You bet it is. In fact, the Australian government recently announced that pension applicants must declare their cyber currency such as Bitcoin. “By including Bitcoin and other digital currencies on one of its standard forms”, the Australian government is recognizing that these are definitely a form of wealth. Many countries are still wrestling with where digital currency fits but Australia has accepted it as part of mainstream finance. If you have cybercash, make sure you are considering it in your estate planning and are not letting it get lost in the confusion about what to do with digital assets. It’s real money and you should treat it as such.
For more information about estate planning, go to www.diesmart.com.
Category Archives: Beneficiary Basics
What has Facebook done to the accounts of deceased people?
Facebook recently announced that they have changed their rules related to memorializing the account of a deceased person. In the past, Facebook determined who could see that memorialized page. Now, the changed rule says that the memorialized page can be seen by the same people as were able to see the page of the living person. In other words, the decisions made by that person will be honored after his or her death.
Once the account has been memorialized, there can be no modifications to the site. No friends can be added or deleted, no photos can be modified and no content that was posted by the site owner can be removed. However, if the privacy settings set up by the deceased allow this, friends may be able to share memories on the memorialized timeline. And anyone can send private messages to the deceased person. Why someone would want to do this, I don’t know. However, it is now allowed.
If you wish to memorialize a loved one’s Facebook page, the place to get started is with the request for memorialization form. You will be asked for a link to the deceased’s Facebook page. You will also be asked your relationship to that person, his or her year of death and proof of that death, i.e. a link to an obituary or news article.
Once Facebook has reviewed and approved the submission, the page will be memorialized.
To read more about social media accounts of the deceased, go to www.diesmart.com.
Another actor did it wrong. Do you have your plans in place?
Julie Garber, in her weekly blog, wrote about another person who did it wrong. When actor Paul Walker died in a terrible car crash on November 30th, 2013, he left an estate estimated to be worth at least $45 million. However, he had done no estate planning and left no will. He was only 40 years old and probably thought he had plenty of time to get his affairs in order. His parents, ex-wife and girl friend of seven years are now fighting over who should inherit.
According to California intestate laws, the entire estate should be inherited by his daughter, Meadow. Since she is only 15, someone needs to be responsible for managing to estate until she turns 18. Her mother is her guardian but is not necessarily the one who will control the money on her behalf. Since her parents believe they should manage the estate, the case will have to go to probate court.
And what about his long term girlfriend, Jasmine? She won’t see a penny.
Have you done estate planning? Is all of your paperwork in order? Or are you, like Paul Walker, leaving a mess for your loved ones?
For more information about estate planning, go to www.diesmart.com.
Access to online bank accounts a problem after death
In the “old days”, a paper trail was usually very easy to follow when someone died. You could find their bank account statements, credit card and utility bills and pension and brokerage account information all tucked away in a file cabinet or a drawer. Then you called the contact numbers provided to notify them about the death.
Today, it’s not so simple.
Many of us do our banking online. All we do is log in, click on those merchants we wish to pay, insert the amount and we’re done. If we want to transfer money or even deposit a check, no paper has to be used. Everything is done electronically.
Bill paying has also gone paperless. I can’t remember the last time I received a bill in the mail. Today I just receive an electronic notification that my bill has been processed for payment.
If I want to know how my portfolio is doing, I log into my brokerage account to check. I no longer get huge stacks of paperwork every month detailing the value of each investment. It’s the same with my pension – I just go online and review the numbers.
This is great except for one thing. It leaves no paper trail for our loved ones to follow when we die. If we don’t keep good records that list all of the accounts that we manage online as well as the passwords and other information needed to access them, they may never be found and some of our assets may be floating around in cyberspace forever.
For more information about how to plan for incapacity or death, go to www.diesmart.com.
Unclaimed property – Are you a beneficiary but you don’t know it?
Over the last five years or so, a study has been conducted to determine how insurance companies ensured that beneficiaries of life insurance policies were notified that a relative with a life insurance policy had died.
The study was initiated by California Comptroller John Chiang, who used a Connecticut auditing firm to examine the payment practices of 21 life insurance companies nationwide. The Controller’s investigation “has revealed an industry-wide practice of companies both failing to pay death benefits to the beneficiaries of life insurance policies and ignoring their legal duty to turn the money over to the State for safe keeping. Instead, companies would draw-down the policies’ cash reserves in order to continue collecting premium payments from the deceased. Once the cash reserves were depleted, the company would cancel the policy. Past audits also found that insurers did not routinely cross-check the owners of dormant accounts with government databases listing the deceased. In other cases, companies had direct knowledge of the policy owner’s death, but still did not notify the beneficiaries.”
When questionable practices were uncovered, lawsuits ensued. The premise of one of the latest was that insurers used the Social Security Death Master File to determine whether those insured who had living benefit riders to annuities had died and, if so, they acted promptly to stop payments. However, the Death Master File and other means weren’t used as often to ensure that beneficiaries of life insurance policies were promptly notified that a relative with a life insurance policy had died, and the funds from that policy paid out.
In the case of one recent lawsuit, the lead plaintiff claimed that he was notified only in 2010, four years after the death of the insured, and then only by the state of Illinois Treasurer’s Office…not by the insurance company. He received only a small sum, and it wasn’t until June 2012 that a larger sum was paid, without a good explanation.
Earlier this month (June 2013), Mr. Chiang reached a settlement on behalf of the state of California and its residents with 11 insurance companies who had been found to have underpaid life insurance benefits. The agreements he reached required the 11 companies to do the following:
- Restore the full value of all impacted accounts dating back to 1995;
- Fully comply with California’s unclaimed property laws and cooperate with the Controller’s efforts to reunite these death benefits, annuity contracts and retained asset accounts with their owners or, in many cases, the owners’ heirs;
- Pay the policy beneficiaries 3% compounded interest on the value of the held amounts from 1995, or from the date of the owner’s death, whichever is later.
If the benefits are not paid to the heirs within a specified period of time, the law requires businesses to send the list of abandoned property to the state. In California, the period of time is three years; it varies by state. In many states, this has become a large source of revenue. However, the states’ first goal is to return the money to its rightful owners.
Many other states have followed California’s lead, filed suits against the major insurance companies, and will also benefit from California’s settlement with those 11 companies.
To learn more about beneficiaries and estate related topics, go to www.diesmart.com.