Estate Planning in the Digital Age

How to Plan for Digital Assets

Below is a great article on estate planning in this digital age.  Our current society really has some different things that we must take into consideration, and your estate plan needs to reflect that.  It used to be simple – just pass your real estate and some personal effects and you are done.  But what do you do with reward points?  What about your social profiles?  What happens if you have an online-based business.  These are the things that we focus on, whether in KC or our Blue Springs office.  Take a look and then feel free to call us with your thoughts, comments, etc.

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Vonnegut: The New Estate Planning That’s Critical for Clients
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People need a plan for how their online presence will be handled at death and financial advisers should step up to help them

Last month a social-media website alerted me that a friend was celebrating over 30 years on the job at the company she founded. It was a nice thought. But she passed away several years ago after succumbing to cancer.

Digital echoes occur all the time on the Internet. After pausing a moment with a warm memory of my friend, I wondered what to do, whether it was my place to notify someone. Apparently, she had neglected to leave instructions with her executor.

In this case it was no harm, no foul. But “cyber intestacy””or the failure to provide for one’s online presence at death”can cost families real money, just as when someone dies without a will, or “intestate.” That’s especially so as wealth management goes paperless and there are fewer, visible clues about the financial decisions of others.

Financial advisers should get out in front of this problem. That is what clients expect from advisers in the first place”the planning, the preparation for the unforeseen. Because at its core, wealth management is a business of tomorrows.

And the tomorrows can get complicated when clients haven’t planned for their online estates or left clear records about their digital footprints. Automatic payments continue to repeat after their deaths. Or credit cards go unpaid. Or good-until-cancelled orders execute. Or heirs struggle to access treasured photographs, domain names and medical records.

By including digital estate plans as a topic in your practice, you help clients determine who makes decisions after they die. Which is a good thing. Because if they fail to plan, the vagaries of digital intestacy take over. And given the changing regulatory landscape, it isn’t clear who will be calling the shots: fiduciaries, Joe Dotcoms or, perhaps, somebody entirely unexpected.

Regulatory background

Believe it or not, the principles governing digital estates trace back to the 4th amendment, which guarantees U.S. citizens the right “to be secure in their persons, houses, papers, and effects…”

Computer users have the same expectation of privacy, says Suzanne Brown Walsh, an estate-planning attorney with Murtha Cullina LLP. But computer networks aren’t necessarily protected by the 4th amendment, she says.

To fill this gap, Congress and state legislatures have enacted laws that protect user privacy and penalize unauthorized access. But they are almost all silent on allowing fiduciaries to act on your behalf after your death.

Uh-oh.

In their terms-of-service agreements, the stuff we never read and to which we robo-click “yes,” digital businesses define who has access to user accounts and under what circumstances.

Many companies forbid access by someone other than the account holder without the company’s prior consent. And their contracts enable them to resist when, say, executors request access to the emails of a decedent.

Break the law to help clients?

To protect against the unexpected, family members sometimes share passwords with each other or their fiduciaries. It’s easy. It’s effective most of the time. Almost everybody does it at one time or another.

So what’s the big deal?

Sharing passwords is likely to be illegal, says Ms. Walsh, who explains that some terms-of-service agreements flatly prohibit it.

Legislators recognize, however, that executors require access. Last year, the Uniform Law Commission, an organization that tries to standardize laws across the 50 states, completed the model Revised Uniform Fiduciary Access to Digital Assets Act, which would grant fiduciaries the right to manage digital estates.

Ms. Walsh, who chaired the committee that drafted the act, says, “It represents a reasonable compromise between privacy advocates, tech companies, and the trusts and estates bar.”

But so far only 10 states have approved the bill. Only 18 more have introduced it into their legislatures. Which means digital estate plans are still a movable feast, and control over online rights is a function of state law or terms-of-service agreements or friends and family members, who simply share passwords with each other.

What advisers should do

Here’s what I recommend:

1. Check whether your home state has introduced or approved the act. The Uniform Law Commission website shows the state-by-state status.

