(Digital) Money Matters – Why You Need to Account for Cryptocurrency in your Estate Plan

Though you probably can’t use them to buy groceries or a pair of jeans from Amazon, cryptocurrencies, if you happen to own them, merit careful consideration during the estate planning process. With the recent spike in value for select cryptocurrencies, making sure your digital assets are properly managed and able to be transferred in the case of a life-altering event has never been more important.

 

What are some examples of cryptocurrencies?

First developed in 2009 and currently trading at upwards of $7000, Bitcoin, a worldwide cryptocurrency and digital payment system, has dominated the vast cryptocurrency market. The transaction involved in bitcoin transfers occurs directly between payer and payee, without an intermediary; there is no physical representation of the currency and there is no central bank that regulates or processes transactions. Owners of bitcoin are issued a “wallet,” that contains the two required components for a transaction to occur: the bitcoin address and the private key one must enter to effectively transfer money to a different address. Unlike physical currency, ownership of bitcoins is not linked to a person, but a digital entity with a unique public address. Moreover, in a transaction, bitcoins are transferred from one address to another, and all transactions are recorded in a public ledger called a blockchain. Since its inception, competing cryptocurrencies such as Litecoin have also entered the market hoping to acquire some market share. Like Bitcoin, Litecoin is a digital, peer-to-peer cryptocurrency unmanaged by any central authority. Unlike Bitcoin, however, Litecoin claims to have almost zero payment cost and authorizes transactions almost four times as fast as Bitcoin. Released in 2011, Litecoin reached a market capacity of $1 billion in November of 2013 and over $2 billion by August of 2017.

 

How do I properly transfer my cryptocurrencies?

 

Similarly to other appreciating assets which you may own, such as a house, it is best to have a plan in case the worst ever comes to fruition. The same applies to cryptocurrencies, especially considering the unprecedented growth they’ve experienced in the last several years. Unlike real estate, digital currency cannot be transferred through a written will, and therefore it is essential to understand the necessary steps involved in planning the transfer of these assets.

With regard to estate planning, there are three fundamental steps for the effective transfer of Bitcoins: making beneficiaries knowledgeable of the assets, supplying them with the necessary means to access those assets, and keeping in mind the issue of relevant taxes when beneficiaries inherit them.

 

Step 1: Increasing Awareness

 

The first step is generally applicable to estate planning, regardless of the type of asset in question. If you wish to transfer real estate or other assets to friends or family, you need to inform them of the assets’ existence and of your current ownership over them. The same is especially true of digital assets, because the process of retrieving them is specific to cryptocurrency. Without a proper plan in place, you run the risk of easily losing valuable assets, so it is important that all potential beneficiaries are aware of their existence.

 

Step 2: Guaranteeing Access

One of the biggest challenges with transferring ownership of these digital assets is inherent in the anonymity of cryptocurrency. There is no central administration that overlooks or manages transactions, and therefore, the only individuals that can access Bitcoin assets of a deceased loved one are those with access to the information contained in the person’s Bitcoin wallet. Though a will cannot be used to transfer cryptocurrency, a written document can certainly be used to provide detailed instructions to loved ones on how to access an owner’s wallet. A similar option entails making copies of a wallet and distributing them to beneficiaries, who should, in turn, keep the entrusted document in a safe or another similarly secure location.

If you wish to distribute your assets among several beneficiaries, you can create a multiple-signature account that would require at least two private authentication keys to access them, and give a copy of your wallet to each beneficiary.

 

Step 3: Accounting for Taxes

As with all financial matters, the government will always be a supervising entity, especially when it comes to cases where taxes may be owed. Considering that the United States government once charged the creator of Bitcoin with developing a competing currency to the dollar, you can rest assured that the IRS has found some way to wet its beak in the inheritance of privately owned digital assets. In 2014, the IRS declared that cryptocurrency will not be treated as currency, but as property, for federal tax purposes (IRS Notice 2014-21). As a result, during a transaction, individuals are required to recognize ordinary or capital gains (or loss) between the current Fair Market Value (FMV), and the FMV of the assets at the time of purchase. When receiving payments via cryptocurrencies such as Bitcoin, payees must also report the respective receipts as gross income. A perk, or rather something that eases the tax burden of inherited cryptocurrency, is that upon inheritance, beneficiaries can be subject to lower capital gains taxes since the original value of the assets is readjusted to the market value upon inheritance (in the case that the assets have appreciated.)

