June 14, 2018

What are Digital Assets?

It is important to include your digital assets in your estate plan. However, you need to know what they are.

In the last few years, digital assets have received considerable attention in estate planning. There have been lawsuits filed over access to them, after someone passes away. There have also been legislative attempts to provide greater access to them for estate administrators.

Estate plans now almost have to include plans for what to do with digital assets. However, many people are still confused about what digital assets even are. There are actually four different basic categories of digital assets people might need to consider, as the Xenia Daily Gazette points out in "Estate Planning and Digital Assets," including:

Things that exist only digitally but that have some monetary value. This can include things like domain names for websites and cryptocurrencies.
Another category includes digital accounts that provide access to things that have value in the real world. If you access your bank account online, the information about that access is a digital asset.
Another potential asset includes messages meant to communicate digitally with others, including emails or social media posts.
Finally, there is another category of digital assets that includes things like photos and videos stored digitally.

Reference: Xenia Daily Gazette (May 21, 2018) "Estate Planning and Digital Assets."

June 13, 2018

Your Executor Is Important

One of the simplest things that you can do to help prevent your estate from facing difficulties, is to make the right choice about who your executor should be.

People who get wills, normally put a lot of thought into how they would like their property to be distributed after they pass away. It is very important to them, that their wishes are carried out and everything goes to the appropriate heirs. However, often relatively little thought is put into who should make sure it all happens.

The person in charge is the executor. Instead of thinking about whether the person they are choosing is the right person, many people just pick a close friend or relative. This can be a very big mistake, if the person does not know what they are doing, as Forbes points out in "Choosing an Executor for Your Estate."

The executor of your estate will have a lot of work to do. There are often important tax decisions that need to be made quickly. The executor needs to determine what assets you have at the time you pass away. However, they cannot just give those assets to the people you want to have them.

First, they need to go to probate court and be officially appointed to administer the estate. They will then need to determine, if you had any debt when you passed away. That debt normally needs to be paid out of your assets, before any property can be distributed.

Your executor needs to be someone who not only has the time to serve in the capacity, but also can handle administrative and financial tasks well. Put some thought into this important decision.

Reference: Forbes (May 16, 2018) "Choosing an Executor for Your Estate."

June 12, 2018October 25, 2023

Why You Need an Estate Plan

If you think that you do not need an estate plan because you do not have very many assets, then you do not understand that estate planning is not just about your property.

There are millions of Americans who do not have very many assets that need to be distributed after they pass away. It is not the case that they are all poor. Many of them are just younger people who have not yet lived long enough to accumulate assets.

People often think they do not really need estate plans, if they are young and with limited assets. In some sense they are correct. If people do not own any real estate and do not have any other valuable property, it will not be too difficult for their families to handle their estates. However, estate planning is about more than that, as the Times Herald-Record discusses in “Everyone can benefit from an estate plan.”

Almost all estate plans today also include some legal documents that are traditionally considered elder law documents. Despite the term “elder law”, even young people need these documents because they are really about planning for disability.

That is planning for the possibility that you could have an accident or illness that does not kill you. However, it can leave you legally incapacitated, even if it is only on a temporary basis. These documents include a health care power of attorney, so someone else has the authority to make health care decisions on your behalf. It also includes a general durable power of attorney, so someone else can handle your finances, if you are unable to do so.

Reference: Times Herald-Record (May 17, 2018) “Everyone can benefit from an estate plan.”

May 4, 2018April 27, 2024

Use a Trust to Avoid Disputes

If you know that your family is likely to fight over your estate, you can limit the fight greatly, by using a trust instead of a will.

Many family fights over estates are predictable. People know when their family members do not get along and are likely to fight over their inheritances. They know that “unequal” inheritances are more likely to trigger trouble, too.

When it comes to estate planning, it is important to understand that those fights quite often result in protracted court cases over the estate. This is especially true, if the main instrument used to distribute the estate is a will that has to go through probate by its very legal nature. Some of this mayhem may be avoided by using a trust instead as the Times Herald-Record discusses in “Trusts avoid inheritance disputes among family members.”

Since trusts do not go through probate, there is no open probate case for family members to easily file a claim. That in and of itself makes a trust much less likely to lead to litigation. It is also easier to use the trust document itself to create language making family fights less likely. Even if there are fights, an independent trustee can often referee those fights and thus avoid any litigation.

