Tag Archives: estate

Are your digital assets in your estate plan?

Much of our life lives online these days. Email is just the beginning. Do you have a Facebook account? What about PayPal? How about an online bank account?

If you don’t include information about those digital assets in your estate plan, your family may have a terrible problem trying to access and deal with your online accounts. First of all, they will have to figure out what they are and then they will need to find a way to access them.

If your executor can’t track down your accounts, your estate may be at risk for fraud. For example, your Amazon account is probably hooked up to a credit card. If the account isn’t closed after your death, someone may hack it and make purchases which will have to be paid for by your estate.

Putting your digital assets in your estate plan is not a very simple matter. Each of the accounts you hold is governed by a terms of service agreement. You must have clicked on it when you opened the account. The agreement may limit access to the account to just you. To complicate things further, your family member will need your password for access. But it may be illegal for them to use that password. After your death, they will have to show that they have a right to access the account…but may still be unable legally to do so.

22 states have already enacted laws to help clarify how online accounts of the deceased can be accessed and managed. These laws are based on the revised Uniform Fiduciary Access to Digital Assets Act – UFADAA. And several more have introduced bills into their legislature.

There are some restrictions that are intended to protect the privacy of the deceased. For example, an executor can manage the digital property but may not be allowed to read the contents of email messages.

There are three parts to the revised UFADAA act:

1) If a service provider offers an online way for the user to state post-death wishes, the account owner’s use of that path determines what happens to the account. An example is Google’s Inactive Account Manager.

2) If there is no way provided after the account owner’s death or the account owner doesn’t use any tool available, the account owner’s directions in a will or other legal document will stand.

3) If the first two parts do not apply, the terms of service agreement that was clicked on when the account was open will determine how the digital assets are handled.

Other things you can do to be prepared are:

1) Create a list of your electronic accounts and include your log on IDs and passwords.

2) Use a password manager tool such as LastPass and share the information with your executor.

3) Think about putting all of your estate documents into an online vault like Dropbox or Everplans.

4) Put your digital asset plan into your estate documents. The more specific you can be, the better.

5) Think about writing a statement of intent in general that can apply to all of your accounts, even ones you may have forgotten about when writing your list in #1.

6) Decide and spell out clearly what information you want your executor to have access to. Do you want her to read all of your emails? You might want to limit what she can see.

7) Pick your executor carefully and make sure that person is at least somewhat tech savvy.

For more information about digital assets and estate planning, check out our website http://www.diesmart.com.

50% of Prince’s estate value goes to pay estate taxes

Yesterday, Prince’s estate had to file an estate tax payment plan. Since his estate was valued at about $200 million, the taxes are expected to be about half of that – 40% to the federal government and 16% to the state of Minnesota. Allowable deductions and exclusions will reduce that amount to 50%.

If Prince had an estate plan with trusts to benefit relatives and charities he chose, the amount of taxes due would have been very low. Instead, only about 50% will go to his six siblings and the government will take the rest.

Prince’s estate didn’t have to actually have to pay the entire $100 million yesterday; it can make payments over time. That’s a good thing since Prince’s estate isn’t very liquid. There are many entertainment assets which are still being valued and it can take a long time since their actual worth will be determined.

It’s not clear whether the IRS and Prince’s estate will agree on the value of his music catalog; it’s difficult to put a dollar value on this kind of asset. The estate can learn from the experience of Michael Jackson’s estate. He died in 2009 and yet his estate is still not settled. The tax case will go on trial in Los Angeles next month where there will be a dispute about more than $700 million in taxes, interest and penalties.

You probably aren’t worth this kind of money but even if your estate is only worth a few hundred thousand dollars, you should still have an estate plan. It will make it much easier for your heirs and will enable them, rather than the government, to share in the total value of your estate.

For more information about estate planning, go to our website http://www.diesmart.com.

A unique way to preserve your loved one…

I came across a company in Seattle, Washington called Artful Ashes. They have come up with a unique way to hold the memory of a loved one – a piece of glass art. All you have to do is send them about a tablespoon full of ashes and they will turn it into art. Their designs are in the shape of hearts or spheres, measure approximately 3 ½ by 3 ½ inches and weigh about 14 ounces. The ashes you provide are swirled through the design and can be seen in the finished piece. If you like, you can include a short inscription on the memorial.

Some people I mentioned this idea to thought it was creepy; others liked it. Regardless, it’s a beautiful piece of art and something to be considered. There are many unique ways to preserve the ashes of a loved one. This is just one more new one.

For more information about cremation and funeral planning, check out our website diesmart.com.

You don’t think you’ve been treated fairly by a deceased relative?

If someone in your family has died and you don’t think you’ve been treated fairly, what’s the first thought that comes into your head? Challenge the will. But you might want to think a second time before doing this. A will contest is very hard to win. It’s difficult to prove that someone was incompetent after they’ve died and it’s equally as tough to prove that undue influence was exerted on the deceased. Finally, some wills have a clause that will cause you to forfeit your inheritance if you challenge that will. So it might be best to just accept whatever has been left to you and then to get on with your life.

