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How can a will address securities after it is written?

On Behalf of | Dec 15, 2023 | Estate Planning

In New Jersey, when a person writes a will or uses another estate planning option, they detail how they want their property to be distributed to their heirs after they have died. In some instances, it is relatively simple. For example, they might have a home, automobiles, jewelry and other items they list in the will and pass it along to the people they choose. In other cases, the property is a financial vehicle that could fluctuate in value and amount the person owns.

People who own securities can also leave them to heirs. However, there might be a disagreement or confusion as to how an increase in value or in the amount of securities the person had will be distributed. This might seem like a confusing aspect of estate planning, but if the person is prepared and understands the law, it can be handled just like any other piece of property.

Know what the law says about an increase in securities

Under New Jersey law, securities that the testator owned at the time the will was executed do not need to be updated with an increase in ownership provided it is the same entity and not a new investment. Unlike tangible property like real estate that the testator might have accrued after they wrote their will, the securities will include any additional securities they acquired in specific circumstances.

If the securities were from the same organization and that organization took steps that resulted in the investor having more securities than they did at the time they wrote the will, it will go to the desired heir. The only exception is if it was through purchase options as the testator would have need to actively be involved.

Companies might merge, reorganize or consolidate. There could be a reinvestment plan. These steps can result in the portfolio growing without the testator having been involved. Because this can occur as part of normal business operations, this area of the law avoids the need to constantly update wills to account for these changes.

Proper estate planning means being fully prepared

Investors who own securities are familiar with the potential for shifts in value of their portfolio. If they have written a will, left securities to an heir and there is a rise in value or circumstance has led to additional securities becoming part of their portfolio, it is imperative to understand how this is settled once the testator has died. Even people who have been vigilant about their finances and estate planning can be confused about these somewhat complex issues.

Some family members and prospective heirs could claim that they are entitled to some of the securities or all of them since they came about after the will was executed. This can lead to unnecessary dispute. People who are in this situation and are crafting their estate plan need to be aware of the law. The same is true for anyone who wants to craft a comprehensive estate plan and ensure that their property is distributed according to their wishes.

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