Post-Retirement Will and Estate Plan Updates

Plan Your Golden Years With Confidence by Revising Your Estate Plan Post-Retirement in New Jersey

While estate planning and writing your Last Will and Testament are about planning for the future, it is always done with the assets and beneficiaries that exist at the present time. Unfortunately, this can mean that things change before you pass on and your will is probated. This is why we tell our clients they should review and update their wills every three to five years. However, there are also specific life events that should trigger a review and update. One such event is your retirement. Retirement brings about many changes to your lifestyle, and your estate plan and will should be updated to reflect those changes.

Our experienced estate planning attorneys at Bronzino Law Firm can assist you in updating your will after retirement by going over your assets with you and ensuring that a will is the best method of distributing those assets after your death. We can also help you explore other estate planning options, such as creating a trust, as well as helping you ensure that your will and other estate planning documents, such as advance directives and powers of attorney, are legally drafted and that the person you have named in such documents understands their duties. Contact us to discuss your estate planning needs if you are soon to retire or have recently retired in Sea Girt, Tinton Falls, Middletown, Berkeley, Wall, and other communities in Monmouth and Ocean County. Contact our local offices by calling (732) 812-3102.

How NJ Wills Preserve Personal Wishes and Family Security

A will allows the testator, or the person who drafted the will, to spell out their wishes for their assets after they die by naming who gets what and, specifically, ensuring that their assets do not end up in the hands of someone they do not want to have them. A will also allow the testator to ensure that their minor children are cared for by a guardian they trust.

A will is very important because the probate court would distribute the decedent’s assets without it. Their minor children’s guardian would also be determined by the same court. These court decisions are extremely likely to be different than what the decedent would have wanted. By drafting a will and spelling out your wishes clearly, you ensure that those wishes are carried out without relying on a judge who does not know you to make the crucial decisions that only you should make.

The Role of Will Revisions in Life’s Milestones

Life events like marriage, divorce, births, deaths, relocation, and retirement often prompt will revisions. In retirement, age-related changes may necessitate updates to include new beneficiaries or remove deceased spouses. Aging individuals may require long-term care, influencing financial plans and prompting updates to the will and estate plan.

Retirement also brings changes in assets and income, potentially altering investment strategies and impacting bequests outlined in the will. Finally, growing estates may require reevaluation to minimize taxes, considering options like trusts or gifting assets to heirs.

Life Events Triggering Will Revisions Upon Retirement in New Jersey

While children and young adults may believe that retirement is nothing more than old people sitting around waiting to die, those who are nearing or have reached retirement know it’s a new chapter in their lives. It is a chapter that can include a number of life events that can be exciting but can also trigger the need to update their will.

Relocating to Another State when You Retire

Many retirees move to be closer to grandchildren, in a warmer climate, or enjoy a lower cost of living. Any kind of relocation should prompt an individual to review and update their will. If they have opted to buy a home in another state or country, this can be particularly important. Estate laws can be different from state to state and between countries, so ensuring that their estate plan complies with all the appropriate laws is crucial to ensuring their final wishes are carried out.

Downsizing Your Home After Retiring

After retirement, some retirees sell their homes to be closer to loved ones or to downsize from a large family home to a smaller, easier-to-manage condo or apartment. This sale requires an update to the will and estate plan to remove this large asset and possibly redistribute other assets to provide fair or equal inheritances to children or other loved ones.

Facing Health Challenges in Retirement

As people age, their health begins to deteriorate. When a retiree is facing a significant health diagnosis, particularly one with the power to eventually incapacitate them, updating their will and estate plan can be critical to ensure their wishes are honored regarding medications, treatments, and life-preserving measures, among other details.

A health diagnosis may also mean a need for long-term care. Unfortunately, Medicare and most private health insurance plans will not cover the expenses associated with long-term care. While there are long-term care insurance plans, they are expensive and harder to get as you age and almost impossible to get if you have already been diagnosed with a health condition that would require long-term care. Medicaid does provide coverage for long-term care, but does have requirements regarding the assets an individual can have. A properly written will and estate plan can protect assets while still allowing the individual to be eligible for Medicaid.

