real estate – Page 3 – Digital Death Guide

After Death Planning Guide

April 30, 2015July 29, 2015 Paula

Settling Estate: What Do I Do When Someone Dies?
Settling the estate can be a trying process, particularly for those grieving. By following these practical steps and being aware of state law, you can ease the process for everyone involved. Settling the estate means safeguarding your loved one’s property during the administration process, paying debts and taxes, and distributing the assets of the estate to those who are entitled to receive it.

Note: The following legal and logistical information is most readily applicable to residents of California. However, where California’s laws or procedures differ greatly from those of the majority of other states, we have made an effort to make our out-of-state readers aware of this.

1. Initial Tasks

Handling the estate starts with a few practical tasks:

Determine Who Is the Executor or Trustee
Consult with an attorney if it is unclear who has been appointed by the will or trust.

Arrange for Temporary Care of Minor Children and Other Dependents
Your first task is to set up temporary care for any minor children and other dependents of the person who died. You might need to look into day care, hospice, or pet care services for temporary assistance until a longer-term solution can be found. For information on the legal process, see 3. Minors and Dependent Adults below.

Obtain Certified Copies of the Death Certificate
You will need death certificates for a variety of purposes, so it’s a good idea to have plenty of copies. Read our section about the Death Certificate in Immediate Help for more information.

Look for a Will or Trust
Locate a will, trust, or any other important after-death documents. For tips on locating these documents, see our section on Locating Important Documents in Immediate Help.

Collect the Mail
Collecting the person’s mail protects his or her privacy, but it also serves an important administrative function. The mail will help you identify the person’s property, because account statements and other documents relating to his or her property will arrive by mail. Bills will arrive by mail too, which will help you identify potential creditors.

Paying the Bills
After a death, bills will continue to arrive for expenses incurred during the person’s lifetime. These may include medical bills, credit card statements, utility and cell phone bills, invoices for mortgage payments, tax bills, insurance premiums, and so on. Here are a few tips for how to handle bills:

Surviving spouses may be personally liable for the person’s debts, depending on state law. If you are a surviving spouse, consult with an attorney about whether and to what extent you should pay your spouse’s bills.

If you are not the surviving spouse, do not pay bills from your own personal bank accounts. If you do, you may be deemed to have assumed responsibility for paying the debt.

Legitimate bills should be paid from accounts that belonged to the person, and such payments should be made only by someone who is authorized to make decisions, such as a Trustee or Executor. Forward bills to the Trustee or Executor, or if no one is yet serving as Trustee or Executor, hold the bills temporarily without paying them until someone is appointed to serve.

It is the job of the Trustee or Executor to identify what bills are legitimate, to fulfill creditor notification requirements, and to accept or reject creditor claims. The Trustee or Executor should consult with legal counsel about completing these tasks, because failure to fulfill the legal requirements could expose the Trustee or Executor to liability.

If creditors press for payment before a Trustee or Executor has been appointed, let them know that all bills are on hold pending appointment of an authorized legal representative. If the creditor threatens legal action or files a claim, contact a lawyer immediately.

Secure the Residence, Automobiles, and Tangible Property
Lock the person’s residence and car, and allow no one to take tangible personal property that belonged to them. Tangible personal property includes furniture, antiques, artwork, as well as personal effects like clothing, jewelry, and personal documents. If there are people you do not know who have keys to the house, consider changing the locks. If you cannot reliably secure the residence, consider packing up the tangible personal property and moving it to a secure location such as a storage locker. If people you do not know have extra sets of keys to the car, move the car to a locked garage.

Notify Credit Card Companies and Credit Reporting Agencies
Toprotect against fraud, notify credit card companies that the person has passed away, and that no one should be permitted to make additional charges to the credit cards following the date of death. Let them know that the Executor or Trustee intends to close the accounts. Send a letter to each of the three major credit reporting agencies, Equifax, Experian, and Transunion, letting them know that the person has passed away and instructing them that no one should be allowed to use his or her name or social security number to apply for new credit.

Notify the Employer
If the person was employed at the time of death, notify the employer. Arrange for delivery of the final paychecks, and deposit the income checks into a bank account held in the name of the person or the person’s living trust. Ask the employer to identify the benefits provided by the employer to the person, such as health insurance coverage, life insurance, and retirement plans.

Notify Social Security
If the person was receiving social security checks, notify the Social Security Administration immediately. Often the funeral home or service provider will send a notice as a courtesy. Otherwise, call the Administration at the phone number provided on their website www.ssa.gov. Some family members may be eligible to collect a portion of the person’s Social Security benefits. Ask the Administration to provide you with information on survivor benefits, or consult with an attorney.

Notify Veterans Affairs Administration
If the person was a U.S. war veteran, call the federal Department of Veterans Affairs and have any veteran benefit payments stopped. There are cash benefits of $300 to $2,000 to the family members of veterans depending on the type of duty and the situation at death. Also, ask the VA about burial benefits, or visit the VA burial benefits page here. You will need the person’s VA number or service number and active dates of service.

