Tag: digital estate plans

Dangers of do-it-yourself estate planning

Dangers of do-it-yourself estate planning

Eleanore

Dangers of do-it-yourself estate planning

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In response to COVID-19, financial services firms and online companies are offering a variety of self-made digital estate plans. These low-cost plans entice anxious families to explore these options in an effort to avoid the expense of an attorney. Not everyone has the ability to correctly prepare their own documents even with the convenience of the templates offered online. Others, who try on their own, could create problems rather than solutions. It is not easy to correctly prepare estate planning documents without the aid of an attorney, but it is easy to make significant mistakes which can be costly to correct or cause irreparable damage.

One of the most common mistakes involves the misinterpretation and misunderstanding of legal terms and their significance in legal documents. What is “issue”? What are “heirs at law”? What do “per capita” and “per stirpes” mean? Oftentimes, incorrect assumptions are made about the meaning of these words and others or they are ignored and dismissed as “legal jargon”, inadvertently leading to an estate plan contrary to the intent of the grantor or testator, such as leaving assets to unintended beneficiaries.

In like manner, the disinheritance clause and no-contest clause, while often very important, are frequently misconstrued. Additionally, in self-drafted documents, the language explaining why certain people are not included is absent, consequently increasing the chances of litigation after the grantor’s or testator’s death.

Similarly, the language used by online companies or clients themselves is often vague and unclear, resulting in unnecessary conflict and, frequently, in litigation that was intended to be avoided and could have been avoided if the estate planning documents were correctly drafted by an attorney in the first place. Likewise, a failure to tailor the estate plan in accordance with the particular state’s laws can lead to mistakes and unintended financial and personal consequences.

It is not uncommon that online or self-drafted documents fail to appreciate the various tax implications involved in a client’s estate or fail to consider all the issues associated with minor beneficiaries. Also, frequently, while changing a provision in a document, a change is implanted only in one part of the document, leaving other parts of the document impacted by this change unrevised and, subsequently, creating several probable interpretations and questions about the grantor’s or testator’s intent.

Online estate plans rarely contain all the documents that constitute a comprehensive estate planning portfolio. Similarly, it is very easy for an individual to fail to appreciate the role of each separate document and their importance and relevance in each specific case. For example, an online trust document might be missing a property schedule or the health power of attorney might not contain all of the individual’s wishes and desires.

Lastly, the online or self-execution of the estate planning documents often occurs without observing legal formalities such as notarization and the presence of competent witnesses. This absence of legal formalities consequently creates an invalid and inoperative document.

In today’s world, it is tempting to prepare an estate planning portfolio yourself or online. Be aware that by doing so, you might be creating more complications than resolutions. It is worth it to get your estate plan done right the first time by an attorney.

Digital Estate Planning

Digital Estate Planning

Eleanore

By Ryan Johnson, IT Director

A news story circulated not too long ago about a lawsuit brought by Bruce Willis against Apple involving the star’s right to transfer ownership of his vast iTunes collection to his heirs when he dies. Though the story was ultimately debunked by his representatives, it raised an interesting dilemma surrounding the ownership of digital assets and the transferability of those assets posthumously.

In our increasingly digital world there is a greater need to protect the digital assets we amass over time. Digital content can be any information that is published or distributed in a digital form, including data, photographs, images, text, sound recordings, images, video, or software. Digital assets include this type of content along with one’s online persona (including passwords to and content on social media sites). Currently, there are only five states that have laws governing digital estate planning.[1] As a result, an overwhelming majority of jurisdictions lack any direct statutory guidelines governing digital asset bequeathment, leaving loved ones in a vast gray area of the law. So while traditional estate planning plays a major role in protecting both tangible and intangible assets alike, the law has been slow to evolve with emerging technology.

Traditional Estate Planning

Essentially, one’s estate amounts to anything a person owns, tangible or intangible. Traditional estates are defined as a person’s interest in land or other property and consists of items that are owned and have value.[2] As such, traditional estate planning primarily involves a three-step process to posthumously dispose of property: (1) a consultation to consider an individual’s present and lifetime needs, (2) a thorough plan designed around meeting those needs during the client’s lifetime, and (3) the creation of a unified estate plan that balances the client’s needs during his/her lifetime with the needs of his/her estate after death.[3] Our increasingly digital world has added complexity to this process by creating a whole new class of digital assets that traditional estate planning tools may not be equipped to handle.

