Have you looked at your will lately?

Fort Collins, CO       December 15, 2013

Among those who paid the most for their will, It is a safe bet that there are high percentage of wills currently tucked in safes, bank boxes, etc. that are dangerous and should be replaced.

HISTORY:  For many years the amount exempt from the estate tax was $600,000.  Since this was an exemption allowed to each person, if done properly a married couple could use both exemptions to exclude $1,200,000.   To accomplish that, lawyers almost always used two trusts in their wills, so that when the first spouse died $600,000 could be placed in one of those trusts so that the exemption could be preserved.  Recently that exemption has been increased to $5,000,000 and indexed to inflation (so, the $5,000,000 has increased over time).  The result is that most people do not need the two trusts.  Today most people need a simple will. 

RESULT:  The result of this history is that the people that paid the most for their wills, got the best product at the time....a two trust will.  Now those two trusts could be costly.  The cost may be incurred when the heirs try to undue the two trust impediment to their access to the funds.  When the heirs were saving big money,  the delay was well worth it.   When the delay provides no benefit,  just annoyance, the lawyers are instructed to do what is needed to fix the problem.  Depending on the lawyer and the jurisdiction, the cost of a fix will vary.   The best course, is to get rid of the two trust system before your die, unless you, as a married couple, will leave over $10,000,000.

CONCLUSION:  Anyone who has the two trust will...a family trust and another trust..should visit an estate planning attorney ASAP.  If you, as a couple, are like most, safely under the ten million dollars, your wills should be replaced with simple wills.  If your estate is over the ten million dollar level you should have your estate plan reviewed.

Merry Christmas!!!

Posted on December 15, 2013 .