2. Administering and Distributing Assets

How the assets of the person who died are administered depends on whether he or she left a will or a trust. To administer his or her property, you must meet specific legal requirements. Failing to follow the process can result in personal liability for the Trustee or Executor. We strongly recommend that you consult with an attorney who is experienced in trust and estate administration to advise you on the legal requirements. The attorney should be licensed to practice law in the state where the person was residing at the time of death. To find attorneys in your area, look up Legal Counsel on our Local Resources page.

Revocable Living Trust
A revocable living trust, also simply called a living trust, has become a widely used estate-planning tool, partly for the purpose of avoiding probate, which is further discussed below. A trust is an agreement between a “Grantor,” the person who creates the trust and transfers property into the trust, and a “Trustee,” the person who holds the property and administers it for the benefit of “beneficiaries.” When a Grantor sets up a “revocable living trust” for his or her benefit, he or she typically also serves as the initial trustee. After the Grantor dies, the trust becomes irrevocable, and a named successor steps in to serve as trustee. The successor trustee must hold or distribute the trust property for the named beneficiaries and in accordance with the instructions set forth in the trust agreement. The trust administration process occurs privately, for example, without Court involvement or oversight.

What if Property is not in the Trust?
If the person set up a revocable living trust, but his or her property was never transferred into the trust after death, you should consult with an attorney. Depending on the circumstances and state law, such property could potentially be confirmed to be property of the trust. If not, such property will be subject to probate, as discussed below.

Last Will and Testament
If there is no trust, but the person left a will, the assets of the estate must be administered through “probate.” Probate is the Court process for settling the estate of someone who died. A family member must petition to have the will admitted to the Court and ask for an Executor to be appointed. Once the Executor receives “letters of administration,” he or she must fulfill the legal duties set forth under state law (For example file an inventory of assets, notify creditors, and pay debts and taxes.), and after the administrative tasks are completed, the Executor must distribute the estate property in accordance with the instructions in the will and under the supervision of the Court. Probate fees can run into the tens of thousands of dollars, depending on state law, and probate can take one to two years to complete. High fees and long delays are two of the reasons why many people decide to set up revocable living trusts—property in a trust generally is exempt from probate.

No Estate Plan
If the person left no trust and no will, he or she is said to have died “intestate.” An intestate estate is subject to probate, too. Under intestacy, the person’s property must be given to whoever is entitled to receive it under state law. Typically, a surviving spouse and descendants are the first in line to inherit. If the person had no surviving spouse and no living descendants, then his or her parents would generally inherit next, and if parents are no longer alive, siblings and their descendants are typically next in line. The specific rules of intestate succession vary by state law.

Small Estate Administration and Spousal Petitions
In some states, there are exceptions to the probate requirement. If your loved one’s estate is a “small estate” as defined under state law, a simpler process may be available to transfer assets to the beneficiaries. In California, for example, if the estate has no real property with a date-of-death market value of more than $50,000 and the estate has a total value of less than $150,000, the beneficiaries of the property can have the assets transferred to themselves by completing affidavits. Also in California, if the person is survived by a spouse, the surviving spouse can use a spousal petition to take title to property he or she is inheriting, instead of having to conduct a formal probate proceeding.

Joint Property
Joint property, such as real property titled in joint tenancy with right of survivorship or joint bank accounts, transfers automatically to the survivor upon the death of either joint owner. Joint property typically is not subject to probate under state law. If you are the surviving owner, you must complete paperwork to remove the owner who has died from the title. For example, for real property, an affidavit of death of joint tenant must be recorded with the County where the property is located. The affidavit removes the name of the person who died from the property and places it entirely in the name of the surviving owner.

Pay-on-Death Account or a Totten Trust
Pay-on-death (“P.O.D.”) accounts or a Totten trust automatically transfer to the payee upon the death of the owner. Like joint property, these type of accounts bypass probate. You should notify the banks where the person held accounts of his or her death, and provide them a copy of the death certificate. The banks will then contact any beneficiaries directly. If you are the beneficiary, the bank will likely ask you to complete forms to transfer the account to your name.

Life Insurance Policies and Retirement Plans
Life insurance proceeds and retirement plans are paid directly to the beneficiaries named on the policies and plans and are not subject to probate. If the person failed to name beneficiaries, however, the life insurance proceeds and retirement plans will have to be paid to the person’s estate, which could trigger a probate. Contact the institutions holding the life insurance policies and retirement plans, and inform them of the person’s death. The institutions will contact the named beneficiaries directly.

3. Minors and Dependent Adults

Guardian of the Person
If the person who died left minor children, and the other parent is no longer alive, a guardian “of the person” will have to be appointed for the children by the Court. The guardian of the person is the individual who is granted physical custody of the children and is responsible for their care and upbringing until they reach age 18.

