Memorandum to our Clients:
It's Time to Review your Estate Planning Documents.
Periodically, we conduct a review of our client files and Will vault in order to alert our clients that they may wish to review their Wills and other estate planning documents. Specifically, we feel that a review is warranted when any of the following events occurs: (1) a significant change in the estate or gift tax laws; (2) an important change in a client’s family or personal situation (birth of children or grandchildren, death of a major beneficiary, divorce, new charitable wishes, etc.); or (3) a material change in the client’s assets (size, composition or title). As a more general “guideline”, we believe that clients should give some thought to their documents and estate plan at least every five years.
We suggest that you take a few moments to look over your Will (or Revocable Living Trust) in order to be sure that it still comports with your wishes, particularly in view of the three considerations enumerated above. As noted in the 2010 Estate Planning Update, right now there is no Federal estate tax. New York State, however, has not increased its estate tax exemption and allows only $1,000,000 per person, which creates a situation requiring an analysis of each client’s goals and assets as part of the planning process. So formula provisions dependent on definitions in the Internal Revenue Code need to be reviewed. Further, if a client’s Will provides for the maximum funding of a credit shelter (“by-pass”) trust for the surviving spouse for Federal purposes, a significant New York estate tax can arise unintentionally upon the death of the client ($229,200 would be owed to New York State!). Such a provision also could place into a trust far more in assets than was intended when the Will was written, perhaps at a time when a much lower exemption (e.g. $1,000,000) was in effect. Connecticut and New Jersey residents face similar issues which must be examined.
We should make note of the steep drop in value of real estate and securities, the only benefit of which is the opportunity created for gifting strategies before (hopefully) a rebound. In addition, the low interest rate environment provides planning opportunities with respect to various types of trusts. Please also note that changes in a Will are warranted in situations in which asset protection is important. For example, a client concerned about a future lawsuit should consider having assets of a spouse who may predecease him or her left to him or her in a trust that would protect assets against claims of creditors. We might also use a family partnership for this purpose.
We would be pleased to discuss any changes you may wish to make, at your convenience. In addition, we note for our current clients, and any client who is considering utilizing our services, that the quality of legal services we render is comparable to that which one would expect from large law firms in Manhattan, but we do so at our lower “Westchester” rates. In this regard, we are keenly aware of the difficult economic environment facing many clients.
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