10 Aug My wife died. Do I need changes to my will?

Q. My will is about six years old. Since I did it, my wife died and my daughter has gotten married. I have no minor children. I have IRAs with beneficiary designations and a house that was in my name with my wife. Do I need to redo my plan?
— Widower

A. We’re sorry to hear about your wife.

There are many factors to consider when it comes to whether you need a new will.

You mentioned your daughter who got married, but you didn’t say if you had other children.

You also didn’t say who are listed as the beneficiaries or your IRA or how you owned your home with your wife.

And finally, you didn’t mention your goals for your estate plan.

We’re going to assume you don’t have other children, that your IRA primary beneficiary was your wife and your daughter is the contingent beneficiary, and that you owned the home as “tenancy by the entirety,” which is typically the form in which spouses own real property.

We’re also going to assume your estate plan was to bequeath your property to your wife first and daughter second, with the property passing to your daughter’s descendants should she die before you.

If all those assumptions are true, and if it remains your intention for your daughter — or, if she predeceases you, her descendants — to inherit your estate, and if you and your wife do not have great enough wealth to warrant more complex tax planning, then your current plan may be sufficient, said Tom Szieber, a trusts and estates attorney at Avelino Law in Morristown.

There are, however, a number of considerations to keep in mind.

In general, it is best to have your estate plan reviewed at least every five years because changes in tax laws and family structure can necessitate changes, Szieber said.

“If for any reason you deem it undesirable for your daughter or her descendants to inherit assets outright — if she has creditor or divorce concerns, receives governmental benefits due to disability or is generally poor with managing money — you may want to re-evaluate your plan to ensure that she receives assets in trust,” he said. “If structured properly, the trust beneficiaries will be able to enjoy the assets of the trust without the risk of the assets being squandered or seized.”

If the house was owned as a “tenancy in common,” thus resulting in your wife’s 50% interest passing pursuant to her estate plan — or, if none, by New Jersey’s intestacy statute — rather than to you by operation of law, as is the case where the property is owned as a “tenancy by the entirety,” then her share of the home would now be owned by the beneficiaries of her estate, he said.

If anyone other than you now owns a share of the home, that will need to be taken into account as you plan further, Szieber said.

If you and your wife individually or collectively have significant wealth, he said, it may be prudent to file a federal estate tax return (Form 706) even if doing so isn’t required, he said.

“The reason for doing so would be to elect to utilize the `portability’ option in the Internal Revenue Code, which permits a surviving spouse to utilize a deceased spouse’s unused federal estate tax exemption,” he said.

In 2023, each individual’s exemption amount is $12.92 million. However, the exemption amount will revert to pre-Tax Cuts and Jobs Act of 2017 levels or $5 million adjusted for inflation on Jan. 1, 2026, he said.

“You will therefore want to ensure that your estate plan is structured in a manner that utilizes both exemptions and, possibly, one or more trusts, to achieve maximum tax savings upon your death,” he said.

If your daughter is your only child and has no children, it is critical that you review your estate plan to ensure that your estate passes to your desired beneficiary(ies) in the event your daughter predeceases you, Szieber said

“If you remarry, you should confirm that your plan reflects your desired plan to provide for both your new spouse — and potential additional children — and your daughter and/or her descendants,” he said.

It’s worth a meeting with an estate planning attorney who can review the specifics of your plan and your wishes to see what changes you may need.

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This story was originally published on Aug. 10, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.