The 2025 Essential Guide: When to Review Your New York Estate Plan
As an estate planning attorney in New York for over 30 years, I have seen the profound peace of mind a well-crafted plan provides. But I have also witnessed the devastation that an outdated plan can cause. The most common mistake I see is not the failure to create an estate plan, but the failure to ever look at it again. Your estate plan is not a “set it and forget it” document. It is a living, breathing set of instructions that must evolve as your life—and the law—changes. An outdated plan can be as dangerous as no plan at all.
Life is dynamic. Families grow and change, finances fluctuate, and relationships shift. Moreover, the laws that govern your assets are in a constant state of flux. A will or trust that was perfect for you five years ago might be completely ineffective or, worse, counterproductive today. Reviewing your plan is not a sign of failure; it is a mark of responsibility. It is the only way to ensure that your wishes are actually carried out and your family is protected.
This comprehensive guide will walk you through the five most common life events that should automatically trigger a call to your estate planning attorney. We will also cover the single most urgent financial event of this decade—the 2026 “estate tax cliff”—which makes a review in 2025 an absolute necessity for almost everyone with a plan. At Morgan Legal Group, we are not just document drafters; we are lifelong counselors, and we believe this knowledge is the first step in true legacy protection.
The #1 Reason for an Immediate Review: The 2026 Estate Tax “Cliff”
Before we touch on the common life events, we must address the elephant in the room. There is a massive, legislated change to federal tax law scheduled for January 1, 2026. This is not a “life event” in the traditional sense, but it is a “financial event” of such magnitude that it demands an immediate review of every estate plan in New York. Waiting until 2026 will be too late. The time to act is 2025.
Understanding the 2026 “Sunset”
The Tax Cuts and Jobs Act (TCJA) of 2017 temporarily doubled the federal estate and gift tax exemption. For 2025, this exemption is at a historic high of $13.61 million per person. This means an individual can pass away with assets up to this amount without paying any federal estate tax. A married couple can shield over $27 million. This high number has lulled many New Yorkers into a false sense of security, believing tax planning was only for the ultra-wealthy.
However, this provision is set to “sunset,” or expire, on January 1, 2026. At that time, the exemption will revert to its pre-2017 level, which is projected to be around $7 million per person after inflation adjustments. In short, the exemption is being cut in half. Suddenly, millions of families whose estates are valued between $7 million and $27 million will be exposed to a steep 40% federal estate tax for the first time.
The Unique Impact on New Yorkers
This change is especially brutal for residents of New York. We are one of only twelve states that impose a separate state-level estate tax. For 2025, the New York exemption is $6.94 million. Crucially, New York’s tax has a “cliff.” If your estate is more than 105% of this amount, you do not just pay tax on the overage; you lose the exemption entirely, and your entire estate is taxed from dollar one.
Until now, many families in places like Westchester or Long Island with, for example, a $10 million estate, only had to worry about the New York tax. From 2026 onward, their $10 million estate will be subject to both the New York estate tax and the federal estate tax (on the amount over the ~$7M federal exemption). This is a devastating one-two punch that can be mitigated with proactive planning in 2025.
Why Your Old Plan is Now Broken
Many existing plans, especially those created before 2018, contain formula clauses based on the maximum federal exemption. A common plan might state, “the maximum amount that can pass tax-free shall be placed in a trust for my children.” In 2025, this works as intended. In 2026, this same formula could have disastrous results, potentially disinheriting a surviving spouse or failing to optimize the tax consequences. This single legal change makes a 2025 review of your estate plan an absolute, non-negotiable emergency. Our team at Morgan Legal Group, led by Russel Morgan, Esq., is specializing in reviewing and updating plans to prepare for this cliff.
Life Event #1: Marriage or a New Partnership
Getting married is one of the happiest times in your life. It is also a moment when your old estate plan becomes instantly and dangerously obsolete. If you have a will from before your marriage, it is critical to understand that New York law will partially invalidate it.
Your New Spouse’s “Right of Election”
Under New York’s Estates, Powers and Trusts Law (EPTL), a surviving spouse has a “right of election.” This right entitles them to a specific share of your estate, regardless of what your old will says. This law is designed to prevent someone from accidentally or intentionally disinheriting their spouse. However, relying on this default law is a terrible idea. It often leads to conflict, especially in second marriages, and may not reflect your wishes at all. A properly updated plan, created after the marriage, is the only way to ensure your assets are distributed as you intend.
The Complexity of Blended Families
Nowhere is a review more critical than in a second marriage or blended family. You likely have two competing goals: providing for your new spouse and ensuring that your assets ultimately pass to your children from a previous relationship. A simple “I love you” will that leaves everything to your new spouse can unintentionally disinherit your children. Conversely, a plan that leaves everything to your children can leave your spouse without support. This is a common source of brutal probate litigation. The solution is often a specialized trust, such as a QTIP (Qualified Terminable Interest Property) Trust, which can provide for your spouse during their lifetime, with the remainder passing to your children upon their death.