2. Ask clients whether their wills contain digital-asset clauses. While these provisions grant access to executors in theory, service providers may still resist them depending on the laws of the state.

3. Ask attorneys whether they recommend forms that give digital authority to fiduciaries. In her practice, Ms. Walsh uses a form entitled, “Authorization for Release of Electronically Stored Information.”

4. Recommend that your clients take an inventory of their digital assets with real value, such as frequent flier miles. It’s worth calling companies to understand their policies.

5. If you don’t have a “chief technology officer” on your team, go find a millennial and recruit him or her to your practice.

Back to my friend, whose digital echo started this column. The social-media site uses a thoughtful form, which enables members to notify administrators about the deaths of other members. After considerable deliberation and as a matter of respect, I submitted a link to her obituary, taking care to indicate that I wasn’t a close friend nor a representative of the family. I hope it was the right thing to do.

Estate Planning Lawyers in Leawood

Estate Planning is all about assurance. What estate planning is all about is discovering the right tools to execute your basic needs. What that implies is that we use the most advanced legal documents to properly implement your desires. We customize each and every strategy so that you get exactly what you want. We do this using the most recent tools so that we can prepare a personalized strategy at the most affordable possible expense. Kindly call us today with any concerns.
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The Eastman Law Firm is an estate planning law practice. We concentrate on estate planning so that you can be ensured that you are getting the most up to date methods.

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The Eastman Law Firm
Estate planning attorneys, focusing on Wills, Trusts and Probate law.
4901 W. 136th Street, Ste. 240
Leawood
KANSAS (KS)
66224
United States

Phone: (913) 908-9113

Hours:
Mon-Sat 8am – 5:30pm

Blue Springs location at:

1200 NW S Outer Rd.

Blue Springs, MO 64015.

Call Jerry at (816)224-3133

See our directory page here and here.

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Fighting over the Small Things

Estate Planning in Blue Springs

Below is a great article on some key issues in estate planning.  As it points out. we have seen a lot of these disputes over the years.  Although we certainly see our fair share of disputes when it comes to large assets, there are many times disputes over the small things – like wedding rings and pictures.  These disputes can really wreck the estate planning procedures, whether it be in Johnson county or in our Blue Springs office.  Take a look and then feel free to call us with your thoughts, comments, etc.

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People often spend a lot of time crafting estate plans that lay out how their big assets ” from cash to homes and securities ” will be divided among their children, grandchildren and everyone else down the line. But they sometimes give far less thought to the other stuff ” those personal effects that may have little monetary value but so much sentimental value. Yet it is the decisions about those items that often cause problems in a family.

Teams of highly paid lawyers and advisers can divide the most complex estate among heirs of varying ages from different marriages in a way that is equitable. But if they are asked to decide who gets the tarnished tea service in the dining room, they are apt to bow out and wish you good luck.

“There aren’t any magical solutions,” said Marlene Stum, a professor in the family social science department at the University of Minnesota and author of “Who Gets Grandma’s Yellow Pie Plate?”

Her book offers six major principles to help people divide assets without tearing apart their family. The process starts with “really recognizing how it’s not simple or trivial but laden with emotions,” she said.

Some of the principles should be obvious, like recognizing that items have different meanings to different people, that divisions like this come at emotional times and that no one in the family really knows the best way to do this.

But at the core of Ms. Stum’s work is the concept of what fairness means and an acknowledgment that conflict will happen but can be managed.

Since fairness means different things to different people, Ms. Stum suggests creating a process, whether it be drawing lots, letting people pick in birth order or devising something else. What’s important is that the process is followed.

“Even if you’re really irritated that one sibling got what you really wanted, if you bought into the process, you’re probably going to buy into that outcome as opposed to the sibling who comes in and cleans out the house,” she said.

Parents who think that they can wait or that their children will sort out everything without guidance from them are generally not being realistic, said John A. Warnick, an estate lawyer and the founder of the Purposeful Planning Institute.