It is nearly impossible to completely guarantee that no family fight will ever occur over an estate. An estate planning attorney can help make those fights much less likely, by creating a good trust.

Reference: Times Herald-Record (April 5, 2018) “Trusts avoid inheritance disputes among family members.”

May 3, 2018December 4, 2023

Joint Tenancy Is a Bad Idea

Adding a child as the joint tenant of your home to avoid probate is always a very bad idea.

Some bad ideas in estate planning never seem to go away. No matter how many times estate planning attorneys try to tell people that the ideas are bad, people continue to make the same mistakes.

One common mistake is when people try to do their own estate planning to get around probate. For example, a widow may add an adult child as a joint tenant on the deed to her home. While it is true that if all goes according to plan, the child will inherit the house after his mother passes away without the need for probate. This approach can be a bad idea.

Why? Normally, the trouble comes because the child has a creditor who can attach the home to pay off the child’s debts. However, there are other potential issues, as was recently discussed in the Napa Valley Register in “Can new wife inherit home?”

In this case, a married couple added their daughter to the deed as a joint tenant. The wife passed away, which made the father and daughter co-owners of the home. The father then remarried to a much younger woman.

The daughter refused to give up ownership and allow for a new deed allowing the new wife to inherit the home. When the father passes away, the daughter will inherit the home and be free to throw the new wife out if she wants.

Instead of looking for ways to avoid probate on your own, go to an estate planning attorney for assistance. The attorney can give you better ways to accomplish your goals and help you avoid these types of problems.

Reference: Napa Valley Register (April 5, 2018) “Can new wife inherit home?”

May 2, 2018

Tell Someone about Your Advanced Medical Directives

If you have a health care power of attorney and living will, you should make sure that someone you trust knows where to find them.

It is very easy to get advanced medical directives today. You can often get living wills and health care powers of attorney as part of the process of admission to a hospital. If you tell a doctor about your wishes, it is often good enough for the doctor to make a note of them in his or her notes. However, getting those documents at a hospital or by telling a doctor can be a problem.

The system of medical records used in the U.S. does not make it easy for doctors to know that you have expressed your wishes ahead of time, especially when they actually need the information as The New York Times reports in "You've Detailed Your Last Wishes, but Doctors May Not See Them."

There is a potential way to mitigate the possibility that this problem will happen to you. Get your living will and your health care power of attorney ahead of time, by going to an estate planning attorney. These documents are routinely created as part of the estate planning process.

Once you have created the documents, you should store them in a secure place. However, do not stop there. Make sure that someone you trust knows where to find the documents. That person can then get them when needed, to the doctors providing care for you.

This is not a perfect plan that will work all of the time, but it is better than relying on the current system of medical records.

Reference: New York Times (March 27, 2018) "You've Detailed Your Last Wishes, but Doctors May Not See Them."

May 1, 2018

Digital Asset Availability Limitations

Gaining access to the digital accounts of deceased loved ones is slowly becoming easier. That means that people need to think about what type of access they want to grant as part of their estate planning.

Even just a few years ago, it was almost impossible to gain access to the digital accounts of the deceased. Even when ordered to allow access by judges, tech companies would point to their terms of service and deny that access. This created many problems for families and estate administrators who needed access to those accounts for a variety of reasons. In Maryland, the legislature passed a law which became effective on October 1, 2016. The law allows Maryland residents to name a fiduciary, during incapacity and upon death, to access the resident's online accounts. DC has not yet enacted such legislation. For details on how to manage your digital assets, see an estate attorney.

In response to this problem, state legislators have slowly been passing new laws to gain access to digital accounts. As a result, some tech companies are beginning to change their policies to account for this. However, when it comes to your estate planning, do you want someone to have access to your digital accounts after you pass away? If yes, for how long should they have that access?

This subject was recently considered by the Wills, Trusts & Estates Prof Blog in "Digital Assets Estate Planning — Alternatives to Perpetual Access."

The problem? The longer a digital account remains open without someone monitoring it, the more likely it is to be hacked by someone who can use the information in it for criminal, fraudulent or other nefarious purposes. Cases of this happening are becoming much more frequent. It sometimes means that estate administrators must deal with all of the problems associated with identity theft in addition to their more traditional duties.

