SRS: Remember to review your will and estate plan

Recently a Villager was overheard telling his golfing buddies, “I had my family trust done in 2008, so I’m done with worrying about it!” Whoa! A lot of things can happen over the years.

Experts recommend that you review your will and estate plan every five years, even if you haven’t had any major life changes, to make sure that your goals are accomplished. Here are some of the factors to consider:

1. Has your marital or familial status changed? Have you gained or lost a spouse? Added a grandchild? It’s important to revisit your estate planning to make sure that a loved one isn’t inadvertently left out of your plan.

2. Has your beneficiary experienced a major life change? Are they still able to handle this responsibility? Don’t forget to update your will, along with your beneficiary forms, insurance policies and retirement accounts, when your chosen beneficiary has a major life change of their own that could impact their ability to manage your affairs.

3. Have you moved? Estate laws can vary widely from state to state. Even if you moved within the U.S. a will you created in your previous state may not lead to an optimal outcome based on your new state’s estate laws.

4. Have your assets increased? Are your beneficiaries mature enough to handle a windfall? You may want to add beneficiaries or reallocate the distribution of assets.

5. Have you changed your mind about something important? Circumstances can change and your initial decision may need to be changed accordingly. Is your named executor still the right person? Should someone different have your power of attorney? An amendment to your will itself (called a codicil) can be straightforward, but it requires the same formality of execution when it comes to witnesses/notarization as the original.

SRS Alert: 2025 estate and gift exemption

The IRS has announced the inflation-indexed exemptions for gifts and estates for 2025. 

The annual exclusion for gifts will increase to $19,000 for calendar year 2025, up from $18,000 in 2024. This means a married couple can each give $19,000 to an individual for a total of $38,000 in 2025 and not have to file a gift tax return. 

Estates of decedents who die during 2025 have an exclusion amount of $13,990,000, up from $13,600,000 for estates of decedents who died in 2024.

Unless Congress makes the current law permanent, after 2025 the estate exemption will revert back to the 2017 exemption of $5.49 million (which will be adjusted for inflation from 2017).

Note: The Senior Resource Services (SRS) office hours for drop-in assistance are Monday, Wednesday, and Friday from 10 a.m. to noon. The SRS office is in the Cribari Center across from the Post Office. You may also leave a message at 408-239-5253 or e-mail SRS at villagessrs@sbcglobal.net. The purpose of SRS is to provide education and general business and financial information. All assistance is free and confidential. You should ask your professional advisor about your individual situation.