Nomination of Guardian by Person Who Died
If the person left a will, check whether the will included a nomination of guardian. A nomination of guardian is the parent’s expressed wish for who should take custody of the children in the event that both parents have died. Courts typically place great weight on the wishes of the parents when appointing a guardian, but keep in mind that the wishes of the parents will not necessarily be determinative. The Court may appoint a different person if the Court believes that doing so would be in the best interest of the children.

Assets of Minors
If both parents have died, their minor children will also likely inherit their property. Minors, however, cannot legally manage their own assets. If the parents left the property to the children in a trust, the Trustee will be in charge of managing the assets for the minor children under the terms of the trust. If there is no trust, the Court will likely have to establish a guardianship “of the estate.” The guardian of the estate is responsible for managing the minor’s assets until age 18.

Dependent Adults
If the person who died was caring for an elderly parent or another dependent adult, check whether the dependent adult has a general durable power of attorney or a living trust. If so, the adult’s affairs should be handled by his or her agent or trustee. Contact that agent or trustee, and contact the adult’s attorney, and inform them of the person’s death. If there is no power of attorney and no trust, the Court may have to establish a conservatorship for the adult. A conservatorship is similar to a guardianship, except that the subject is an incapacitated adult, instead of a minor child. A conservatorship gives the conservator authority over the incapacitated adult’s physical care and financial matters.

To learn how to establish a guardianship for a minor or a conservatorship for an incapacitated adult, consult with an attorney.

4. Tax Considerations

Estate Taxes
If you are serving as Trustee or Executor, you should consult with legal counsel and an accountant about whether estate tax returns must be filed. The estate tax is a tax on all property owned by the person at the time of death. In addition, you may include in the estate certain gifts made during life for estate tax purposes.

Federal Estate Tax
In any given year, there is an applicable federal estate tax exemption. The value of the estate that exceeds the exemption is subject to the tax. Under the Tax Relief Act of 2010, the applicable exemption for 2011 was set at $5,000,000, and in 2012, the exemption increased to $5,120,000. The 2011 and 2012 maximum federal estate tax rate is 35%. In 2013, however, the exemption is scheduled to drop down to $1,000,000, and the maximum rate is set to increase to 55%. Anyone whose estate at the time of death has a value in excess of the applicable exemption amount in that year is required to file an estate tax return. You may need to have property appraisals done to determine accurate date-of-death values. In addition, for a married person who passes away in 2011 and 2012 with a surviving spouse, an estate tax return may be filed to preserve the “portability” of the person’s federal estate tax exemption, even if the value of the estate is below the exemption amount. For help deciding whether to file an estate tax return, please consult with an attorney or accountant.

State Estate Taxes
Also ask your attorney or accountant whether the state where the person who died was living has a state-level estate tax. The state-level applicable exemption amount and tax rate may differ from the federal estate tax. A few states, like California, have abolished the state estate tax.

Income Taxes
A personal income tax return must be filed for the first part of the last year of the person’s life through the date of death. The surviving spouse may file as married jointly on behalf of both spouses. For the second part of the year, a fiduciary tax return will have to be filed for income earned by the person’s estate or trust after the date of death. For example, if the person owned rental property held in a trust, the trust would have to file an income tax return, reporting rental income for the second part of the year following the date of death. Special rules apply to income earned during life but received only after death. Seek the assistance of an attorney or an accountant to prepare the income tax returns.

Tax ID Number
You’ll need to get a tax ID number for the Estate or Trust in order to file a fiduciary tax return. For more information on how to obtain a tax ID number, visit www.irs.gov, or ask your attorney or accountant.

Capital Gains Tax
Capital gains taxes are based on an appreciation in value. For example, if someone purchased stock in 2002 for $300,000 and then sold it in 2012 for $400,000, there would a capital gain of $100,000. That “capital gain” of $100,000 would be subject to a 15% federal capital gains tax, as well as state capital gains tax. The purchase price of $300,000 in this example is called the “basis” and the sale price of $400,000 is called the “amount realized.”

For property that is inherited, however, the basis is “stepped up” to the full fair market value at the date of death. In the example above, if instead of selling the stock, the owner dies when the stock has a value of $400,000, and the heirs of the person then immediately sell the stock for $400,000, the basis would be stepped up from $300,000 to the $400,000 value on the date of death, and there would be no capital gain. Capital gains tax could be due, however, if the value appreciates between the date of death and the date of sale. If you have inherited property and are considering selling it, consult with a tax professional about whether a capital gains tax could be due.

5. Insurance

What, if any, insurance policies of the person who died should be kept in effect following the date of death?

Homeowners and Renters Insurance
You should maintain the homeowners and renters insurance policies so long as the property remains in the Estate or Trust, to protect the Estate and Trust assets in case of property damage or lawsuits. Cancelling the coverage could actually expose the Executor or Trustee to liability for breach of fiduciary duty, if property damage or lawsuits deplete the assets as a result of lapsed insurance coverage. The Executor should inform the insurance company of the death in writing and request that the Estate be added to the policy as a “named insured” as soon as possible in order to secure the same rights as the person who died.

