Estate Planning: What’s New for 2022
Each time optimism attempted to take hold in 2021, new challenges arose. A new year brings a renewed hope for the future. Estate planning during a time of great uncertainty involves both the practical and the aspirational. Being practical in 2022 means knowing the changes in estate tax exemptions and understanding the new power of attorney law. The aspirational not only refers to longer term planning goals that will outlive the pandemic, but it touches on the technological revolution that is changing how legal documents are executed.
First, the practical. In 2022, the Federal Estate Tax Exemption rises to $12,060,000 for individuals and the New York State Estate Tax Exemption increases to $6,110,000. Many New Yorkers experienced a rise in net worth due to stock market and real property value growth. This year may be the first time that thinking about estate taxes is more than just an academic exercise. If this is the case for your family, then your estate planning would be characterized by the merging of asset protection with estate tax planning.
In June of last year, the new Power of Attorney form was released replacing a longer and more confusing form that was widely dishonored by financial institutions. Banks or other entities that refuse to accept the new Powers of Attorney and insist on only using their own form will be held accountable under the law. The new Power of Attorney allows for a disabled person to direct another person to sign the form. For those suffering from illnesses or injuries that limit motor skills this new provision makes it simpler to execute a power of attorney. An unnecessary second notarized signature for the form creator was eliminated as well. New Power of Attorneys will also contain digital asset provisions that allow for the agent to transfer and manage another person’s devices and content.
The execution of Wills in New York still remains tethered to a past century. Elsewhere, pen and paper Wills are being joined by electronic wills. Nevada, Florida, Indiana and Arizona (with Utah and Colorado following behind) recognize the validity of an electronic will. Electronic wills are wills that are created, signed, witnessed and filed in an electronic or digital format. Gathering all parties under one roof at an appointed time is becoming more difficult due to pandemic realities and the illnesses accompanying aging. Electronic wills can be executed with witnesses from different locations watching the testator sign via video feeds like Zoom or Teams. Whether 2022 is a turning point for the acceptance of electronic wills in New York remains to be seen. What is important about the electronic will movement is that making them will become easier, allowing more people to create a will and that in turn should lead to estate planning results that match the will maker’s intent. Dying without a Will means the state’s law governing intestacy will direct where your assets will go and who has the right to be in charge of your estate.
A new year brings new opportunities to fine tune your estate planning. Speak to the professionals at Sloan and Feller today to review the changes and trends for 2022.