“I ask parents to think just for a second what it would be like on Christmas morning if your children ran downstairs and there were all of these presents, bright and shining, big and small, but with no name tags on them,” he said. “Can you imagine the free-for-all that would ensue?”

Doing nothing and believing that your children will divide things without quarreling, he said, will not work. “It’s the denial that my children will never fight, they’ll never quarrel, they’ll just accept it,” he said. “That denial is a temptation for many people to not put the time and energy into carefully designating and selecting personal property.”

Tracy Bennett, a psychologist in California, said she had to divide the estates of two parents and a stepmother in two years without guidance from any of them.

With her father’s estate, she gave up everything, even items of sentimental value, to avoid conflict with her sister, with whom she had a fraught relationship. When her stepmother died about a year after her father, mistakes made on the titles of assets in his estate led, she said, to her stepmother’s family getting a house and other items that should have gone to her and her sister.

By the time she got to her mother, who had to be moved into a nursing home for dementia patients, she said, she was exhausted by her do-it-yourself approach. She hired a professional conservator and used an early version of a software tool called FairSplit that allowed her and her sister to pick what they wanted in rounds, without having any personal contact.

She said the conservator approached her sister, who lives in Idaho, and said that this was the best way to divide things equitably. This time, Ms. Bennett said, she got the things she wanted ” a few sentimental items plus kitchenware for a daughter moving into her own apartment. Her sister got more things, but that did not bother Ms. Bennett.

“It was a good deal for her,” she said. “It was a great deal for me because I didn’t have to talk to someone who causes me so much emotional trauma. It was a blind, fair split. If she had known what I wanted, she would have prioritized it to spite me.”

David MacMahan, an entrepreneur and the creator of FairSplit, said he designed tools for three contentious times in a family: death, divorce and downsizing. In any of these situations, the kind of gamesmanship that Ms. Bennett alluded to can be minimized, if not avoided, by limiting the personal contact and putting the selection process online, he said.

“Parents never know what’s important to the kids,” he said. “Is it dad’s World War II medal? We combined emotional value and monetary value here.”

In creating the tool, he said, he drew on his own experience in two painful divisions of items ” after his father’s death and his own divorce.

“There’s almost always a section in a will saying divide everything else equally among the kids,” he said. “That section tears families apart. Kids fight so much.”

The tool uses selection rounds so that each child or grandchild can pick the things they want, assigning more points to things they covet. This system can be set up to allow certain family members to go before others ” say children before stepchildren ” or to allow heirs to pick up to a certain number of items in each round using a system of 500 points to bid for them.

The system also tracks the items’ monetary value, determined by an appraiser, so the selections can be calculated into the overall split of financial and real estate assets. “So if I put all 500 points on Dad’s old Bentley, it goes to monetary value, too,” he said.

Julie Hall, an estate expert specializing in personal property, said that whether the division is done online, in a room or through costly lawyers, what is needed is graciousness.

“The decisions those of us who are left behind make really should honor the loved one who died,” she said. “It requires give and take.”

To that end, she suggested that people always bring in an appraiser. In one instance, with a family clock that several children wanted, Ms. Hall said she suggested that their mother get the clock valued ” it was worth $7,500 ” and give it to her oldest child, per family tradition, but then give $7,500 checks to her other children to equalize things.

“There were some rumblings, but the money went over well, as I knew it would,” Ms. Hall said.

Sometimes the best strategy is the simplest one: Ask people what they want ahead of time.

“If one child loved the cuff links or one child loved a painting, wouldn’t it be helpful to know that in advance?” said Stacy Allred, a wealth strategist and the leader of the Center for Family Wealth Dynamics and Governance at Merrill Lynch. “We’ve done this several times. It turned out different people had the highest affinity to different items. Then, the value was equalized at death with other assets from the estate.”

Of course, such talks force people to confront the inevitability of death. The alternative is to keep quiet and risk having their stuff becoming the stand-in for emotions that roiled a family while the parents were alive. “You need to recognize the powerful messages in who gets what,” Ms. Stum said.