Digital Estate Planning

Digital estate planning has other benefits beyond the ability to successfully transfer digital assets to your heirs. It also makes life easier for the estate’s executor and family members, impedes identify theft, protects the decedent’s intellectual property interests, and preserves a decedent’s digital legacy.[4]

Currently, there is no uniform standard to bequeath one’s digital estate, however digital estate planning can be something as simple executory guidelines to one’s executor listing important URLs, usernames, passwords, security codes, and other information needed to access online accounts.[5] Among the most common digital assets are licenses, which are fully transferable within a trust. To facilitate such transfers, author Joseph M. Metrek suggests providing clients with a “Digital Asset Revocable Trust” (DART).[6] Essentially, the DART, like a traditional trust, will retain ownership of digital assets beyond the life of the grantor. Consequently, a trustee would have the authority to manage and transfer authorized licensing agreements to a client’s heirs based on the needs established when the estate was created.

In addition, an executor or fiduciary can mitigate the amount of personal hardship and grievance associated with digital estate planning by following a simple set of guidelines.[7] Experts recommend that fiduciaries implement the following crucial steps when administering a decedent’s digital estate:

  • “Seek the assistance of technical help if necessary.
  • Work on consolidating virtual assets to as few “platforms” as possible (e.g. have multiple e-mail accounts set to forward to a single e-mail account.
  • Obtain statements (or data) of the prior twelve months of the decedent‘s important financial accounts.
  • Consider notifying the [individuals] in the decedent‘s e-mail contact list and other social media contacts.
  • Change passwords to those that the fiduciary can control (and remember).
  • Keep all accounts open for at least a period of time to make sure all relevant or valuable information has been saved and all vendors or other business contacts have been appropriately notified, and so all payables can be paid and accounts receivable have been collected.
  • Remove all private and/or personal data from online shopping accounts (or close them as soon as reasonably possible).
  • The fiduciary should plan on archiving important electronic data for the full duration of the relevant statutes of limitations.”[8]

Conclusion

Sadly, many will not implement traditional or digital estate plans, leaving their loved ones to sort out unfinished details of their lives. Estate planning traditionally has been a service primarily utilized by the elderly, however increasing awareness among tech savvy clients can reduce the ambivalence towards estate planning.  Essentially, digital content owners face two distinct issues; (1) whether they really own their online digital content and if so, (2) how they can pass that ownership or the use of that content on to their loved ones. One thing is for certain – without digital estate mechanisms,  such as DARTs or executory guidelines, even Bruce Willis would not be able to ensure his loved ones were legally entitled to his vast collection of blues albums.

Digital Estate Planning in a Digital Age

Digital Estate Planning in a Digital Age

Eleanore

Digital Estate Planning in a Digital Age

digital estate planning in a digital age
digital estate planning in a digital age

In more recent history, a news story circulated through social-media spheres involving a lawsuit by Bruce Willis against Apple Inc. involving his right to transfer ownership of his vast iTunes collection to his heirs. Though the story was debunked by his representatives, it raised an interesting dilemma surrounding the ownership of digital assets and the transferability of those assets posthumously. Digital estate planning in a digital age has become increasingly relevant.

In our increasingly digital world there is a greater need to protect the digital assets we increasingly amass over time. Digital content is referred to “any information that is published or distributed in a digital form, including text, data, sound recordings, photographs and images, motion pictures, and software.” [1] Digital assets include such digital content as one’s online persona, passwords to the likes of Facebook, Twitter, Linked In, and blogs. [2] Currently, there are only five states that have laws governing digital estate planning. [3] As a result, an overwhelming majority of jurisdictions lack statutory guidelines governing digital asset bequeathment leaving loved ones lacking legal recourse. Traditional estate planning plays a major role in protecting both tangible and intangible assets alike, however has been slow to evolve with emerging technology.

Traditional Estate Planning

Digital Estate Planning in a Digital Age
Digital Estate Planning in a Digital Age

Essentially, one’s estate amounts to anything a person owns, tangible or intangible. Traditional estates are defined as a person’s interest in land or other property. [4] Generally, a person’s estate consists of traditional assets defined as items that are owned and have value. [5] Accordingly, traditional estate planning primarily involves the posthumous disposition of property typically involving a three step process. [6] First, there is a consultation to consider an individual’s present and lifetime needs. [7] Second, and most importantly, a thorough plan designed around meeting those needs during the client’s lifetime. [8] Last but not least, traditional estate planning involves the creation of a unified estate plan, which balances the client’s needs during his/her lifetime with the needs of his estate after death. [9] Nonetheless, our increasingly digital world has created a whole new class of assets that traditional estate-planning tools may not be equipped to handle, including the ability to legally transfer a decedent’s ownership of digital assets. As such, digital estate planning in a digital age is evermore important.