Automobile Insurance
You should consider maintaining the insurance policy on the car if the rates are favorable. Most auto insurance companies will continue to cover the vehicle and the new legal owner at the same rate under the “permissive use” clause of the insurance agreement. Alternatively, if the car will lay idle during the administration period, or if it will be sold, you can consider registering the car for “planned non-operation” with the state DMV and cancelling the insurance policy, to save expenses for the Estate.

Health Insurance
Thanks to COBRA (Consolidated Omnibus Budget Reconciliation Act, 1986), if the person who died received employer health insurance, surviving spouses and dependents will be eligible for continued coverage following his or her death, if they were originally covered. You can contact the insurance company or the employer in order to remove the person from coverage, while continuing coverage under the existing policy for qualifying family members.

6. Assets of the Estate

Certain assets raise unique issues that the Executor or Trustee may need to address.

Personal Residence
If the personal residence of the person who died was a rental, to save ongoing expenses, the Executor or Trustee may decide to terminate the lease, vacate the premises, and place all of the tangible property in storage until they are distributed. If the person owned his or her own home, check whether the will or trust hands over the residence to anyone. If not, the Executor or Trustee should determine whether any of the residual beneficiaries wish to take ownership of the property, provided there are other equal assets that can be distributed to other beneficiaries.

Alternatively, the Executor or Trustee may sell the property and distribute the net proceeds. A title search should be done to find out whether there are mortgages or liens against the property. If the residence is underwater, the Executor and Trustee would have to decide whether to pursue foreclosure, a deed in lieu of foreclosure, or a short sale as a means of disposing of the property. For assistance with underwater properties, you should seek the advice of an attorney and a realtor.

If the surviving spouse, minor children, or other family members were residing with the person at the time of death, they might have the right to continue living there during the administration of the estate or trust, depending on state law. Consult with an attorney about whether occupants can be allowed to remain in the person’s home and for how long, or whether they will have to move from the premises.

Other Real Estate
If the person who died owned other real estate, check whether there are tenants occupying their property. If so, look for a copy of the lease agreement among his or her papers, and arrange for rental income checks to be sent to the Executor or Trustee. Find out whether the person had hired a property management company, and if so, request a copy of the property management agreement. If the property will be sold, you should consult with an attorney and a realtor as to whether steps should be taken to remove the occupants from the premises before the property is listed for sale.

Bank Accounts
If there is no trust, the accounts of the person who died should be retitled to the name of the estate. To do so, the bank will likely request from you copies of the death certificate and the letters of administration, as well as the Estate’s tax ID number. You can consolidate cash accounts into a single Estate account for ease of administration.

Business Interests
If the person was the owner of a small business, check the will or trust for instructions as to the disposition of the business. The death of the owner can result in a sudden and steep decline in the business value. To mitigate against potential loss, you can immediately contact any co-owners or senior staff members to arrange for the continuing operation of the business, and to set up a system for collecting income and paying expenses during the administration of the estate or trust. The executor or trustee should decide as quickly as possible, based on the instructions in the will or trust, whether the business will be closed, sold, or liquidated. If the business is put up for sale, an appraiser may be needed to determine the value of the business. If the person was a licensed professional, for example an attorney, architect, dentist, or psychologist, the state may impose special rules regarding the winding up or sale of the business. Consult with an attorney to discuss the legal requirements.

Tangible Property
You should identify items specifically entrusted to anyone in the person’s estate plan documents, and secure such items until they are ready to be distributed to the beneficiaries. If there are valuable vehicles, artwork, jewels, or antiques, consider having those items appraised. All remaining items of tangible property are typically distributed equally to the residual beneficiaries—that is in shares of roughly equal value, as the beneficiaries agree among themselves. For example, one way the beneficiaries can divide up the items is to take turns choosing them; perhaps you can draw cards to determine who gets to choose first. Read our blog post about dividing family heirlooms for tips.

Another option you have is to sell the remaining tangible property– for example, in an estate sale. There are many companies that manage such sales in return for a fee or percentage of total sales, or you can conduct one yourself. The net proceeds would then be distributed to the beneficiaries. Look up Estate Liquidation & Moving services on our Local Resources page. You can also make donations of the remaining items to one or more charitable organizations. Listed below are resources for donating different types of items:

CDs and DVDs
You may be able to sell CDs and DVDs at a local used record store or online. Alternatively, you can try donating items to your local public library or school, or to organizations that are building libraries, as described in this article by Planet Green.

Computers and Electronics
There are many regional options for recycling obsolete or damaged computers or electronics, or so-called “e-waste.” Some organizations will pick up these items for you. You can search the EPA’s directory for such organizations near you.

Children’s Toys
New or gently used children’s toys, stuffed animals, or books can be donated to Stuffed Animals for Emergencies (SAFE), an organization that collects items to benefit children during emergency situations such as fire, illness, accidents, neglect, abuse, homelessness, or floods.

