If circumstances have not changed, is it necessary to update a Will?

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If circumstances have not changed, is it necessary to update a Will?

Asked on January 7, 2014 under Estate Planning, New Jersey

Answers:

Kenneth Vercammen Esq. / Kenneth Vercammen

Answered 7 years ago | Contributor

.  Federal Estate Tax exemption is now permanently increased so no tax for Estates under $5,340,000, and will be adjusted annually for inflation. However, New Jersey taxes estates over $675,000.

Federal Exemption Amount for Non-Citizen Spouses is $145K up from $143K.

      New Jersey has an Estate Tax on amounts over $675,000.  So, even if no Federal Estate Tax due, the estate must still file a Federal Estate Tax Return, plus NJ Estate Tax Return.

So, for an unmarried or widowed person with assets of $1,000,000, there is No Federal Estate Taxes, but

 

the Estimated State Estate Tax:  $33,200.00

 

 

   For  an unmarried or widowed person with assets of $1,500,000, estimated NJ Estate Tax is over $60,000.

The Federal Tax rate on estates over $5,340,000 has been increased from 35% to 40%.

How to avoid NJ Estate Tax- hire an attorney to set up a personal residence trust or irrevocable trust and have the assets taken out of your name and put into a trust or given to children and grandchildren in the trust. Minimum fees for trust are $3,000. This is probably not something a non-attorney can do on their own. It is illegal for a non-attorney to provide legal advice or prepare most legal documents.

 

2.Gifts permitted without Federal Estate & Gift tax was increased to $14,000 per person. 

 

        However, the amount permitted for Medicaid transfers is zero.

 Kenneth Vercammen Edison, NJ

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

If circumstances have not changed, the Will does not need to be updated. 

As for future changes in circumstances, the Will may be amended by a codocil instead of re-drafting a new Will.  A codocil is an amendment to a Will in which the testator (person whose Will this is) acknowledges their signature in the presence of witnesses.

If there are major changes in circumstances, a new Will would then be advisable.


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