Wills, Trusts & Estates: Plain and Simple – Estate Planning After Death: 20/20 Hindsight

April 22, 2020

Yes, sometimes your estate plan can be changed AFTER you die to alter bequests made in Wills and Revocable Trusts.  (For ease, “will” is used throughout this article.)  This is done to change ownership of assets and/or to obtain the best tax results possible.  These changes are made by your Executor, who make certain tax elections, and by your beneficiaries, who decide whether or not they want some or all of the bequests you made to them.  Your Executor also chooses the estate assets with which to fund various trusts.  Post mortem planning provides the opportunity for 20/20 hindsight, as these decisions are made in light of the circumstances existing at your death (ex., tax rates, exemption amounts, surviving beneficiaries).

A “disclaimer” (called a “renunciation” under New York law) is when a beneficiary wants the bequest made to him/her under your Will to go to the person who would have received the bequest if that beneficiary had died before you.  For example, your Will bequeaths $250,000 to your daughter, or if she doesn’t survive you, to her children.  Daughter has an estate of $25 million and does not want the $250,000 becoming subject to estate tax in her estate.  Daughter signs disclaimer documents (which are filed with the court), and the $250,000 passes to daughter’s children.  There are state and federal tax laws and time limitations with which to comply for a disclaimer to be valid.

Reprinted with permission from Lloyd Harbor Life, April 2020. 

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