them and just think about it again. With everything else in life there is no way a normal person can remember all of the details after a few years.

On a larger scale the laws that affect estate planning do not stay the same. Congress is always doing something. In December, 2010 estate planners were surprised to receive a "Christmas present" in the form of new estate tax law that could enable a family to protect $10, 000,000 from the Federal Estate Tax. In 2017, the Congress increased that “exempt amount.” Until it “sunsets” in 2026, the estate tax protection will be over $11 million per person ($22 million for a married couple). In January 2026, the current law will mandate a decrease to about $6 million per person. So it could be literally rewarding to keep up with the latest changes in articles in publications like Money Magazine or The Wall Street Journal.

Those dramatic changes in the tax law have rendered wills done over 20-25 years ago woefully out of date. Back then exemption from the Federal Estate Tax (known to its critics as "the death tax") was only $600,000. Anyone who has a will that was designed to maximize avoidance of the death tax with formulaic provisions tied into the old tax law has a Big Problem. Since the current tax law protects 99% of all estates, those formulas would probably impose a rigid legal structure that unnecessarily diverts a lot of the decedent's wealth to a trust instead of outright to the surviving spouse. Result: one unhappy surviving spouse, who was expecting more flexibility than having a lot of the family assets tied up in a trust.

A few years ago I had a flurry of probate files which were based on wills done out-of-state and/or back in the '80's. The wills presented issues that made the probate or estate administration more time-consuming. For example, attaching an affidavit to the will, signed by the testator and the witnesses is standard procedure in Georgia. When it is missing, or in a form not accepted in Georgia because it uses another state's format, we have to find at least one of the witnesses and obtain sworn "Answers to Interrogatories" from the witness before the will can be probated.

I have seen plenty of wills from Florida and I don't think a single one of them has waived the requirement for an inventory, appraisal and final return. That causes extra work for the executor, which usually does not add anything to the quality of the estate administration and increases the legal costs. So anyone with a perfectly nice set of documents for Florida, after moving to Georgia probably needs to update their documents.

What are your alternatives? Do you write a new will every January, after you see what Congress passed in the previous year? I do not think such drastic measures are necessary. However, I tell clients that they should not count on getting more than ten years of use out of their wills before they need revising.

Of course if you don't have a will, then revision is not an issue. Just do it.