Art Supplies
Items like art supplies, boxes, string, fabric, and paperboard can be donated. Web search “Creative Reuse Center” to locate a center near you where you can donate such miscellaneous items to help teachers, businesses, and artists.

Wedding Dress
You can donate used wedding dresses to charitable organizations such as Brides Against Breast Cancer, a group that is funding an initiative called Making Memories to help those who are losing the battle with breast cancer.

Automobiles
You will have to determine, based on the person’s will or Trust, who is the intended beneficiary of his or her automobile. To transfer title to the beneficiary, contact your state’s DMV and complete the required paperwork. Be prepared to provide the DMV with a certified copy of the death certificate as well as copies of valid registration papers and insurance coverage. If there is no named beneficiary for the car, and no residual beneficiary wishes to have the car, the Executor or Trustee may decide to donate it rather than trying to sell it. Habitat for Humanity, for one, accepts donated cars, sells them, and uses the funds to help build and secure affordable housing for at-need families.

Leftover Medications
Similar to batteries and electronics, you should safely dispose of leftover medications. They are generally comprised of a wide variety of chemicals that can be hazardous when combined, and highly environmentally detrimental when they end up in landfills or filter into the water supply. The federal Drug Enforcement Administration recommends taking medications to local take-back centers. To find a take-back center near you, ask your local pharmacy or contact your local water management agency. You can also donate leftover medications to organizations such as the Afya Foundation and Aid for AIDS, which channel unused medications to Third World countries.

Email and Networking Accounts
Consider hiring termination services to terminate the person’s email accounts and social and business networking accounts on websites such as Facebook and LinkedIn. Each company has its own policies as to what happens to online accounts after death, and whether the person’s online personal information or records can be accessed. See 7. Digital Death for more information.

Asset Search Services
Finally, if you think the person who died may have had other unidentified property, you can consider hiring asset search services in order to locate any unknown assets, such as real property or accounts in other states. You can search state databases, or use services like Missing Money to locate unclaimed assets or property.

7. Digital Death

With so much of our lives online, digital property is becoming an increasingly important part of estate planning and settling the estate, just like physical property. When someone dies, their online accounts, including email and social media accounts, will live on unless otherwise dealt with.

Digital Estate Services
The person who died may have stipulated their wishes in their will regarding their digital property. He or she may have also used an online service. Some companies allow you to create a “digital safety deposit box” with all of your account information stored in one place, and a beneficiary listed for each account. Whoever the person named as a “verifier” will be asked to verify his or her death, and then the beneficiaries of the person’s respective accounts will be notified.

If no arrangements regarding digital property were made, or if you cannot find out if they did, you may still be able to access or delete their online accounts. Currently, Gmail and Hotmail will mail the person’s information to the estate holder. Facebook will not grant access to the account, but if you contact them you can request that the person’s profile be taken down or turned into a memorial page.

Only five states – Oklahoma, Idaho, Rhode Island, Indiana, and Connecticut – currently have laws regarding digital property assets, though more are likely on their way. For information on individual state laws where they exist, visit the Digital Estate Resource page. Or for Digital Asset Services, visit our Local Resources page.

There’s More to Estate Planning Than Just the Will

November 18, 2014November 24, 2014 Eleanore

Click here to view original web page at There’s More to Estate Planning Than Just the Will

WILLS, health care directives, lists of passwords to online accounts. By now, most people know they should prepare these items — even if they haven’t yet — and make them available to trusted family members before the unthinkable, yet inevitable, happens.

But the information family and friends will need when a loved one dies goes far beyond those much-talked-about documents, and having them can make the end of life just a little less painful for those who remain behind.

Consider the experience of John J. Scroggin, who runs a tax business and estate-planning firm in Atlanta. His father, who died in 2001, wanted to be buried in Arlington National Cemetery in Washington.

“I called Arlington and they told me I needed his DD 214 to bury him at the cemetery.” Mr. Scroggin recalled. “I had never heard of a DD 214, but they told me if I could not find it, they would put him in cold storage for six months while they found it.”

After a frantic search, “I found Dad’s DD 214 as a bookmark in a book,” he said. The Arlington burial took place. The lesson: Add military discharge papers to the documents you hand over to family members or trusted friends.

Maureen Nelson, of Walnut Creek, Calif., had a less satisfying outcome. “My mom died and told both my sister and I that she was a member of the Neptune Society, which cremates the deceased and scatters the ashes at sea,” she said.

“We called to have them pick her up from the convalescent hospital where she died,” she explained. “They came. But when they checked their records they couldn’t find her name, so they left. My sister said my mom even showed her the paperwork. But she must not have sent it in.” The lesson? If you’ve made your own burial arrangements, make sure you’ve shared the details.

The legal and emotional complexity of end-of-life planning went from theoretical to real for me recently when I began helping my 89-year-old father gather his documents. One of the many things I learned: He would like a funeral with military honors, having served in two wars. So Mr. Scroggin’s advice had special resonance.

Tips on preparing for the end of life can fill a book — as Erik A. Dewey, a writer from Tulsa, Okla., knows firsthand. It was with great difficulty that he sorted through heaps of paper and online information after his father died at age 65, a week from retirement.

