New small estate limits for 2020

Effective January 1, 2020, personal and real property valued under $166,250 may not need to go through the probate process. Previously, personal and real property had to be valued under $150,000 to be exempt from the lengthy probate process. If the decedent’s personal and/or real property is believed to be under $166,250, the petitioner (i.e. a spouse or child) can request a court order which determines the petitioner has succeeded to the personal and/or real property of the decedent. Additionally, starting on January 1, 2020, any heir or beneficiary of the decedent can file to transfer title of the decedent’s real property so long as the real property is valued under $55,425. Previously, this was only an option if the decedent’s real property was valued under $50,000.

These adjustments will be readjusted on April 1, 2022 and then again in 2025. While there are adjustments to the value cap of the personal and real property of the decedent, there are still other restrictions that must be met to avoid the probate process.

Review your estate planning documents

EricEnfermero [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]
EricEnfermero [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]
A recent client of mine had an existing estate plan that he and his wife had prepared decades before.  I have changed the details, but the substance is the same.

He wanted to make changes to his estate plan.  He thought that under his current estate plan, he was giving his baseball memorabilia to his brother and his jewelry to his nephew.  He decided now that instead wanted everything to go to charity.

When I reviewed his estate plan, I found that his estate plan didn’t say any of that!

He had used a mail-order estate planning service, similar to many internet services of today.  There were documents he had sent to the mail-order service, and those documents said what he wanted, but his wishes hadn’t been incorporated into his estate plan.

The lesson here is that even if you already have an estate plan, read through it, and ensure that what you want is going to who you want.  You only have one legacy.  Be sure to secure it properly.

Anthony Bourdain’s Will Reveals A Rarely Considered Asset Category

Famous food critic Anthony Bourdain’s fortune, initially reported at $16 million, is being probated in New York at $1.2 million.  This could be just misreported information, but often travelers like himself will have offshore assets that will not be probated in America.

In addition to his cash and tangible assets, most of which was left to his daughter, he left his frequent flyer miles to his wife.  Not all frequent flyer programs will allow miles to be passed on, but if you travel as often, or even a tenth as often as Anthony Bourdain, this is another area to consider when making an estate plan.

How do I change my will?

Everything changes in time, including what we have and who we want to give it to.  Changing your will is not overly complicated, but it is important to do it the right way.  There are a few ways to do it.

  • Add a codicil to your will

A codicil is an addendum that adds to or changes the terms of your will.  Like a will, the document must be witnessed by two uninterested witnesses.  It should be kept with your will, and you should let some trusted people know where it is and that it exists.

  • Rewrite your will

Since most wills are short documents, rewriting a will can also be done relatively quickly and simply, as long as all of the legal requirements of writing a will are met.  The old will should be phyiscally destroyed, and the new will takes its place.

Protecting your digital assets

It is a brave new world of digital assets.  Instead of trekking to a rental store for physical media, now we merely boot up our computer, turn on our television, or flick on our phone to access digital assets in libraries with more content than our local rental store could ever hold.

Our photos fill digital albums, and so does our music and our correspondence.

When someone passes away now, we can’t sort through their memories (the music and movies that spoke to them, the photos they kept, the letters they wrote) without access.

Getting access and keeping access depends on where the assets are stored.

Facebook:  Facebook allows users to add a legacy contact to their account.  This person will be able to pin photos and change your picture after you pass away, but they won’t be able to post as you.  A relative can also remove the account after you pass if you don’t want it online anymore.

iTunes and Amazon digital assets: Your iTunes music/videos and Kindle books are nontransferrable assets since they are only licensed.  That means that when you pass away, nobody else gets to use them.  If you want your loved ones to have access to these assets, you should write your passwords in a password manager or a secure location and give the information to your executor.

Google (Gmail, photos, etc.):  Google has a tool called the “inactive account manager” which allows you to pass everything Google to someone if your account becomes inactive for a preset period.  I use three months.  It also allows you to send a final text message to the executor regarding the account.

If you have questions about setting any of this up, or other estate planning issues, contact Gotto Law today.