Attorney J. Kenneth Harris, founder of Harris Law Offices, in light of a December 3, 2015, U.S. News & World Report article about what happens to digital legacies when one dies, discusses the importance of digital effects in estate plans.
Haddon Heights, NJ (PRWEB) January 29, 2016
“If your computer, laptop or tablet is password protected, how does someone access these devices in the event of your demise?” said J. Kenneth Harris, who focuses on probate and estate planning. “If you have everything online, how is anyone to discover your accounts?”
According to the U.S. News & World Report article, having all this information in one place is crucial in the event of an emergency or death. Additionally, if someone is incapable of accessing the assets of a loved one that has passed, those assets can disappear.
To ensure your assets are passed on, Harris strongly recommends making a thorough inventory of all your digital assets, listing the name/service provider of the asset, the nature or type of account, the user name, password and answers to security questions.
This list should be kept with your will, power of attorney and other important papers. Once you have made this list you then need to decide what should be done with these accounts: closed, transferred to someone else (i.e. bank accounts for the purpose of estate administration), etc.
“You will need to appoint someone to manage these digital assets, who may or may not be the same person you name as executor of your will,” said Harris.
“You also might want the person managing your digital assets to be more comfortable with computers, online services and be more tech-savvy than the person you name as the executor/administrator of your estate.”
Lastly, since the laws in this area are still developing, one should provide specific instructions as to what they want done with these digital assets and authority granted to your digital personal representative to manage and dispose of digital assets. This is particularly important since most states do not have laws addressing what happens to digital assets upon the death of the owner. “This problem is further compounded by each provider having their own service provider agreement and different ways to deal with this issue,” said Harris.
About J. Kenneth Harris, Harris Law Offices J. Kenneth Harris, founder of Harris Law Offices, which has been in business for more than 20 years, handles a variety of probate and estate planning matters, including probate administration, wills, trusts, living revocable trusts, charitable planning and retirement plan distribution. He also represents clients in other legal matters such as commercial law, transactional law and real estate. For more information or a free consultation, please call (856) 681-0429. The office is located at 2 White Horse Pike, Haddon Heights, NJ 08035.
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Creating a personalized estate plan has become more and more important these days. Estate plans nowadays need to include digital estate planning as well. What does that mean? A digital asset is basically anything that is either based on a computer or involves the internet. Common examples are email accounts and online businesses. Who will inherit those unique assets when you pass away? Better yet, why is it important?
Digital assets are more and more common
Communications technology has become more and more popular. As this has happened, digital assets have also become more common. Only a decade ago, not many of us would have even considered a phone to be one of our most important possessions. Today, however, most of us rely almost entirely on our cell phones to communicate, conduct business, store sensitive information, and much more. Although the phone itself is not a digital asset, the information it contains is an asset. Cell phones are also a way to access other digital assets you might own.
What does digital estate planning involve?
Digital estate planning involves issues such as how to protect the assets contained on a cell phone or laptop; who will have the authority to access your email accounts and online bank accounts. More importantly, who will have the basic knowledge that these various digital assets even exist? Consider this example. You sell items online using an eBay or PayPal account, which is linked to your bank account. Someone needs to know how to access those accounts and be allowed to transfer money if you become incapacitated, for instance. Even after you die, your executor needs to know which accounts exist and how to access them. You also need to decide who will ultimately inherit them. This is what a digital estate plan is for.
Times have surely changed
Historically, an estate has consisted of a will, trusts, power of attorney appointment, life insurance policies, and any property that a person owned, including financial accounts. Back then, paper documentation was the only method of recording these estate planning tools and they would often be collected in a folder in a safe or desk drawer. That way, family members would easily be able to find the information after the person passed away. Other information, like bank statements and bills, could be obtained through the mail.
Now, however, most of this information is routinely digitized. So your financial, business, personal, and administrative documents will likely exist in a digital form. While many people manage their finances, businesses, and personal lives online, very few actually have organized or centralized accounts. This can mean that managing and distributing these digital assets will be very difficult after the owner has died, and can lead to confusion, or even worse, denial of access.
