Category: Estate Planning

Planning for Your Digital Estate

Planning for Your Digital Estate

Traditionally, digital assets and digital estates is not something that comes to mind when planning someone’s estate. In this day in age, people are storing a lot of property and information on digital media platforms and continue to sign up for more accounts from different providers. A 2011 McAfee Survey revealed that people in the U.S., valued their digital assets at nearly $55,000 per person.  Protection of your digital estate and planning on what will happen to it after you pass away continuously grows as a relevant issue.  Your digital estate refers to your rights to all your digital media accounts. These rights can be inherited after someone dies. Digital estates can include online accounts, passwords, contracts, receipts, money transactions, medical information or personal websites.  This digital presence may also involve bank account information, writing, images, and any social media content. The process of handing over personal digital assets to other people after you die, or digital inheritance, is growing more important and there are many ways to plan for it throughout your lifetime.

In some instances, what happens to your digital media depends on the Terms and Conditions you agreed to (likely without reading) when you created your account.  Different social media providers and websites have their own process regarding what to do with someone’s account after they die. For example:

Facebook:  Provides the option of turning your page into a memoriam page so people may still view your pictures and memories. Some aspects of your account are changed. For example, no one will be able to access your account and only your confirmed friends will be able to view your page.

Dropbox:  Accounts are deleted if accounts are inactive for 90 days.

Google:  Gives access to an ‘Inactive Account Manager’ that can me managed by a delegated user. Family members or associates of the decedent may submit a range of requests.

Myspace:  Gives the option to create a memorial account.

Twitter:  Does not allow access to anyone but will close accounts of deceased persons and archive posts upon request.

YouTube:  Grants access to other people under certain conditions. YouTube follows Google’s ‘Inactive Account Manager’ system.

LinkedIn:  has its own process of removing profiles of deceased members.

Dealing with social media providers after an account holder dies can be problematic, costly, and time consuming.  For example, the family of Justin Ellsworth, a Marine who fought and died in Iraq, got into a long legal battle with Yahoo to gain access to their son’s account. It was part of Yahoo’s terms and conditions that they do not give access to the account to anyone other than the account holder. Eventually, the court ordered Yahoo to grant access to Justin’s family. Issues like this can easily be avoided through several different ways.

The easiest thing you can do is make a list of all the information needed to get into your phone, computer, or online accounts. Make sure to have this information available only to people whom you trust. Simply having this available in case anything happens to you is the easiest way to ensure that your digital assets will not sit in limbo after you die.  You can manage your passwords through apps like 1Password and LastPass.  Other sites, like SafeBeyond, will distribute your digital assets to whom you designate as your digital heir after you pass.

Adding language to your estate plan regarding your digital assets may also be a good idea.  Simply giving someone a blanket authorization to access your accounts may not be appropriate.  Putting language in your estate plan regarding exactly who will have access to certain information may be more comforting because, while access to your accounts are important, some information is better kept private. It is important to keep your estate plans up to date and specific because digital technology is rapidly changing and laws are consistently adapting to these changes. Be sure to discuss these issues with your attorney when you set up your estate plan. If you have an estate plan in place, it is never too late to make changes to incorporate your digital estate.

Why You Want (And Need) an Estate Plan

Why You Want (And Need) an Estate Plan

Estate planning is the process of anticipating and arranging, during one’s life, for the disposal and management of his or her estate before and after that person’s death.  Many people fail to recognize the importance of an estate plan and its numerous benefits. Here are a few reasons why everyone needs an estate plan:

Avoid Probate

Probate is a system filled with default rules that spell out what to do with your assets after you pass away. It is filled with a lot of complex rules that can be tough to understand without consulting with legal professionals. Probate can be a long and drawn out process, especially if you have a lot of assets to your name (real estate, automobiles, financial accounts, etc.).  There are many different ways to avoid probate by estate planning, such as setting up a simple revocable trust, creating joint bank accounts, or using life insurance to direct assets. Avoiding probate will help distribute your assets more quickly with fewer headaches.

Protect the People You Care About

Generally, there are two major issues that people are concerned with when thinking about their decedents after they die. First, people are concerned with who will care for their children. Estate plans allow you to appoint someone whom you trust to be the guardian of your child. While this appointment is not a guarantee, courts strongly favor the person named as guardian in a duly-executed will or power of attorney.  Second, some people may be worried that their expected heirs will not make the right decisions for a variety of reasons. To safeguard your children or other beneficiaries, using a trust and having a trustee can allow an independent person to assist you loved ones with managing their assets. There are methods to protect your children’s inheritance from a divorce or even bankruptcy.

Maintain Control

As mentioned above, if you pass away without an estate plan your assets will go through the default probate rules. These rules often distribute your earnings to your spouse and children. In Massachusetts, if you or your spouse have a child from outside of the marriage, your estate could partially pass to your children, regardless of their age. With an estate plan are in the driver’s seat, and you will decide exactly where to distribute your money and assets in amounts of your choice.  Moreover, you will have the ability to gift property to people or charities outside of your direct family members.

Tax Advantages

Many people do not realize that their estate may be subject to either federal or state estate taxes or both. A very common way to mitigate these estate taxes is by setting up a revocable living trusts. For married couples, a simple trust may be the difference between paying tens of thousands of dollars in estate taxes and paying nothing. Additionally, if you own permanent or whole-life life insurance, there are estate planning strategies that can move the entire life insurance benefit out of your taxable estate.

Privacy

Most people do not realize that a will becomes a public document after you pass. The will if filed with the local probate court and is accessible to the general public. One of the key aspects of the modern estate plan is the living trust, which is a private document that is not subject to recording, publication, or filing with a court. Today a modern will looks to the trust as its primary beneficiary and this estate-plan structure allows you to keep private the people to whom you are leaving your legacy.

Different people have different estate planning goals, needs, and concerns based on a number of different factors. Everyone’s estate plan is different. Consulting with an attorney is the best way to figure out how you should structure your estate plan. The attorneys at Long, Knight, Huff-Harris, & Hagan, P.C. are experienced in the realm of trust and estate law, and we would be happy to help you navigate the process of creating an estate plan that best serves your needs.

Contact us today for more information.