Estate Planning Lawyers in Leawood

Estate Planning is really about assurance. What estate planning is all about is discovering the right devices to implement your basic requirements. What that implies is that we use the most innovative legal files to appropriately implement your desires. We customize each and every strategy so that you get exactly what you want. We do this using the most recent tools so that we can prepare a customized strategy at the most affordable possible expense. Please call us today with any concerns.
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The Eastman Law Firm is an estate planning law firm. We concentrate on estate planning so that you can be guaranteed that you are getting the most as much as date strategies. We train extensively so that we can supply the exact right match for your wants and desires. We don’t require everyone into a single mold. Instead, we attempt and ensure that everyone is treated with the most customized option that best satisfies their needs.

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The Eastman Law Firm
Estate planning attorneys, focusing on Wills, Trusts and Probate law.
4901 W. 136th Street, Ste. 240
Leawood
KANSAS (KS)
66224
United States

Phone: (913) 908-9113

Hours:
Mon-Sat 8am – 5:30pm

Blue Springs location at: 1200 NW S Outer Rd., Blue Springs, MO 64015.

Call Jerry at (816)224-3133

See our directory page here and here.

Trending Estate Planning Issues in 2016

Estate Planning in Blue Springs

Below is a great article on some key issues in estate planning in 2016.  We have seen several of these estate planning issues in our Blue Springs office.  Take a look and then feel free to call us with your thoughts, comments, etc.

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Estate Issues in 2016

Estate taxes are an important item to consider for people with sizable estates. Darra Rayndon, a member of Clark Hill PLC, Scottsdale, Arizona, is an estate planning and taxation expert. In this report, she explains the estate tax system, including generation skipping transfer taxes, in this interview.

Rayndon points out that the estate tax is tied to the rate of inflation, and the exempt amount is recalculated by the IRS every year. For 2016, the exempt amount is $5,450,000 per person. That is a $20,000 increase over last year.

Before the tax is calculated, however, there are payments that can reduce the amount of the taxable estate. Charitable contributions are deducted, as are amounts left to a surviving spouse under the marital deduction. Estate expenses”things like funeral costs, expenses of the final illness, and similar items, are deducted before calculating the taxable estate.

There are also ways to reduce an estate prior to death. One of these is making gifts. Rayndon explains that there is an annual gift tax exclusion. In 2016, that amount is $14,000 per donor per donee. In other words, someone could give $14,000 each to an unlimited number of people and pay no taxes on the gifts. In addition, “the donor can direct pay educational expenses and medical expenses . . . without there being any taxation on that transfer.”

Rayndon says that there is a generation skipping transfer tax (GST tax) that everyone should be aware of. The GST tax comes into play when a grandparent makes a gift directly to a grandchild and not to the child’s parents. A generation has been skipped, and the tax will apply unless the amount given is less than the GST tax exemption for that year. There could also possibly be a gift tax, depending on the amount of the gift. The GST tax also applies also to gifts that are part of an estate. As it happens, the amount of the GST tax exemption in 2016 is $5,450,000. Like the estate tax, it is tied to the rate of inflation. The GST tax exemption is a lifetime amount, so it is possible to use it up over the course of one’s life and trigger GST tax after death because of gifts made to grandchildren. The GST tax, like the estate tax, is 40%.

Estate Planning Lawyers in Leawood

Estate Planning is all about peace of mind. What estate planning is all about is discovering the right devices to execute your fundamental needs. We do this making use of the most up to date tools so that we can prepare a personalized plan at the most affordable possible expense.
http://ift.tt/1Mu0xpq
The Eastman Law Firm is an estate planning law practice. We concentrate on estate planning so that you can be guaranteed that you are getting the most up to date techniques.

http://ift.tt/1JU4Bfo


The Eastman Law Firm
Estate planning attorneys, focusing on Wills, Trusts and Probate law.
4901 W. 136th Street, Ste. 240
Leawood
KANSAS (KS)
66224
United States

Phone: (913) 908-9113

Hours:
Mon-Sat 8am – 5:30pm

See our directory page here and here.