Like with physical property, you may be able to further reduce your tax burden by placing your digital assets, such as cryptocurrencies, by placing them into designated trusts to transfer their ownership before your passing.  

 

If you happen to own intangible assets like Bitcoin, you need to make sure that you have an effective and detailed plan that will aid your loved ones in inheriting the assets in case the unthinkable happens. Given that the process of transferring digital currency is rather unconventional, it is important that you leave any intended beneficiaries with the necessary information to access your cryptocurrency, and plan wisely to reduce the tax burden on their shoulders.

When engaging in estate planning, it is highly recommended that you consult with an experienced estate planning attorney. For professional assistance in this matter, contact The Law Office of Inna Fershteyn and Associates, P.C. at 718-333- 2394 or visit our website and schedule your consultation today.

 

Digital Estate Planning Concerns

The Importance of End of Life Planning and how it Relates to Financial Stability — Don’t put the Burden on your Family

No matter what age you are in life, you are always going to be planning for the future. This is simply a part of our culture, and as we age, our future plans can seem gradually more attainable since everyone knows how inevitable future life events are. It’s always the safest route to be as prepared as possible.

Many people get caught up with planning their lives perfectly, their end of life plans can be put off and even seep through the cracks of their preparations until it’s too late. Some of the major legal documents everyone must consider in terms of end of life planning include things like a power of attorney and a living will. In general, end of life planning allows people to live out their final years of life with dignity and a lack of stress for themselves and their family members.

What is end of life planning?

End of life planning for many people can include retirement plans and all of the financial responsibilities throughout one’s career that go along with retirement. It also involves some very difficult decisions that can affect an elderly person’s family, both emotionally and financially for years.

Many times, end of life planning will entail making sure you and your family are on the same page legally and financially in the case that you one day become mentally incapacitated and cannot make decisions for yourself. This includes power of attorney and living will documents being created, but it also includes much more than that.

Planning your options for end-of-life care is also extremely important, and there are several options for care and how to pay for special treatments. Nursing homes always offer the most amount of around-the-clock skilled care outside of a hospital, and for certain individuals who need constant attention nursing homes can be a good option. Of course, many people don’t want to live in a nursing home and prefer living in their own home, but in many cases with terminally ill patient’s, special equipment and nursing care is required.

How does one go about end of life planning?

Some of the major steps that everyone should consider when it comes to end of life planning include the following:

Making a Will

This is the most basic document that goes into end of life planning, and it specifies exactly how you want your assets distributed once you’ve passed. If you do not make a will, your assets will be taken to probate court where they will decide how to divide your property according to your state’s inheritance laws.

Utilizing a Living Trust

A will is limited in terms of estate planning, thus it’s essential to also establish a living trust so you and your beneficiaries can manage your assets before and after you die without legal conflicts. Some of the assets that you can put in a living trust include stocks, artwork, vehicles, real estate, bank accounts, jewelry, antiques and much more.

Securing the Proper Beneficiaries

It’s important to make sure that your assets go to the right person with as little legal hassles as possible. One critical aspect of this part of the end of life planning process is to establish a right of survivorship in the case that you and your spouse have set up joint bank accounts. When you set up a right of survivorship your spouse receives your assets without any hassles in probate court.

Evaluating Insurance Options

Reviewing your life insurance is always necessary when it comes to your end of life planning, and that mainly is to ensure you have enough coverage for you or your spouse in the case of a sudden death. Long-term disability and care coverage are also important insurance options to consider since having these types of policies can end up saving you a lot of money in the long run.

Why is it financially responsible to plan for death?

There are several reasons why it’s responsible to plan for your own death, and the main financial responsibilities that are involved with end of life planning include the following:

  • Protecting the financial stability of your family
  • Eliminating Probate Court/financial threats
  • Managing what you’ll do in the case of incapacitation

All three of these crucial financial responsibilities allow you and your family to encounter your passing properly, and that in it of itself is a beautiful last gift to give to all of your loved ones.

The importance of digital asset planning explained

The importance of digital asset planning explained

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We all know we’re going to kick the bucket someday, and even though it’s not a pleasant thought to entertain, death can feel a little more manageable when one’s affairs are in order, such as getting funeral cover and planning your estate.

