Q: My spouse and I did our wills in the 1990s and left all of our assets to each other. Do we need to update these Wills?
A: Your Wills created in the 1990s are still valid so long as they were executed correctly and still reflect your wishes. While Wills don't "expire", a lot can change over three decades. The natural flux of life might prompt critical reassessments. For instance, a beneficiary may have passed away, you may now have grandchildren you want to provide for, or the tax landscape has changed.
In instances where a designated beneficiary has passed away, it’s pivotal to review and modify your will. Although you left all assets to each other, you likely named beneficiaries who would inherit if your spouse predeceased you. You may have made specific bequests of personal property or sums of money to certain friends and family. Your Will might state that the property is to pass to the deceased beneficiary’s children, their spouse, or instead be distributed to your distant kin. If any of these beneficiaries passed away, you must make sure you are you still comfortable with those who are set to inherit now. A lawyer can help you navigate through these provisions to ensure they align with your current preferences.
If a beneficiary is now contending with a disability or receiving government benefits, a revision of your Will is necessary. Inheriting assets directly can compromise a beneficiary's eligibility for means-tested government programs. To prevent this from happening, you must amend your Will to allocate the inheritance into a Supplemental Needs Trust. In this way, you safeguard their eligibility for such benefits, while ensuring their inheritance augments their life in meaningful ways.
Inclusion of new beneficiaries, such as grandchildren, charities, or other pivotal individuals in your life, also necessitates an update to your Wills. If those beneficiaries are minors or young adults, structuring their inheritance through a trust within the Will allows managed, prudent distribution under the oversight of a trustee.
The ever-shifting landscape of tax laws also merits careful consideration when reassessing Wills. Tax regulations related to estate and capital gains tax have seen many alterations since the 1990s. These alterations may have substantially changed the effectiveness of your existing Wills. For example, historical increases to estate tax thresholds and the advent of portability have negated the need for credit shelter trusts for many people. Such trusts were a common vehicle to preserve the estate tax exemption of the first spouse to pass away. Now, such assets may benefit more from escaping capital gains tax than estate tax.
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Nancy Burner, Esq. and Britt Burner, Esq. are partners at Burner Prudenti Law, P.C. focusing their practice areas on Estate Planning, Elder Law and Trusts and Estates. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.