We, at The Paton Law Firm, always advise our clients to review their estate plan every five years, at least; and also whenever things change.
We have seen dramatic changes in the world within the last five years.
Often times people will prepare an Estate Plan that was good at the time of preparation but is now obsolete and may even be detrimental to your family.
Tax Changes
For example, we regularly prepared Estate Plans for people to avoid Federal Estate Taxes; and New Jersey Estate Taxesbefore 2018.
In 2018 New Jersey abolished the New Jersey Estate Tax Law. Further, over the years, the Federal Exemption has increased dramatically. Currently you’re allowed to leave your children $15 million without paying any Federal Estate Taxes. (You can leave your spouse unlimited amounts if they qualify for the Unlimited Marital Deduction).
Therefore, most people do not have to worry about any Estate Taxes. (Note that New Jersey does have Inheritance Taxes if you leave assets to extended family or friends).
As such, these tax avoidance plans may no longer be appropriate for you and your family.
Asset Protection Changes
Since Estate taxes don’t affect most of us, the new concern is protecting assets from creditors, including limiting liability for any lawsuits; limiting exposure to long-term care expenses; and qualifying for Medicaid or Veteran’s Benefits.
It used to be that Medicaid planning had a 3 year look-back and VA benefits had no look back. This has changed. Medicaid now has a 5 year look back and VA benefits have a 3 year look back.
The Trusts and Plans that were created previously for tax avoidance; are not effective for asset protection.
In fact, those Tax Plans and Trusts may have negative consequences for asset protection and tax avoidance now.
Family Changes
You may have wonderful documents from years past, but the people you named as your Executor, Agents under your Power of Attorney (POA), Health Care Proxy (HCP) and Living Will (LW) are no longer suitable. They may have moved away, died, have difficulties of their own.
You may be widowed, divorced, in the process of divorce. Note that “separated” means that you are married and the provisions in your Estate Planning Documents, Life Insurance, Retirement Plans, Bank Accounts, etc. will be treated as though you are married.
Your children may have matured and are now able to serve as Executor(s) and Agent(s).
What To Do
We are at The Paton Law Firm are committed to protecting all of our current and future clients and offer a 1/2 hour free consultation to review your current Estate Plan, explain the consequences and make recommendations.
Please feel free to contact our office at 201-291-1603 or frontdesk@patonlawfirm.net to schedule such a consult
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