When it comes to death it’s only natural that our primary concerns are what will happen to our family, our material goods, or our businesses. However, few individuals stop to think about what will happen to their digital assets when they pass away. With the average person spending more time on the internet nowadays, our online presence has left behind a footprint that will likely forever be cemented in the digital landscape after one’s death, turning social media such as Facebook and Twitter into a massive virtual cemetery.

In November 2016, millions of Facebook users who logged into their profiles were greeted with commemorative profiles that declared themselves, their families and friends dead. Even Facebook founder Mark Zuckerberg had found that his account had turned into an obituary that read: “Remembering Mark Zuckerberg. We hope people who love Mark will find comfort in the things others share to remember and celebrate his life. Learn more about memorialized accounts and the legacy contact setting on Facebook.”

While Facebook admitted that it was a glitch in their systems, the fleeting incident not only reminded us that life can come to a screeching halt at any moment but that it’s also becoming important to plan for our online demise. But, how does one go about protecting their digital legacy – the vast amount of online profiles pictures, videos, and messages on social platforms we’ve amassed over the years?

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Hippo.co.za, the insurance comparison website, published an article Facebook, Death and Grieving, which explains the different options that Facebook users have with regards to their profiles when they die. You now have the choice of leaving your profile untouched or deleting it altogether. Another alternative is to have someone manage your profile as a memorial page where memories can be shared. However, as one grief expert pointed out in the article, having access to a loved one or friend’s Facebook page after they have died could complicate or relieve someone’s grief. The owner of the Facebook account therefore needs to be very specific in their instructions on managing their social accounts.

You can appoint a Legacy Contact, who will have the authority to either request obliteration of the profile or administer it as a ‘memorialised account’. Considering that you have put a lot of time, effort and money (if it’s a business page) into your Facebook account, you may not want to have the page deleted as it can have sentimental value for your family. After nominating a Legacy Contact, the appointed person will act as your online executor but won’t be able to login to your account or access your personal content. The online executor can only manage new friend requests, update profile photos or archive content. Friends and family will be able to write posts and share memories on the profile depending on the account’s privacy settings.

The option to memorialise an account applies to personal Facebook profiles only. In the event that you have a business page attached to your personal account, you may need to file more precise instructions and include them in the estate
Think about what you wish should happen to your business Facebook page when you pass away. If you have a business partner, they may already hold co-administration rights to the page and you may want to leave it like that. However, if you were the sole owner of the business, you could stipulate the plans for your company’s digital assets in your will. If you prefer that a someone close to you take over the business page, write down the login details so that they can access the Facebook page later on. You can also leave instructions on how to manage the page.

If you intend to hand over management of your business to someone else, you also may want to inform your clientele about the change of ownership after your death. Dedicate some time to compile a short post thanking your customers for their support and explaining the road ahead. The person who will be in charge of your business account can post the message to the page. Alternatively, you can use Facebook’s application If I Die to create and post the note, which will be published on your page posthumously. The app allows you to pick three trustees from your Facebook friends and it will be their responsibility to confirm your death before any of your pre-written material can be published.

Through simple and effective digital estate planning you can safeguard your online legacy and spare your family and executor a lot of aggravation down the line. To see how preserving your social profile can help your loved ones deal with the grief of your passing, you can read the full article on the website of Hippo.co.za, with whom this article was a collaboration.

Staff Writer

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How to delete and deactivate a Snapchat account

How to delete and deactivate a Snapchat account

Nothing lasts forever, and certainly not in the land of Snapchat, the app that first popularised the idea of photos, videos and messages that fade away after a certain number of seconds.

If you’ve had enough of this impermanence and want to switch to something a little more lasting, deleting and deactivating your Snapchat account isn’t difficult to do, but you are going to open up a web browser – at the moment you can’t actually delete your account from inside the apps for Android and iOS.

You also get a month between account deactivation and account deletion, in case you change your mind.

1. Visit the delete account page

The special Snapchat delete account support website will handle all of your Snapchat account deleting needs is , so fire up a web browser and type it in. You can use a browser app on your phone if you don’t have access to a computer.

First of all you need to log in using your Snapchat credentials – if you’ve forgotten them (maybe that’s why you’re deleting your account) then click the ‘Forgot your password?’ link to get a reset link sent to your inbox.

This online login is only for deleting your account by the way, and you can’t look at your trophies or snaps on the web.