Why digital access is important even after death
Even though you may have a business with an actual building, you are certain to still have some digital assets that are tied to that business, such as online access to a bank account. In that situation, there is still significant value in being able to access the online components of your accounts because they can provide easy access to key information that may be necessary for settling your estate.
What can a digital estate plan really do for my family?
There are many ways a digital estate plan can be very helpful to your family. Here are a few examples:
Locate any accounts you have online
Access those accounts or the information in those accounts
Determine if your digital property has any financial value that needs to be reported and perhaps submitted to probate
Distribute or transfer any digital assets to the appropriate parties
Avoid online identity theft
Why small businesses generally need an estate plan
In general, estate planning can protect your business assets from taxes, control how your assets will be distributed and more. Everyone benefits from a basic estate plan, no matter what their wealth or status may bees. This is also true for small business and family-owned businesses. Understanding why small businesses need an estate plan will help you in making decisions on how to organize and business and plan for succession of that business.
Join us for a free seminar! If you have questions regarding digital assets, or any other estate planning needs, please contact the experienced estate planning lawyers at the Schomer Law Group for a consultation, either online or by calling us at (310) 337-7696.
Estate planning attorneys, accountants and other wealth industry professionals, though most good at their specialty, have a tendency to only address what we categorize as the “business side” of estate planning for their clients. Unfortunately for the client, the scope of that approach is much too narrow.
While the business of high net worth is often the most important for the owner, there are four other areas for estate maximization that also exist. Know that all five of the dimensions (especially 1-4) must be addressed before you, and those you care about, can feel secure and safe.
Here’s the big picture…
It’s the business of many, including Kubler Financial, to position and mitigate your assets from the teeth of the U.S. Federal 40% estate tax rate, to design thoughtful, effective wills and trusts, deliver and administer creative uses of life insurance and premium financing, help with beneficiary decision-making, arrange for lawful gifting tax exemptions, deliver other estate transfer vehicles and arrangements, and more…
But estate strategy development should not end there. When it does, which is often, the byproduct is extraordinary levels of vulnerability for the estate owner, the owner’s family, and the assets themselves. If your strategy doesn’t consider each of the five dimensions (especially 1-4), then you’re probably executing a sure-to-fail estate strategy.
It’s far from complicated, but lack of attention to the big picture causes catastrophic outcomes. It’s why most estate plans fail. If there’s one thing more important than the money, the assets and affluence itself, it’s understanding and adjusting for the array of wide-ranging effects that wealth creates.
As fervent as you are about managing and defending the measurable worth of your assets, it should also be high on your list to maximize the overall effects of your wealth. Collectively, this is how The Five Dimensions For Estate Maximization cures problems and accomplishes desired results. Certainly there is no discussion without the wealth, but the reality is that the effects and consequences of it, if not properly accounted for, will likely produce disastrous aftermaths.
Google: “estate plan disaster” for examples of common tragedies.
All different, yet extremely costly estate plan problems that would’ve been relatively easy to avert if properly handled prior to the owner’s passing. The list of lost legacies is long – some associated with household names, but most are not – and continues to grow unnecessarily.
It is my personal desire, and the mission of the Kubler Financial team, to make people aware that costly omissions likely exist in their current plan and deliver the strategy that enables you to direct and transition your assets in the most flawless way possible; to create successful family missions of wealth stewardship and a legacy of well-being for at least two generations after you, and longer if you desire.
Our clients receive the benefits of our knowledge and wisdom for each of the five dimensions for estate maximization. I am 100% confident that you too will gain from reviewing and committing to each of these.
These are “The Five Dimensions For Estate Maximization”:
1) The ‘Business’ Side
Origination and implementation of a solid strategy for your estate that protects and increases the bottom line net worth of your collective holdings; so your accumulated assets, one day to be passed on to your family, other heirs, to trusts, charity or various combinations, reflects the absolute largest valuation possible. It includes anticipation and preparation for what happens after the wealth owner passes with regards to estate taxes, avoiding probate and other unnecessary legal expenses, wills, trusts, insurance, working with the IRS, etc.