Updating Fiduciaries and Beneficiaries
Your marriage also requires an immediate review of your fiduciaries. Is your new spouse the best person to serve as your Executor or Trustee? More urgently, who is named on your Power of Attorney and Health Care Proxy? You must update these documents to appoint the person you trust to make financial and medical decisions for you. Finally, check your beneficiary designations on life insurance and retirement accounts. These pass outside your will, and failing to update them can mean your ex-spouse or a parent still inherits those funds.
LifeEvent #2: Divorce or Legal Separation
Just as marriage creates new rights, divorce automatically revokes old ones. However, relying on the law’s default settings is a massive gamble that can leave your estate in chaos. A review is not optional; it is mandatory.
What New York Law Does (and Doesn’t) Do
Under the EPTL, a final divorce decree automatically revokes all provisions in your will that benefit your ex-spouse. It also revokes any appointment of your ex-spouse as an Executor, Trustee, or Guardian. This is helpful, but it is not a complete solution. For one, it does not name new fiduciaries. Your will may now be left without an executor, forcing the court to appoint one for you. Furthermore, these revocations do not apply during a legal separation or while a divorce is pending, which can be a very dangerous “limbo” period.
The Beneficiary Designation Trap
The single biggest mistake people make post-divorce is failing to update their beneficiary designations. Critically, New York’s automatic revocation rule for wills does not apply to life insurance policies, 401(k)s, IRAs, or other “pay-on-death” accounts. I have personally seen a case where an ex-wife, who had been divorced for a decade, inherited her ex-husband’s entire $1 million retirement account because he never changed the form. His new wife and children got nothing. This is a preventable tragedy. This review must be a part of your divorce process, linking your family law agreements with your estate plan.
Complying with Your Divorce Decree
Many divorce decrees or separation agreements create new legal obligations. For instance, you may be required by the court to maintain a certain amount of life insurance with your ex-spouse or children as beneficiaries. Your new estate plan must be carefully drafted to comply with these legal requirements, integrating them seamlessly with your wishes for your other assets. This requires a skill set that spans both family law and estate planning.
Life Event #3: The Birth or Adoption of a Child
The arrival of a new child is a moment of pure joy. It also brings with it a profound new responsibility. Your old estate plan, which was likely focused on your spouse or other relatives, is now completely inadequate for protecting your child’s future.
Nominating a Guardian: Your Most Important Job
If you have a minor child, the single most important function of your will is to nominate a guardian. This is the person (or persons) you designate to raise your child if you and the other parent are not able to. If you fail to do this, a judge in guardianship court will make this decision for you. This can lead to heartbreaking battles between family members and may result in a guardian you never would have chosen. You must also decide on a guardian of the “property” (to manage their inheritance) and a guardian of the “person” (to provide daily care). These can be the same person, but they do not have to be.
Why You Must Avoid “Court-Supervised” Inheritances
In New York, minors cannot legally own property. If you leave assets directly to your child in a will, the court will take control of that money. It will appoint a financial guardian who must file annual accountings and get a judge’s permission for any expenditures. This is an expensive, bureaucratic, and inflexible process. The money is then turned over to your child in a lump sum on their 18th birthday. Most of us can agree that giving an 18-year-old, no matter how mature, a six-figure inheritance is a recipe for disaster.
The Solution: A Trust for Your Child
The correct way to provide for a minor child is through a trust. This can be a trust created within your will (a “testamentary trust”) or through a Revocable Living Trust. You appoint a “Trustee” (a person or institution you trust) to manage the money for your child. Most importantly, you get to set the rules. You can instruct the Trustee to pay for education, health, and support, and you can decide when your child gets the money. A common “staggered” distribution, for example, is one-third of the principal at age 25, one-third at 30, and the remainder at 35. This protects your child and their inheritance.
Life Event #4: A Significant Change in Your Finances
Your estate plan is a reflection of your financial picture. When that picture changes significantly, your plan must be reviewed. This applies to both an increase and a decrease in wealth.
A Large Increase in Wealth (Inheritance, Business Sale, Lottery)
If you suddenly come into a large sum of money, your old, simple will may no longer be sufficient. Your estate may now be over the New York or (especially after 2026) the federal tax exemption. This is the moment you must transition from simple probate avoidance to active tax planning. This involves more advanced tools like Irrevocable Life Insurance Trusts (ILITs), Spousal Lifetime Access Trusts (SLATs), or Charitable Trusts. This is particularly urgent in 2025, as a SLAT allows you to “use” your high federal exemption before it disappears in 2026. This is a high-level strategy that requires experts like those at our New York City practice.