He decided to share what he had learned by writing “The Big Book of Everything.”

His book, which is free online, has been downloaded about 1,000 times a month since it went up about five years ago, he said, and also includes data that people need to keep track of while they’re alive, like school and employment history and previous addresses.

Preparing for your own death is “tedious and not very pleasant,” acknowledged Mark Gavagan, who wrote the workbook, “12 Critical Things Your Family Needs to Know.”

“But if something happened to you or a spouse, would your loved ones know what you have, where it is and what your wishes are?”

While getting these items in order is more urgent for the elderly, all of us need to do it. Ask yourself if you can check off some of the most basic items.

WILL OR LIVING TRUST A will, of course, distributes your assets after you die. With a living trust, the assets you have transferred to the trust (your home, bank accounts and stocks, for example) are administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.

Despite common advice that a living trust is better than a will because you don’t need to go through probate — the court process that inventories and distributes a person’s property after death — that’s not necessarily true, said Sally Hurme, an elder law attorney with AARP.

“The benefits of trusts are overplayed and the disadvantages of probate are exaggerated,” said Ms. Hurme, who is author of the forthcoming “ABA/AARP Checklist for My Family: A Guide to My History, Financial Plans and Final Wishes.”

“There are certain circumstances when trusts are appropriate, such as if you have out-of-state real estate or a family business that will continue to be run,” she said. Otherwise, she said, a will is fine. If you have any doubt, it’s best to research it further or consult a lawyer.

If you decide to write up a will without a lawyer, using online forms, for example, be sure you do it right; a badly executed will can be worse than none at all. That’s what Lisa Kinsman’s sister found out after her husband was killed in a plane crash when he was 28.

“He had drawn up a will just before he left on the trip” that claimed his life, Ms. Kinsman, of Larchmont, N.Y., said, “but he had filled out some things incorrectly, so all his property would have ended up going to his sister instead of his wife.” She had to go through a lengthy court process to get what would have gone to her without any will.

HEALTH CARE POWERS Both a living will and a durable health care power of attorney concern medical decisions, but there are some important differences.

A living will, also called an advance directive in some states, is usually limited to deathbed concerns. It enables you to declare your desire to not have life-prolonging measures used if there is no hope of recovery. A durable power of attorney for health care, on the other hand, covers all health care decisions, and lasts only as long as you are incapable of making decisions for yourself. You can, however, set out specific provisions in the power of attorney telling your agent how you would like them to act on your behalf.

POWER OF ATTORNEY This is granted to someone you trust who can take care of your finances. Unlike a regular power of attorney, a durable one means the person can act even if you become incapacitated. It can be the same person as the health care power of attorney but in the best of all worlds, it probably shouldn’t be, as they require different skill sets, Ms. Hurme said.

“A health care proxy has got to be someone you can look in the eye and say, ‘You’ve got to be willing to pull the plug in the face of opposition from other people,’ ” Mr. Gavagan said.

But it’s not enough to write these up and put them in a drawer, or even worse in a safe-deposit box where no one has access to them.

“They should be scattered as far and wide as possible — your spouse, your children and your doctors should have your directives,” Ms. Hurme said. Her organization offers printable advance directive forms by state on its website. Caringinfo.org also provides information and forms.

Aside from the heavy-duty legal documents, here are some other recommendations from Mr. Dewey and other experts:

List passwords and logins for everything. This may be obvious, but it bears repeating. Margie Billian, a hairdresser in Rockville, Md., said of her father: “On his deathbed, he was giving me passwords and telling me where items were. This was not enough.”

Ms. Billian’s father’s business was also audited by the Internal Revenue Service after his death, which is why it’s vital to keep old tax documents for several years after someone has died.

Some things others have found helpful that aren’t so obvious include a medical history, so children and grandchildren know if there is a history of allergies, for example, or diabetes.

Make sure you list what companies and services direct-debit from your bank accounts and credit cards so they don’t continue after those accounts are closed. Mr. Scroggin said a client’s children closed their father’s bank account when he couldn’t handle his own affairs. They didn’t know an insurance policy worth over $1 million was kept active by direct debits from that account. It was terminated for nonpayment.

Don’t forget the most mundane things, like how your house works: the alarm, the sprinkler system, the key to the shed out back. Look at your house as if you were renting it to strangers for the summer and needed to leave instructions, Mr. Gavagan said.

And finally, many people suggested, think about writing a letter or letters to those closest to you to be read after your death.

“If I had one more letter from my father,” Mr. Dewey said, “It would have meant the world to me.”

What Happens To Your Digital Assets When You Die? – Infographics

October 1, 2014October 16, 2014 Eleanore

Click here to view original web page at What Happens To Your Digital Assets When You Die?

This may sound new but the truth is the digital world is ridiculously part of everyday lives of many Filipinos. And because it is part of almost every Filipino’s lives, digital assets are accumulated by them over time.

