May 24, 2017

The Importance of Reviewing Your Will

Last Will and Testament

Many people neglect to review their Wills, which often can have devastating results. We have advised clients that have found themselves in unfortunate situations and needed legal advice and counsel to deal with the consequences of an outdated will.

Recounting a recent experience –

When did I last review my Will? 1997. Yes, I remember it was when we sold the house and moved into Manhattan. The house sold for what then seemed like a huge sum so my husband and I decided that if anything happened to either of us there was enough money for the survivor of us and the children to share. The Wills gave the children what our lawyer called the credit shelter amount – this would be equal to the maximum amount that could pass free of federal estate tax, $600,000.  The rest of the assets would go to the surviving spouse.  Our lawyer explained that there would be no federal estate tax at my husband’s death and that possibly there would be a small state estate tax.  This made good sense to us and we signed our Wills.

My husband passed away last year.  My children and I met with our estate lawyer to discuss what we needed to do to probate my husband’s Will and transfer the $600,000 to the children and the balance of my husband’s assets to me.  I had been worried about what I would have to live on but we were fortunate and it looked like I would be fine.

I spoke too soon. Our lawyer advised me that the amount exempt from the federal estate tax, which would go to the children, was no longer $600,000. It was now $5,450,000.  This amount was almost half of my husband’s assets. Our lawyer then continued, since the amount that was exempt from state estate tax was less than the amount exempt from the federal estate tax, we would have to pay state estate tax* of $444,800!

In connection with your review of your Will, consider:

  • Addressing changes in the tax laws
  • Reviewing changes with your personal finances
  • Changes with family relationships

If you have any questions about Wills or other estate planning issues, please contact Laura Wartner in Atlanta, or Dana Mark in New York or any attorney in our Private Wealth Practice.

*Not every state imposes an estate tax.  New York, New Jersey, and Connecticut do.  Georgia and Florida do not.

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