Whether you’re just starting a family or already have great-grandchildren, it’s important to have a will and keep it updated. Chances are, however, that like a lot of Americans, you don’t do this as often as you should.
Valley Trust’s Team recommends you update your will as often as every two years. Surprised? Well, here are the top three reasons updating your will that often is a good idea:
Providing for your children
Once you have kids, you’ll need to add a provision to your will about who should have legal guardianship over them in the event something happens to you. As time goes on, you may change your mind about who that person should be. And once your children become adults, you may want to eliminate that provision altogether.
You may also opt to provide for your children by acquiring life insurance. As you age, the need for life insurance tends to increase, as does the cost. However, once you no longer need to provide for your dependents, you might consider changing your policy in order to save money.
Executing your will
Once you elect the executor of your will, that person is responsible for everything from changing the locks on the decedent’s home, to canceling your driver’s license, to distributing property. Over time, you may decide to change the executor, for example, to a spouse or adult child.
If you are seeking an unbiased and unemotional referee in the distribution of your estate, you may also elect to have Valley act as the executor or co-executor of your will. Another option is to make Valley an agent for the executor, which allows the executor to delegate some responsibility to the Bank.
Protecting your wealth and assets
If you do the necessary planning, it’s possible for you to minimize or even avoid paying estate tax. However, this depends on several factors, including: tax law changes at the state and federal level, your current financial situation and how much wealth you desire to pass on to your loved ones. In addition, if you move from one state to another, or have multiple residences in different states, it may have a significant impact on your income tax and estate tax.
At Valley we understand that things change as life goes on. The best way to determine whether you need to update your will is to speak to an estate planning expert. That’s why our team members keep in regular contact with our clients, especially if there’s a change in tax law or family circumstances. We also review wills at no extra cost — even if you’re not a Valley customer.
Still not convinced?
Here are a few examples of real Valley clients that benefited from updating their will*:
John and Linda were 65 and 62, respectively, and semi-retired. They owned a house in upstate New York, and a condominium in Florida, and had recently sold their home in New Jersey. At their first meeting with a Valley Trust team member, we discovered they hadn’t updated their wills in over a decade. As a result, they were very out-of-date; their wills did not include their grandchildren or children’s spouses, and since their main residence was no longer in New Jersey, their estate tax and income tax were both significantly affected
Another couple in their eighties, Max and Rita, had created matching wills in the 1990s with a provision that a portion of the deceased spouse’s money would go into a trust, and the rest would go to the remaining spouse. However, tax law has drastically changed since the 1990s. Since Max’s and Rita’s wills had not changed accordingly over the years, based on current law, all the money would go into a trust. As a result, the remaining spouse would not have complete control over those assets, and would be subject to restrictions on monetary distributions from the trust.
Stan was worried about his daughter. She was on the brink of divorce, and he wanted to make sure she was provided for. Stan also wanted to make sure that, if he should pass away, his daughter would have complete control over his estate and his soon-to-be-ex-son-in-law wouldn’t have access to his money.
Our team of estate planning experts was able to help each of the above-mentioned clients identify and find a solution for their unique situation by updating the terms of their wills. We’d like to do the same for you.
Request a consult with one of our financial planners today!
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