In our growing advocacy for financial literacy, not only do we teach how to build up wealth and valuable physical properties and how to take good care of them. We also would like to teach about taking care of one’s assets that are built up online.

If you are a blogger or an online seller, most probably you have accounts in online “money banks” and payment systems such as PayPal, Google Wallet, Stripe, Adyen, etc. You consider your money in these accounts as your digital asset.

And if you are a writer or an author, you may be keeping your works and files in your Kindle e-books. You know how valuable these digital assets of yours are. The same thing goes to musicians and songwriters who keep their unreleased songs in iTunes or other similar platforms.

These are some of the very important assets that are mostly overlooked by your family members and your financial advisor. That is if you have one.

In a survey data done online security company McAfee, online users worldwide value their digital assets starting from $35,000. That includes items like personal records, career information, special projects, hobbies, and music and art files.

That’s why I believe that aside from our physical assets we should also ensure that we are able to pass on to our intended family members and beneficiaries all our digital assets in the event of our death.

Here’s a very clear yet disturbing infographic from McAfee that made me think further about taking care of my non-tangible assets in my online portfolio.

The sadder part is that digital estate planning is very new and countries like the Philippines have no laws or regulations with regards to the access to your online accounts by your heirs.

However, there are some ways and measures to take so that your loved ones can access your online accounts or receive your digital assets in similar ways they would receive your money from investment in paper assets and other tangible properties like your land or house or car.

How Can A Digital Estate Plan Help Your Family After You Die?

Creating a digital estate plan will help your family on the following issues:

1) They can easily locate any of your accounts online
2) They can access your accounts and the information you left in those accounts
3) They can determine if your digital asset has any monetary value
4) They will be able to know if your digital assets have to be distributed or transferred to any beneficiary or loved one.
5) This will also helped them help you avoid online identity theft.

What Happens To Your Digital Assets When You Die And How To Create A Digital Estate Plan?

1. Keep an inventory of all your online accounts. Your log-in IDs and passwords should always be kept in a secure place. You can assign a digital executor and let him know where to access your information. Another option is using a service like PasswordBox where you can transfer your online information to a digital executor upon your death.

Digital assets may include the following:

Computers, external hard drives or flash drives, tablets, smartphones, music players, card readers, digicams, and other digital gadgets
Data and information that are stored online (cloud) or in a physical device or gadget
Online accounts such as email and social media accounts, shopping accounts, photo and video sharing accounts (Tumblr, Flickr, etc.), online storage accounts, websites, and blogs that you may manage
Domain or website names
Intellectual property such as your copyrighted songs, lyrics, poems, logos, trademarks, and other secret codes and inventions you created or written.

2. Determine and decide what to do with your online accounts. Each of your digital asset should be clearly given instructions on how they should be handled. How should each asset be handled? Know which of them should be saved, deleted, or transferred to your loved ones, friends, or business partners.

If you are making money with these digital assets then determine now who to transfer them to and who should receive all the access information after you are gone.

3. Assign a digital executor. Choose someone who is patient, highly-organized and is detail-oriented. He should be committed to listening and following your wishes as you have written in your will. And of course, he should be tech-savvy and comfortable using the Internet and different social media websites.

As much as possible, name different digital executors for your personal, financial, or business-related digital assets.

4. Save and store data and information in secure yet easy to access location. You can securely store and entrust your data to a chosen, trusted person such as your independent counsel. You may also keep them in a secure online data-keeping services, or simply store them in hardware and lock them up in your cabinet or vault.

The most important thing that you inform one or two persons you really trust such as your spouse, adult kids, and of course, your digital executor on HOW and WHERE they can access your files and data.

5. Include your digital assets in your estate plan. Again, digital estate planning is still alien to Philippine legal industry. But then formalizing your plan to include your digital assets. Look back to our first four steps on how to make your digital estate plan effectively executed after you are gone.

However, do not include your passwords and other digital asset access information in your will. Remember that a will becomes a public document when you die and that anyone can read it. Make a separate document containing all the necessary information without the need to formally change your will.

What happens to you digital assets after you die? They depend on how you will follow the steps given above.

Join the OFW UsapangPiso Facebook Group to learn how to plan your finances the right way and how to grow your money in various financial instruments and investment vehicles such as stocks, mutual funds, UITF’s, bonds, money market, real estate, and others.

Estate Planning 101: Don’t forget digital assets

August 28, 2014October 8, 2014 Eleanore

Click here to view original web page at Estate Planning 101: Don’t forget digital assets

Remember, a loved one may need to use that Internet banking password after you die.(Photo: Thinkstock)

Estate planning is one of the most difficult aspects of personal finance. As humans, we tend to procrastinate on dealing with our own mortality and often focus on seemingly more important issues facing us today. However, estate plans play a significant role in reducing frustration for loved ones, especially in the digital age.