Changes to the Laws and Will Revisions for Retirees

Changes in applicable laws may also prompt a desire to update your will. Due to wills and estate plans often not being used for many years, most of the time, when laws change, existing wills are still valid and only wills created after the effective date in the law must comply. However, in some cases, such as when the Internal Revenue Service (IRS) issued Revenue Ruling 2023-2, which stated that assets held in an irrevocable trust would no longer receive the step-up basis to eliminate any capital gains taxes. This ruling affected both existing irrevocable trusts and ones that would be formed in the future. While many people were able to set up their trusts to still allow their assets to be passed on with the step-up basis and eliminate the capital gains taxes, this is an excellent example of why any changes in estate law should prompt a review and possible revision of an individual’s will and estate plan.

Starting a Second Career Post-Retirement

Finally, many people retire and enjoy traveling, catching up on books or TV they hadn’t had time for before, or developing new skills or hobbies like knitting or pickleball. Some, on the other hand, find that retirement does not suit them well or that they need a little extra income. These individuals may return to work, either part- or full-time, or start a small business. While it may not seem as though this would make a difference to their will or estate plan, particularly if they return to work for extra income, it can make a significant difference.

Estate Planning Dynamics from Parenthood to Retirement

In younger years, estate planning often centers on securing a guardian for children and ensuring financial provisions through life insurance and investments. In retirement, priorities shift to comfortable living, travel, and leaving a legacy for loved ones. These goals influence investment, savings, and estate disbursement strategies. Estate size further dictates investment approaches; while younger couples may pursue aggressive growth, retirees may opt for conservative investments to preserve wealth. Optimizing the estate plan to minimize taxes, especially with required minimum distributions, and reviewing beneficiaries and power of attorney designations are essential for retirees.

Possible Consequences of Neglecting Will Updates in Retirement

Consequences of not updating a will post-retirement could include invalidation, undesirable distribution of assets, and unwanted beneficiaries or executors. Changes in law or the death of beneficiaries/executors can invalidate the will if not updated accordingly. Failure to update may lead to assets not reaching intended beneficiaries, especially if the testator’s preferences or acquired assets have changed. Or, perhaps you’ve named beneficiaries or an executor that you no longer wish to have in your will. These details must be updated.

Why Annual Will Reviews Matter for NJ Retirees

The general recommendation is to review and make any necessary updates to a will or estate plan every three to five years. This is fine for younger people who are generally healthy and still anticipating a long life ahead of them.

In retirement, things can change much more quickly. Executors, beneficiaries, and people named as healthcare proxies may die. Retirement accounts may be depleted more quickly than anticipated. Assets may be sold or bought. Therefore, we recommend that retirees review and update their wills annually. This allows you to have a better grasp of what your estate looks like and how things are changing. An annual review also helps to ensure that your assets are all accounted for, and if any of your wishes have changed, that your will and estate plan reflect those changes.

Bronzino Law Firm Guide You through Updating Your Will Based on Retirement in NJ

If you are seeking retirement or recently retired in New Jersey, seeking the advice of an estate planning attorney is critical. Our accomplished estate planning lawyers at Bronzino Law Firm can assist you in many ways, including understanding the terminology (the legal-ese), speaking up to others to clarify your wishes after you are gone, counseling you on issues that may be problematic (such as dividing assets among large families), providing advice on minimizing taxes associated with your estate, and understanding all the ins and outs of state estate planning and probate laws.

With the assistance of an estate planning attorney at our Brick and Sea Girt offices, you can enjoy your retirement knowing that you are staying on top of updating your will, taking care of your loved ones after you are gone, and preparing for any life event that may arise. Contact us anytime to discuss your situation with regard to estate planning in Point Pleasant, Toms River, Manasquan, Asbury Park, Little Egg Harbor, and throughout all Monmouth and Ocean County areas in Southern New Jersey. Reach out to us today for a consultation either by calling (732) 812-3102 or completing our online form, and we’ll get back to you promptly.