A Large Decrease in Wealth (Retirement, Business Loss, Market Crash)
A significant financial downturn also requires a review. Imagine your old will leaves a specific bequest of $200,000 to a nephew and the “residue” (the rest) to your children. If your estate shrinks from $1 million to $250,000, your nephew would still get $200,000, and your children would be left with almost nothing. This was not your intention, but it is the legal result. In this scenario, we would likely revise the plan to distribute assets by percentages (e.g., 20% to your nephew and 80% to your children) to ensure the plan remains fair and functional regardless of the estate’s final value.
Buying Property in Another State
If you buy a vacation home in Florida or a ski condo in Vermont, you now have a new problem: ancillary probate. This means your family will have to open a second probate proceeding in that state, in addition to the primary one in your home county in New York (like Brooklyn or Queens). This is a costly, time-consuming nightmare. The simplest solution is to create a Revocable Living Trust and title all your properties, including the out-of-state ones, in the name of the trust. This allows all your assets to be managed in one seamless administration, completely avoiding ancillary probate.
Life Event #5: Incapacity or Death of a Key Person in Your Plan
Your estate plan is not just about your assets; it is about the people you trust to carry out your wishes. When one of these key people is no longer available, your plan can be critically broken.
The Death or Incapacity of a Fiduciary
Your fiduciaries are the “executors” of your plan. They include your Executor (who manages your probate estate), your Trustee (who manages your trust), your Health Care Agent (who makes medical decisions), and your Power of Attorney (who manages your finances). Your documents should name successors for each role. But what if your primary and successor choices have passed away, become incapacitated, or moved away? Your plan now has a “vacancy.” This will force a court to appoint someone, which is the very outcome you tried to avoid. A review is essential to name new, capable fiduciaries.
A Change in a Beneficiary’s Circumstances
Sometimes the need for a review comes from a change in your beneficiary’s life. For example:
- Special Needs: A child or grandchild develops a disability and now relies on government benefits like Medicaid or SSI. A direct inheritance will disqualify them from these vital benefits. The solution is to update your plan to leave their share to a “Supplemental Needs Trust,” which protects their inheritance and their benefits.
- Addiction or Creditor Issues: A beneficiary is struggling with addiction, divorce, or financial problems. Leaving them a lump sum of cash could be destructive. Instead, you can update your plan to leave their share in a “Spendthrift Trust.” This allows a Trustee to manage the money for their benefit, protecting the inheritance from the beneficiary’s creditors and their own poor decisions.
This is also where elder law concerns become prominent. If you or your spouse may need long-term care, your plan must be reviewed to incorporate Medicaid planning and asset protection strategies. We must be vigilant against the risk of elder abuse and ensure the people you’ve appointed still have your best interests at heart.
Your 2025 Estate Plan Review Checklist
A review is not just a quick glance. It is a comprehensive audit of your life and your documents. When you meet with your attorney, you should be prepared to discuss these key areas.
1. Review Your People
- Fiduciaries: Are your Executor, Trustee, and Guardian still the right people? Are they healthy, willing, and able?
- Agents: Are your Health Care Agent and Power of Attorney still the people you trust most?
- Successors: Do you have at least two backups named for every single role?
2. Review Your Beneficiaries
- Distributions: Do the percentages or amounts for each beneficiary still reflect your wishes?
- Contingencies: What happens if a beneficiary dies before you? Does their share go to their children (per stirpes) or get divided among the other beneficiaries (per capita)?
- Special Needs:
3. Review Your Assets (The #1 Mistake)
- Asset Alignment: Does your plan match your assets? If you have a trust, is it “funded”? (i.e., are your assets actually titled in the trust’s name?)
- Beneficiary Designations: This is the most common error. You MUST review the beneficiary forms for your life insurance, IRAs, 401(k)s, and bank accounts. These designations supersede your will. If your will leaves everything to your children, but your IRA still names your ex-spouse, your ex-spouse gets the IRA. Your plan must be coordinated with these forms.
- Property Titles: How is your home in Staten Island or The Bronx titled? “Joint Tenancy with Right of Survivorship” also supersedes your will.
Conclusion: Don’t Wait for a Life Event—Take Control in 2025
The five life events we discussed are powerful reminders that your estate plan must adapt to your personal journey. However, the 2026 tax cliff is a rare, predictable event that affects everyone and provides a non-negotiable deadline. It transforms a 2025 estate plan review from a “good idea” into an act of urgent financial necessity.
Do not wait for one of these life events to force your hand. Proactive planning is always less stressful and more effective than reactive planning. The cost of an outdated plan is measured in family conflict, unnecessary taxes, and wishes that are ignored. The value of an updated plan is peace of mind. We invite you to get in touch with Morgan Legal Group today. Schedule a comprehensive review of your documents while we still have this crucial window of opportunity to protect your legacy. For more high-authority information on wills, you can review this guide from the New York State Bar Association.
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