Digital Estate Planning

Digital Estate Planning in a Digital Age
Digital Estate Planning in a Digital Age

Digital estate planning not only promotes alienability of ownership, but it also:

  • Makes life easier for the estate’s executor and family members.
  • Impedes identify theft.
  • Protects decedent’s intellectual property interest.
  • Preserves a decedents digital legacy [10]

Currently, there is no standard to bequeath ones digital estate, however digital estate planning can be something as simple as executory guidelines constituting a letter to one’s executor listing important URLs, usernames, passwords, security codes, and other information needed to access online accounts. [11] Since one of the most common forms of digital assets is licenses which are fully transferable within a trust, author Joseph M. Metrek suggests providing clients with a “Digital Asset Revocable Trust” (DART). [12] Essentially, the DART, like a traditional trust, will retain ownership of digital assets beyond the life of the grantor. Therefore, a trustee would have the authority to manage and transfer authorizing licensing agreements to a client’s heirs based on the needs established when the estate was created.

In addition, an executor or fiduciary can mitigate the amount of personal hardship and grievance associated with digital estate planning by following a simple set of guidelines. [13] Experts recommend fiduciaries implement the following crucial steps when administering a decedent’s digital estate:

  • Seek the assistance of technical help if necessary.
  • Work on consolidating virtual assets to as few “platforms” as possible (e.g. have multiple e-mail accounts set to forward to a single e-mail account.
  • Obtain statements (or data) of the prior twelve months of the decedent‘s important financial accounts.
  • Consider notifying the individual [sic] in the decedent‘s e-mail contact list and other social media contacts.
  • Change passwords to those that the fiduciary can control (and remember).
  • Keep all accounts open for at least a period of time to make sure all relevant or valuable information has been saved and all vendors or other business contacts have been appropriately notified, and so all payables can be paid and accounts receivable have been collected.
  • Remove all private and/or personal data from online shopping accounts (or close them as soon as reasonably possible).
  • The fiduciary should plan on archiving important electronic data for the full duration of the relevant statutes of limitations. [14]
Digital Estate Planning in a Digital Age
Digital Estate Planning in a Digital Age

Conclusion

Sadly, many will not implement traditional or digital estate plans, leaving their loved ones to sort out unfinished details of their lives. Estate planning traditionally has been a service primarily utilized by the elderly, however increasing awareness among tech savvy clients can reduce the ambivalence towards estate planning. Essentially, digital content owners face two distinct issues; (1) do they really own their online digital content and if so, (2) how can they pass that ownership or the use of that content on to their loved ones. One thing is for certain however, without digital estate mechanisms, such as DART’s or executory guidelines, even the likes of Bruce Willis would not be able to ensure his loved ones were legally entitled to his vast collection of Rob Zombie albums. Digital estate planning in a digital age is essential to pass on one’s legacy.

  1. What Happens When We Die: Estate Planning of Digital Assets, http://commlaw.cua.edu/res/docs/21-1/Perrone.pdf (last visited Aug 20, 2014).
  2. Michael Walker & Victoria D. Blachly, Virtual Assets, ST003 A.L.I –A.B.A 177 (2011)
  3. Alissa Skelton, Facebook After Death: What Should the Law Say?, MASHABLE (Jan. 26, 2012), http://commcns.org/10BZYRX. Oklahoma, Idaho, Rhode Island, Indiana and Connecticut have all enacted laws regarding digital estate planning.
  4. BLACK‘S LAW DICTIONARY 626 (9th ed. 2009).
  5. Id. at 134.
  6. Jerome Solkoff, Scott Solkoff, What is elder law—Estate planning –.14 Fla. Prac., Elder Law § 1:3 (2011-12 ed.), FLA. PRAC., ELDER LAW, § 1:3.
  7. Id.
  8. Id.
  9. Id.
  10. Planning for digital assets, http://www.southsidetrust.com/ckfinder/userfiles/files/Planning%20for%20digital%20assets.pdf (last visited Aug 20, 2014).
  11. Joseph M. Mentrek, Estate Planning in a Digital World. 19 Ohio Prob. L.J. 195 (2009).
  12. Id.
  13. Walker & Blachly, supra note 2, at 182-85.
  14. See generally id. at 184-85
Is AI The Key To Eternal Life?

Have You Planned For Your Digital Legacy?

Eleanore

Have You Planned For Your Digital Legacy?

As estate planners, we often receive confessions from our clients that they had a tough time getting the motivation to have their estate plans drawn up. There seems to be an inherent inertia which affects most people when they turn their mind to the morbid topic of their own death, and are forced to ask the question: “what will happen when I am gone?”

One of the common complaints we hear is that the work required to obtain the various pieces of information necessary in order to prepare an accurate and effective estate plan is daunting. The daunting nature of the information gathering phase of an estate plan is often exacerbated when we ask if they have thought of cataloguing their digital assets, to which they invariably reply: “what is a digital asset?”

Digital assets are assets which form part of your estate (which may or may not have a determinable value), but which are not usually accessible or transferrable by anyone other than you, because of the restrictive terms and conditions that are attached to the third party service providers who host such digital assets. Common examples of digital assets include your Google, Outlook, Facebook, iTunes, Twitter, Instagram and DropBox accounts and their contents.