2) Human Being & Emotional Elements
Often the most disastrous of all, this is an area where unintended, but emotionally severe consequences are widespread. Understanding, empathizing with and addressing your family’s dynamics and individuals regarding mindsets about affluence, feelings, levels of control, relationships with each other, the sibling rivalries, keeping the family together and alleviating the potential for personal suffering, agony, depression, other forms of devastation and even abandonment by members due to an estate plan’s lack of forethought. People themselves, their personalities, characters and value systems (low levels of integrity, loyalty, honesty, etc.) are a large cause for complications. Poorly thought-out estate plans provoke incredible levels of emotional suffering. An ability for you to anticipate this dimension as a future problem area is key.
3) Preparing Family Members & Other Heirs
The readiness level of family heirs determines much regarding the future of the estate and the fabric of the family itself. Has the long term mission with key players truly understanding what’s ahead, with roles defined and a strategy developed to accommodate it been developed and currently in progress? Is that important to you? To keep it in the family with members who have the aptitude and are prepared to properly manage it all when the time comes?
4) Wealth Succession – ‘Keep It In The Family’
Long-term succession success can occur when most members share the values and attitudes that correspond with ambitions for that. Families must employ sound communications, espouse financial literacy and positive mindset development about money within and throughout the family, inheritance and prudent decision making skills regarding wealth transitions. Do you want your grandchildren to receive some of the fruits from your life’s great work? Is developing that kind of a legacy of important for you?
5) Philanthropic Desires
Philanthropy is the most discretionary of the five dimensions, but most of our clients have discovered great satisfactions associated with giving to charitable causes. Almost all donate or have created family foundations and have developed strong personal relationships between wealth, family, philanthropy and spirituality. In addition to being pleasurable and empowering, it also helps reinforce and remind givers that money usually carries its burden with it and can harm or unsettle the recipient if given without the right amount of caution.
Why is this important to you?
The estate planning industry is failing its clients, and has been since its invention. It’s a global crisis, but not because of what you might think. The industry’s failure isn’t due to rampant incompetence or ill repute, but is due to the professionals taking a much too narrow view of matters. Naturally, this allows for oversights and omissions. Certainly, there are complexities associated within each of the five dimensions, but details don’t create the quandary. Lack of consideration of all of the critical elements is the problem!
The information on this page is important so you don’t become part of the:
• 70% of the wealthy who’s estates transitions fail; meaning involuntary loss of assets. The so-called plan comes unglued, then collapses.
• Or of the 70% of the high net worth families, whose money is entirelyspent, or lost otherwise, before the end of the second generation.
• Which by the end of the third generation, 90% of families no longer have their wealth.
A dismal 10% success rate.
I encourage you to think about the information contained on this page and how it relates to your own situation. The statistics mentioned above are real and have confounded the estate planning industry forever.
Treat the few moments it takes to review this page as an important time for yourself. I would suggest that you read it more than once. Know that after you have adequately addressed each of the five dimensions, then you can feel safe that your estate is truly maximized.
I’m easy to reach and look forward to sharing more about estate maximization with you.
Keep it in your family…
Jon Kubler, President
448 S. Hill St., Ste. 801
Los Angeles, CA 90013
P.S. It’s a statistical and historically proven fact that seventy percent (70%) of all estate transitions lose control of assets, and by the end of the third generation, 90% of families no longer have their wealth.
There is no good reason to be a member of these groups!
Not too long ago, Americans wouldn’t even consider including their online assets in their estate plans. Today, however, families and individuals would be making a big mistake not to include thorough plans for how their digital assets are managed after their death.