2. Recover your username and password

If you’ve forgotten your username or the email address you registered with Snapchat you can find them both from inside the app. If you tap the ghost icon at the top of the capture screen your username appears (just below your real name) and you can tap the cog icon (top right) to see your email address and other account details.

Assuming you’ve got all your credentials ready one way or another, enter them into the login page, tick the captcha box to prove you’re a real flesh and blood human being, and click the Log In button.

3. Make up your mind about deleting the Snapchat account

Snapchat gives you another chance to change your mind so take a moment and consider whether you can really live without the app in your life.

Note too the details about how the process works – as soon as you complete these steps, your Snapchat account is deactivated, which means other people won’t be able to contact you through the app. Another 30 days after that, your Snapchat account is deleted forever, which means your details vanish for good.

Presuming you’re happy to proceed, enter your username and password again (your browser might have remembered them for you) and click ‘Continue’.

4. Check for confirmation

You’re all done – your account is deactivated. You’ll get a confirmation message sent to your registered email address from Team Snapchat explaining what happens next, and reminding you that you’ve got 30 days if you happen to change your mind.

Because everything is handled over the web, the process is the same whether you’re using Snapchat on Android or iOS, but you’ll want to remove the Snapchat app from your phone as well (you don’t need to log out first).

On iOS, tap and hold the Snapchat app icon then press the cross symbol. On recent versions of Android, tap and hold the app icon and drag it up to the Uninstall button.

5. Changed your mind? Reactivate your Snapchat account

You can bring your Snapchat account back from digital death at any point over the 30-day window by logging back into the app. Your friends list should still be there too.

Launch Snapchat again and you’ll notice you’ve been logged out, even if you didn’t uninstall the app in the meantime. Tap Log In, enter your original details (your username might have been remembered for you), and then tap Log In again.

A message appears asking if you want to reactivate your account so tap Yes. Snapchat puts the wheels in motion and if you wait a few minutes then log in again you should be back in Snapchat business (you also get an email when your account is ready to use again).

End of Life Doulas Matter

End of Life Doulas Matter

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You might have heard the word ‘doula’ and thought of a birth coach, as people often seek support to bring a new life into the world, but what about when we are preparing to die? The answer is doulas that are trained to help the dying, a profession that often scares and fascinates people simultaneously.

Death Doulas give different kind of services – anything from being a companion at a bedside, providing practical support for the family or aiding conversations with the person’s doctor, which will then help with making decisions about treatment. Some dying persons simply have a fear of death and need to talk and share with someone who is not afraid of discussing such issues. End of Life Doulas report that these relationships can last months, or even years.

The demand for death doulas is currently on the rise because more people prefer to die at home, at their own terms. Also, the growing number of terminally ill people with life threatening illnesses facing the end of life alone, without significant support from family or friends contributed to the demand.

End of life services are designed to help people plan for or manage their own or their loved ones’ end of life. End of life doulas are usually caregivers with extended knowledge and skills that support persons approaching the end of life and help them put together comprehensive plans for their own deaths.

Today, dying persons and their family members wish more than ever to be involved in the end of life process and through advanced planning they specify medical treatments they wish to receive, organize their medical or legal affairs, create rituals, complete final wishes and in many terminally ill cases, choose and plan the method of their death. End of Life Doulas help make the actual dying process as comfortable and efficient as possible for dying persons and their families, as many people find it emotionally hard dealing with these kind of arrangements.

An End of life Doula provides support and care for those who are dying. It is a person who accompanies an individual on their final journey. It’s not like hospice since there’s no administration of medication. An end of life doula is only there to soothe the passage from the known world into whatever an individual believes awaits them. Many organizations have created end of life doula training workshops and classes to embody what they believe would enable the aspiring doula to be most effective in assisting those who have lived a long journey and ready to rest in peace.

In the same way as mothers to be are encouraged to make a birth plan, it is also helpful for the person approaching the time of their death to make a plan to help them feel more in control, to provide a framework for making important choices, and to help give them the courage needed to ask for what they want in an environment where they might otherwise feel out of control.

This point of transition both in and out of life is often attended by much vulnerability; it is frequently surrounded by fear of the unknown and calls for a state of focused preparation. Doulagivers know how to hold the space for the person in transition, know how to encourage the process of letting go, of easing transitions with both gentleness and grace.