While Trump’s Tax Cut and Jobs Act effectively abolished the death tax for most taxpayers, that is except for the truly rich, the change in the tax law did not eliminate death.
Estate plan structures and documents created for tax purpose, for which taxpayer’s no doubt paid hefty professional fees, must be reviewed and revised.
It’s likely that many of the convoluted legal arrangements, entities, and machinations thought necessary to combat the horrific effects of the federal estate tax can now be modified or even, possibly, eliminated.
Another aspect dramatically impacting traditional estate planning is that the vast number of people own or control their physical and personal assets through digital formats.
Unlike what we normally think of assets, wealth, or money being in a physical form, digital assets and accounts consist of information stored electronically.
Without an ability to access that electronic storeroom, then does a digital asset have any monetary, emotional, or other value?
Without question, digital assets of one kind or another are of growing prevalence in everyone’s life.
Bank and other financial accounts are all online. Direct deposit, direct pay, credit and debit cards, stock and brokerage accounts---try and think of something that you don’t control through the internet.
Cyber currency and domain name ownership have real value that only exists on a server somewhere in the cloud.
Photos, movies, music are downloaded to computers or smartphones, although there are still those, like me who kept their old equipment and still play vinyl or tapes.
Organizing the access and protecting digital assets and has complications which numerous commentators have pointed out.
First, access to anything online requires a password .
Second, access to accounts can be subject to password encryption further making access difficult if not otherwise impossible legally.
Third, a federal law intended to provide privacy of electronic accounts works to keep out all unauthorized persons, not just the bad ones. Family members, trustees, and even professional advisors are often caught up needing the information for legitimate purposes but lack legal access.
Fourth, a patchwork of state laws enacted to protect digital account holders from identity fraud, theft, similarly represents an obstacle that to overcome in financial and estate planning.
To reconcile the needs for digital account privacy rights with the practical needs for effective financial and estate planning, the Uniform Law Commission developed the Revised Uniform Fiduciary Access to Digital Assets Act.
How does this impact you?
It means your consent must be documented in advance before your estate representatives and others can access your digital accounts.
Building up financial security for yourself and your loved ones, protecting your business or other investments, and efficiently passing on that legacy requires serious planning.
Financial and estate assets consist of more than physical and personal property.
The key to your future wealth planning encompasses protecting digital access security.
Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.
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