The problem which typically arises when we discuss planning for digital assets is that it requires the individual to give consideration to the extent of their digital presence, and to decide what should be done with their various digital assets upon their passing. To date, our experience has been that the vast majority of people do not have an accurate understanding of the extent of their digital estate, i.e. they do not have a running list of their various accounts, passwords, and contents, making inventorying and planning somewhat difficult.

Fortunately, as part of our estate planning services, we offer assistance with the identification and curation of digital assets. We find that once we sit down and systematically identify key digital assets and a person’s wishes, the digital estate plans nearly write themselves. Once an individual has considered who they would like to name as their digital executor (often a different person than the person named as executor and trustee), the key elements of an effective digital estate plan are nearly fulfilled. Unfortunately, very few people are aware of the value of their digital assets, whether economic or sentimental, and as such many people pass way without giving thought to the digital assets they have left unclaimed in the ether.

While many Canadians still do not give priority to their digital estate plans, a 2011 survey conducted by McAfee in the U.S. revealed that the average online user has more than $37,000.00 USD in under-protected digital assets. The U.S. Government has been paying attention to these numbers and now recommends that its citizens create a “Social Media Will”, which we also advocate for our clients who have precious digital assets that they wish to preserve. We also recommend this for our clients with digital assets they may wish destroyed upon their passing.

Creating a simple document containing your various online accounts (financial accounts excepted for security reasons) with their passwords, security questions and other data which would allow a digital executor to carry out your instructions, is an effective tool for dealing with digital assets. However, to avoid potential breaches of security, it is advisable to consider keeping the list in a secure offline location (such as a safety deposit box). Another option would be to make use of one of the various password management software suites, such as 1Password, provided that your digital executor has access instructions to such software. While the use of password management software is an incredibly practical and easy to implement solution, any online solution, regardless of the encryption and safety protocol, will be vulnerable to online attacks. We recommend that people consider this before making use of such software.

A final step in creating an effective digital estate plan, and one that is often overlooked, is confirming the terms of service for each digital content host where the relevant digital asset is located. A number of articles have recently focused on Facebook’s controversial memorializing policy for its deceased users’ accounts, but the bigger concern relates to legal uncertainty arising from the user’s personal representative (or digital representative) accessing the deceased’s account. Such access is frequently contrary to the terms of service for most digital content hosts, and therefore potentially in contravention of legislation in certain jurisdictions, notably the U.S.

While we do not currently have any legislation in British Columbia governing access rights to the digital assets of a deceased, legislation is being pushed through a number of states in the U.S., e.g.  Delaware, granting access rights to digital assets for the family of the deceased. While some people are applauding this legislation, ask yourself whether you would want your parents or siblings having access to your private emails and social networking accounts upon your timely (or untimely) demise? Depending upon your answer, you may now understand the benefit of creating a digital estate plan.

Aside from privacy concerns, many of our clients also wish to try and preserve their online audio, visual and textual assets for future generations. For almost every generation after the Baby Boomers, family heirlooms such as photos and letters are overwhelmingly becoming stored online, leaving the question as to their treatment a pressing concern for those concerned with their digital legacies.

Viable Solutions to the Digital Estate Planning Dilemma: New Law Review Article

Viable Solutions to the Digital Estate Planning Dilemma: New Law Review Article

Eleanore

Click here to view original web page at Viable Solutions to the Digital Estate Planning Dilemma: New Law Review Article

Abstract: Countless persons are dying with out correct digital estate plans in place, leaving billions of dollars of belongings unaccounted for within the digital world. This is happening partly due to people are sometimes unaware that conventional property planning instruments and strategies, equivalent to wills, are ailing-outfitted to deal with the distinctive challenges of digital estate planning.  As a consequence, the vast majority of the Americans are vastly unprepared for the digital afterlife, unintentionally foregoing digital estate planning altogether and leaving their belongings trapped in digital purgatory.

With the continuing progress in our reliance on expertise, interplay by way of social media, digitization of particular person’s property, and additional development of recent Internet applied sciences, the quantity and worth of our digital belongings are rising exponentially. In response to this rapid want for digital estate planning and administration of digital belongings, some companies started to supply their customers the flexibility to plan for the disposition of their digital belongings upon their demise. However, because of the novelty of this space of legislation, the enterprise options presently afforded usually depart extra questions than solutions about what occurs to the person’s digital belongings, increase considerations about privateness and safety, and increase disputes over their total effectiveness within the property plan. This Essay examines the significance and growing prevalence of digital belongings, discusses the challenges going through conventional property planning within the rising world of digital property, and suggests a workable technique for the creation of a properly-developed and manageable digital estate plan.