Finance & Law

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By Linda M. Toga, Esq.

We all know that time flies by and that important things are sometimes put on the back burner as we rush around taking care of our day to day responsibilities. We have also all heard heartbreaking stories about people who had every intention of revising their estate plans but, failed to take the necessary steps while they were able to do so. The end result of not having an up-to-date estate plan that reflects their wishes and addresses all of the relevant issues facing their loved ones is sometimes devastating.

To avoid the stress, expense and emotional turmoil that their loved ones could face if they unexpectedly died without revising their estate plans to reflect changed circumstances, I urge my clients to periodically review their estate planning documents. Questions they should ask themselves include whether their named beneficiaries are, in fact, the people they want to inherit their assets. Relationships change, people die, marry and/or divorce, and fortunes come and go. Any one of these events could be the basis for making changes to an estate plan.

For example, if a client’s married son died prematurely without having children of his own, the client may want that son’s share of her estate to pass to her other children. However, if the client was very fond of the son’s wife, she may want her son’s inheritance to pass to the son’s widow. Unless she addressed this contingency when she initially had her Will prepared, the son’s wife will not be in line inherit anything from the client’s estate. Clearly, the death of a child is the sort of life changing event that should prompt a client to review her estate plan. A review and revision may also be appropriate upon the death or incapacity of the individuals who are named as executors, guardians and/or trustees in estate planning documents.

In addition to considering the factors named above, clients should ask themselves the following questions. Are any of their beneficiaries currently receiving government benefits that may be adversely impacted by an inheritance? Since signing their Wills, have any of their beneficiaries died leaving minor issue who may not be responsible enough to handle an inheritance? Do any of their beneficiaries currently have problems with drugs, alcohol or gambling? Have the tax laws changed in such a way that they should consider estate tax avoidance strategies? If the answer to any of these questions is “yes,” I recommend that my clients revise their estate plans to reflect the new reality.

Fortunately, there are ways to protect the inheritance of beneficiaries who are minors, as well as beneficiaries who suffer from disabilities, have drug or alcohol problems or who have creditors knocking on their doors. In addition, provisions can be included in Wills that create trusts designed to insure that the estate is not faced with unnecessary estate taxes and that beneficiaries do not suffer adverse effects from an inheritance. If warranted, planning can also insure a stream of income for a beneficiary who may not be in a position to handle his own finances or provide a mechanism through which a beneficiary may enjoy the exclusive use of an asset without the tax liability that may be associated with its ownership.

Even though revising an estate plan may be as simple as naming a new executor in a Will, certain formalities must be observed for the revisions to be effective and enforceable. Courts generally will not give effect to handwritten changes made to a Will and in some cases, such changes may actually result in the court refusing to admit the Will to probate. Since the result of not having an estate plan that is up-to-date, or having documents that have been improperly altered may be devastating to loved ones, revisions to an estate plan should only be made with the assistance of an experienced estate planning attorney.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.