We found a blog that gave a great example of what might happen if you challenge someone’s will.

“Sam and Erica were married. It was Erica’s first marriage and Sam’s second, his first marriage ending in divorce. Sam had one child, Jason, from his first marriage. Erica did not have any children. They each had identical wills, leaving their entire estate to the other, and on the death of the survivor everything goes to Jason.

Their wills also contained a provision, requiring the surviving spouse to live at least six months after the first spouse’s death. If the survivor did not live that long, he or she would be treated as having predeceased the first spouse.

In March of 2015, Sam died. Erica filed a probate proceeding in May and submitted Sam’s will to the court. Because she filed just two months after Sam’s death, Jason objected. He argued that she had no authority to take over Sam’s estate because she had failed to survive him by six months.

Erica apparently became angry, and revoked her own will to make sure that Jason did not receive any share of her estate. Erica signed a new will a few months later (well after she had reached the six-month survivorship requirement). She left her entire estate to her sister and nothing to Jason. She died five months later.

Jason contested her new will, arguing that she had been subjected to undue influence by her sister in preparing her new will. The probate court dismissed his complaint and upheld Erica’s will. Not satisfied, Jason appealed.

The higher court affirmed the probate court finding and stated that it was clear that no one influenced her in her decision to revoke the earlier will or to do her new will. Once she revoked the earlier will, she was intestate — that is, she had no will at all — and since Jason was not her child, he would have no right to any share of her estate if she had died without a will.

Why would that make a difference? Because if she had no will prior to signing the new will, Jason had no standing to even challenge that will. According to the appellate court, there was no question that Erica had revoked her earlier will a few months prior to her executing a new will and thus Jason’s objections were dismissed.

What might Jason have done differently? Hindsight is always 20/20. Perhaps Jason should not have objected to his father’s estate when he did. If Erica had actually died in the four months after he raised his objection, he could probably have still made his legal point. In the meantime, he clearly offended her to the point that she changed her estate plan.”

Moral of the story: Think about what might happen if you challenge someone’s will. It might be better to accept what’s been left to you than taking a chance that you might end up with nothing.

For more information about estate planning, check out www.diesmart.com
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Was she swindled out of joint property?

We came across a column about a women whose husband asked her to give up the rights to their home…and 10 years later they were divorcing. The column is from The Moneyologist; it teaches a good lesson and I think you may find it very interesting. We’re publishing it in its entirety.

Dear Moneyologist,

My husband and I have been married 14 years. We live in California and I am contemplating divorce. I am 62 and he is 65. When we married, he owned a home (with a mortgage) purchased five years prior. A few years into our marriage, when interest rates fell, he refinanced the home. A couple of days before submitting the application, he asked me to sign an inter-spousal transfer of ownership (known as a quitclaim).

The reason: He said I had a student loan which had at one time been in default and we would not be able to receive a good interest rate, or that the loan might be altogether denied. He promised that as soon as the loan was approved, he would follow up by putting me back on title.

A few weeks later, we purchased a second home (cabin). Just a few minutes before going in to finalize the purchase, he asked to sign another quitclaim, citing the same circumstances. The mortgage on the cabin is underwater at this time.

It has been 14 years since this happened, and he refuses to add me to the title. He finally admitted that he indeed had an ulterior motive, as he witnessed a friend who underwent a divorce and lost a house to his former spouse and that he was not going to be “taken advantage of” if we divorced.

What are my options? I feel that I was deceived and that this constitutes fraud. About 90% of his investments were made before we were married, and I am also aware that he has made no provisions for me in his will nor named me as a beneficiary to his life insurance.

Beverly in California

Dear Beverly,

The investments he had prior to your marriage belong to your husband and he is free to name anyone from the next-door neighbor to the window cleaner on his life insurance. Now, the good news:

California — in addition to Arizona, Idaho, Louisiana, Texas, Nevada, New Mexico and Washington — treat all marital assets as community property. That means that assets acquired during the marriage are divided equally between the two spouses. “Notwithstanding an agreement otherwise, upon the death of a married person, one-half of the community property belongs to the surviving spouse and the other half belongs to the decedent,” according to California Probate Code Section 100(a). Why is that important to you? Because the refinancing of this home and the purchase of the cabin were made during your marriage, so it’s irrelevant whether your husband had you sign a quitclaim or not.

Well, not quite. A judge could look unfavorably on your husband’s behavior and your testimony (if you don’t have it in an email) that your husband did this because he wanted to prevent you from even owning the property you both bought during your marriage. There is a precedent for this: In 1996, a California woman won $1.3 million in the lottery and filed for divorce 11 days later without even telling her husband or anyone else about her windfall. A couple of years later her husband discovered her deception and sued. Superior Court Judge Richard Denner ruled that she acted out of fraud or malice and awarded her husband all of her winnings. A judge could, in theory, take a similar view and punish your husband.

Your husband’s shady behavior could end up doing him more harm than good in any divorce settlement. There are a lot of good, honest people out there waiting for you post-divorce.

Check out our website, www.diesmart.com for more information.