While most people realize that estate plans should be created to help distribute physical property such as real estate or jewelry, there is a growing need to consider intangible property. The Internet is increasingly becoming the main storage of our financial lives. A recent survey from Pew Research revealed that 51% of American adults bank online, and 32% bank using their mobile phones. In fact, with almost nine out of 10 Americans using the Internet, there are a wide variety of digital assets that should be included in estate plans.

“Digital assets hold both financial and sentimental value to family and friends that should be addressed in the estate planning and administration process,” said James Lamm, an estate planning and tax attorney, to Ally Bank. “The first challenges are finding the person’s digital property and identifying which digital property is valuable or significant. Additional obstacles with digital property that you don’t have with traditional property are passwords, encryption, computer crime laws, and data privacy laws. Any one of them can make it practically impossible to do anything with the digital property unless you’ve planned ahead.”

In order to protect your digital assets, Lamm and Ally Bank recommend including them in a will or trust and designating a fiduciary to execute your wishes. You should also include an enhancement in your estate plan that grants your fiduciary access to your online accounts and data in the event of your incapacity or death.

Taking inventory of your digital assets is the first step people should take in this process. Make sure to include usernames and passwords for your electronic devices, bank accounts, utility accounts, email accounts, insurance plans, and any other significant online accounts you use throughout the year. If there is certain information that you do not want disclosed to family and friends, you need to provide instructions in your estate plan on how that information should be handled. Since a will eventually becomes public, it should merely contain instructions on where to find your usernames and passwords, such as a safe deposit box.

Even social media websites such as Facebook should be included in your inventory list if they hold sentimental value. For example, users of Facebook can have their profile memorialized upon their death by having someone send a valid request to the company. Verified immediate family members may even request the removal of a loved one’s account from Facebook.

The importance of digital asset planning explained

Uniform Fiduciary Access to Digital Assets Act Approved

August 11, 2014July 29, 2015 Paula

New Act on Access to Digital Assets Approved

Click here to view original web page at Uniform Fiduciary Access to Digital Assets Act Approved

July 16, 2014 — A new act approved today by a national law group provides comprehensive provisions governing access to digital assets. The Uniform Fiduciary Access to Digital Assets Act (UFADAA) was approved by the Uniform Law Commission (ULC) at its 123rd Annual Meeting in Seattle.

In the modern world, digital assets have largely replaced tangible ones. Documents are stored in electronic files rather than in file cabinets. Photographs are uploaded to web sites rather than printed on paper. However, the laws governing fiduciary access to these digital assets are in need of an update.

The Uniform Fiduciary Access to Digital Assets Act solves the problem using the concept of “media neutrality.” If a fiduciary would have access to a tangible asset, that fiduciary will also have access to a similar type of digital asset. UFADAA governs four common types of fiduciaries: personal representatives of a deceased person’s estate; guardians or conservators of a protected person’s estate; agents under a power of attorney; and trustees.

UFADAA defers to an account holder’s privacy choices as expressed in a document (such as a will or trust), or online by an affirmative act separate from the general terms-of-service agreement. Therefore, an account holder’s desire to keep certain assets private will be honored under UFADAA.

“I want to thank all of the dedicated lawyers and advocates who worked for the past two years to produce this model legislation,” said Committee Chair Suzanne Walsh. “We finally have a way to ensure that fiduciaries can carry out their duties in the digital age, and I look forward to working with them for enactment in the states.”

The drafting committee on the Uniform Fiduciary Access to Digital Assets Act was chaired by Suzanne Walsh of West Hartford, Connecticut. Other committee members included: David D. Biklen, West Hartford, Connecticut; Stephen Y. Chow, Boston, Massachusetts; Vincent C. DeLiberato, Jr., Harrisburg, Pennsylvania; Marc S. Feinstein, Sioux Falls, South Dakota; Gene H. Hennig, Minneapolis, Minnesota; Stanley C. Kent, Colorado Springs, Colorado; Susan Kelly Nichols, Raleigh, North Carolina; Daniel Robbins, Sherman Oaks, California; and Lane Shetterly, Dallas, Oregon. Naomi Cahn of Washington, DC, served as the committee’s reporter.

Other acts approved today by the ULC at its 2014 Annual Meeting are: the Uniform Recognition of Substitute Decision Making Documents Act, Amendments to the Uniform Voidable Transactions Act, and Amendments to Section 3-116 of the Uniform Common Interest Ownership Act.

Other drafts which were debated at the ULC annual meeting, but which were not scheduled for final approval, include the Home Foreclosure Procedures Act, the Revision to the Uniform Residential Landlord and Tenant Act, the Model Act on Commercial Real Estate Receiverships Act, Amendments to the Uniform Athlete Agents Act, the Family Law Arbitration Act, the Recognition and Enforcement of Canadian Domestic Violence Protection Orders Act, the Series of Unincorporated Business Entities Act, and the Trust Decanting Act.

The current drafts of all of these acts can be found at the ULC’s website at www.uniformlaws.org.

Tag: real estate

There’s More to Estate Planning Than Just the Will

Uniform Fiduciary Access to Digital Assets Act Approved

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