Given these potential abuses, you might want to direct in your estate planning that your accounts be closed completely, after the period of time necessary to wrap up your affairs.

Reference: Wills, Trusts & Estates Prof Blog (April 6, 2018) "Digital Assets Estate Planning — Alternatives to Perpetual Access."

April 30, 2018August 27, 2023

Estate Sale Gone Awry

Estate sales are increasingly popular ways to get rid of unwanted items of personal property from an estate. One Colorado woman recently learned just how eager people can be to get a good deal.

Mary Andrews, a resident of Longmont CO, recently had an extremely bad day. She had a garage sale but did not manage to sell everything she had on offer. However, that is not unusual.

Before Andrews cleaned up all the leftover items from her lawn, she left her house without locking her door. When she came home later, she found a lot of people inside her home taking everything that was not nailed down.

Why? An estate sale was supposed to be held two doors down from Andrews. People mistakenly believed that hers was the house for the estate sale. Furthermore, these people mistakenly believed that everything left over, which included the items in her house, were all left over and free for anyone who wanted them.

The police filed a report on the incident. However, they have closed the case due to the lack of suspects. Fox News reported on this incident in “Colorado house ransacked after estate sale mix-up.”

The good news here is that people who are having estate sales can expect very enthusiastic buyers, even if they are not giving the items away for free. Estate sales have proven to be a great way for heirs to dispose of property they do not want. Buyers are so enthusiastic that many elderly people are having estate sales, while they are still alive as a way to downsize before moving to a smaller, more manageable home.

Reference: Fox News (March 28, 2018) “Colorado house ransacked after estate sale mix-up.”

April 23, 2018June 20, 2022

The Process of Getting a Will

If you do not have a will, you should know that the process of creating one is not difficult in most cases.

People who do not have estate plans, often think that the process of getting one can be more difficult than it normally is. It is not difficult to get that false impression, if you start doing some digging online.

You will be confronted with unfamiliar terminology and 10 to 15 step plans that can make estate planning seem very time-consuming. You can also find some online form companies that tell you that purchasing their products make creating an estate plan easy. However, once you start reading their documentation, it might all look difficult again because you do not know the finer legal details of estate planning.

The truth? Estate planning does not have to be that difficult to accomplish, as The New York Times discusses in “What It Was Like To Finally Write My Will.”

The author of the piece discovered that creating his will was not very difficult at all. The key thing that he did was to get a recommendation for an attorney from a friend. He then went to that attorney and told the attorney what he wanted to do.

The attorney discussed the options and the author was able to work with the attorney to determine what the best plan would be for his unique circumstances. The attorney then wrote the plan down formally and the author just needed to go back to the attorney’s office a few weeks later, to formally sign the will and everything was done.

Most people will find that estate planning is just that simple when they also choose an appropriate estate planning attorney.

Reference: New York Times (April 3, 2018) “What It Was Like To Finally Write My Will.”

April 13, 2018February 15, 2024

Handling Estranged Children

Sometimes parents and children become estranged and no longer stay in contact. How these children should be handled in the parents’ estate plans, depends on the situation and state laws.

For whatever reason, parents and their children do not always get along. They no longer talk to each other and may not even know anything about one another. In short, they may become estranged.

When parents have become estranged from their children, they need to know how to handle those children in their estate plans. One woman recently wrote to the Napa Valley Register to ask about her brother’s daughter in “Is daughter really disinherited?”

The woman’s brother had a child 30 years earlier. The brother had cut off all contact with the child’s mother, when she was under the age of one. The child was later adopted by her stepfather. In his trust, the brother did not mention the daughter by name. However, he used a general disclaimer that he did not want any unnamed relatives to receive anything.

The letter writer wanted to know if this daughter was really disinherited or if she could make a claim against the brother’s estate.

In this case, the answer was an easy one. When the daughter was adopted by someone else, any legal relation between the biological father and the daughter terminated. The daughter cannot claim to be a relative for estate law purposes. In cases where a child has not been adopted by someone else, the answer depends on state law. Some states assume that any child not specifically mentioned and disinherited in an estate plan, were left out as the result of a mistake.

Contact a estate planning attorney, if you have questions about estranged children and estate law in your state.

Reference: Napa Valley Register (March 15, 2018) “Is daughter really disinherited?”

Building Legacies that Last Estate Planning and Elder Law

Author: Profit Law Firm