In this modern age, we conduct more and more of our financial, work, social, and creative activities on computers and the internet. We store a huge amount of information on the web, from our personal files and documents to banking information to our Facebook accounts. Online assets are as valuable as our other property and financial information—in fact, studies have found that the average person today has more than $54,000 worth of digital assets stored on the web and computers. According to the National Association of Unclaimed Property Administrators, state treasurers have more than $32 billion in unclaimed bank accounts and other online assets.
What will happen to your digital assets after you die? If you want your online financial accounts, commercial accounts, and social media accounts to be left in the hands of someone you trust, it’s highly advisable to include your digital assets in your estate plan. Below, we’ve included a step-by-step guide to creating an estate plan for your digital assets.
Step One: Determining Your Digital Assets
First, make a list of all your digital assets. This could include computing hardware such as computers, flash drives, smart phones, and cameras. Include your online accounts, such as email accounts, social media accounts, online storage accounts, and bank accounts. After compiling a list, your attorney can help you to store login and password information in a safe place, along with information describing where computers and smart phones are located.
Depending on the type of account and your own personal preferences, you may want some accounts to be archived and saved, or deleted and erased. Others, you may want to transfer into the hands of family, friends, and trusted associates. Your estate planning attorney can help you determine an appropriate method for handling each asset in a way that accommodates your wishes, and assist you in documenting instructions for your digital executor.
Step Three: Choose a Digital Executor
You should choose someone you trust to designate as your digital executor. This person will be in charge of carrying out your wishes pertaining to the management of your digital assets.
Step Four: Store the Information with Your Attorney
It’s important to store the sensitive, valuable information outlined in your estate plane in the hands of a trusted attorney. Tell your digital executor or someone you trust about the plan so they are aware of its existence, and give them the name of your attorney so they know where to find it in the event of your death.
If you own a computer and use the internet regularly, there’s a good chance that you have quite a bit of important information and assets stored online. After you die, you’ll leave behind a digital legacy accumulated over your entire lifetime. To reduce stress and confusion for your survivors during a difficult time and ensure your wishes are fulfilled, you should update or create an estate plan for your digital assets. To begin, contact a skilled estate planning attorney at WintTer & Associates, P.A., who will be able to guide you through the process and safeguard important information until the time comes to release it to your designated beneficiaries.
This was the subject of a recent Smart Company article, titled “The business of digital life and death.” According to the article, some 70% of 65-74 year-old Americans are on Facebook, and there are 30 million accounts belonging to folks no longer alive. Not surprisingly, a growing concern among those wishing to properly manage their estate is making proper plans in the event of “digital” death.
The notion of digital death raises questions like what is an “asset” or a “special relationship,” let alone how to balance privacy and security with passing on relevant information. The article cites several factors to consider when dealing with digital assets. For example, there are no international standards on digital assets or for how to address them via estate planning.
Again, social media has not been a burning issue in estate planning as of yet. On the other hand, as younger generations begin to plan for the future, then it will become more relevant for them as they already are prolific users (owners?) of digital assets. How many more with the have over their lifetimes?
It seems every social media platform has a different approach to dealing with the death of one of its users.
Take Facebook, for instance. It protects the privacy of the deceased by securing the account and permitting a family member to request the account be removed or memorialized. In an attempt to balance sharing and privacy, Facebook has introduced a Look Back feature that can create a video of favorite moments that may be viewed but not shared.
For its part, Twitter is open to dealing with an immediate family member or estate representative to deactivate an account. Google developed an “inactive” account manager. This gives an individual access to your Google account if you die. In addition, it allows you set up a deadline in the event you do not use your Google account for a period of time. If that deadline passes without account activity, then Google will notify and allow your designated inactive account manager to access select parts of your account.
In an attempt to prevent illicit use of real accounts, social media platforms are typically moving to policies that validate family members with certified copies of death certificates, so a loved one can account for those assets and close the account.
Despite clear instructions and policies about digital closure, the original article warns that it can be a laborious task. Work with your estate planning attorney to get the most up-to-date information on digital assets and how to coordinate them with your estate planning documents. In the very least, leave an up-to-date list of accounts and passwords for your estate representatives … and let them know where you keep the list.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.