Digital Assets Raise Estate Planning Questions

More and more, we are conducting our business on the Internet, whether that’s online banking, shopping at Amazon and other sites, uploading documents and files to the “cloud,” posting videos on YouTube, or communicating with high school classmates via Facebook.

So, what happens to all of our accounts and files when we become incapacitated or pass away? Will our spouses and children have access to them? Where will they find our usernames and passwords? Who can take down our Facebook and LinkedIn pages, or would we prefer that they continue for posterity? And if we’ve saved photos, videos and other files on the cloud, who should have access to them and how long should they stay out there?

These are questions almost everyone needs to think about today and they often raise difficult security and legal issues. For example, if you become incapacitated and your daughter starts handling your finances online, is she doing so legally? Presumably you’ve given her your assent to do so, but the bank may not have a durable power of attorney on file with this authorization. As far as the bank knows, you’re still the person logging in and paying your bills or shifting your investments. Is this fraud on the bank? Does anyone care as long as your daughter is acting in your best interest?

And what if you pass away and your child, rather than notifying the financial institutions, continues to pay bills online and make distributions to family members? This is clearly contrary to law, but it could be much more convenient than going through the probate process.  Is it an instance of no harm, no foul?

States are beginning to grapple with these issues. A few states have enacted laws giving executors access to online accounts. In addition, every Internet provider has its own rules about access to user accounts, and generally users have agreed to these rules when they first enrolled, whether they actually read the service agreement or not. In April 2013, Google introduced the concept of an Inactive Account Manager who Google users can name to receive notice when a Google user has not accessed her account for a long period of time. The Inactive Account Manager has access to Google accounts designated by the user and can take whatever action is necessary to access them or shut them down.

The legalities aside, here are some steps we can all take to better manage our digital assets:

  • Inventory your digital estate. Make a list of all of your online accounts, including e-mail, financial accounts, Facebook, Mint, and anywhere else you conduct business online. Include your username and password for each account.  Also, include access information for your digital devices, including smartphones and computers.
  • Store the list in a safe place. There are a number of options for where you and your representatives can store the list, each with its own problems. If you have the list on paper, someone who you don’t trust might discover it and gain access. You can keep it in a safe deposit box or give it to your lawyer to hold in her files. In each case, your representative needs to know where it is and how to gain access. If you keep the list online, make sure you do so securely. You can upload the file to Dropbox, giving your representative access, or use one of a number of new services for this purpose. These include: LegacyLocker, AssetLock, Cirrus Legacy, and SecureSafe.
  • Give access to your personal representatives. Once you have your inventory, you will need to provide it to the people who will step in if you become incapacitated or pass away, or let them know how to find it when and if they need to do so. Make sure that they save the information as securely as you have yourself. You might want to simply give them access to one of the services listed above with a username and password that they can remember.
  • Authorizing language. Make sure the agent under your durable power of attorney and the personal representative named in your will have authority to deal with your online accounts. The Web site DigitalEstateResource.com provides sample language.
  • Update the inventory. As you open new accounts and services, purchase new devices, and change usernames and passwords, you will have to update your list so that it remains current.

Unfortunately, as the Internet makes our lives easier and quicker, it also makes them more complicated. We all need to take steps to make sure that our loved ones have the necessary access when access becomes necessary.

Four Provisions People Forget to Include in Their Estate Plan

Even if you’ve created an estate plan, are you sure you included everything you need to? There are certain provisions that people often forget to put in in a will or estate plan that can have a big impact on your family.

  1. Alternate Beneficiaries

One of the most important things your estate plan should include is at least one alternative beneficiary in case the named beneficiary does not outlive you or is unable to claim under the will. If a will names a beneficiary who isn’t able to take possession of the property, your assets may pass as though you didn’t have a will at all. This means state law will determine who gets your property, not you. By providing an alternative beneficiary, you can make sure that the property goes where you want it to go.

  1. Personal Possessions and Family Heirlooms

Not all heirlooms are worth a lot of money, but they may contain sentimental value. It is a good idea to be clear about which family members should get which items. You can write a list directly into your will, but this makes it difficult if you want to add items or delete items. A personal property memorandum is a separate document that details which friends and family members get what personal property. In some states, if the document is referenced in the will, it is legally binding. Even if the document is not legally binding, it is helpful to leave instructions for your heirs to avoid confusion and bickering.

  1. Digital Assets

More and more we conduct business online. What happens to these online assets and accounts after you die? There are some steps you can take to help your family deal with your digital property. You should make a list of all of your online accounts, including e-mail, financial accounts, Facebook, Mint, and anywhere else you conduct business online. Include your username and password for each account.  Also, include access information for your digital devices, including smartphones and computers. And then you need to make sure the agent under your durable power of attorney and the personal representative named in your will have authority to deal with your online accounts. For more information about digital estate planning, click here.

  1. Pets

Pets are beloved members of the family, but they can’t take care of themselves after you are gone. While you can’t leave property directly to a pet, you can name a caretaker in PetProtectionyour will and leave that person money to care for the pet. Don’t forget to name an alternative beneficiary as well. If you want more security, in some states, you can set up a pet trust. With a pet trust, the trustee makes payments on a regular basis to your pet’s caregiver and pays for your pet’s needs as they come up.

Contact our office at 954-515-0101 to make sure your will and estate plan takes care of all your needs.  We can be reached day or night via email: alj.law@outlook.com

Take These Three Steps When Your Child Turns 18

If your child has reached the teenage years, you may already feel as though you are losing control of her life. This is legally true once your child reaches the age of 18 because then the state considers your child to be an adult with the legal right to govern his or her own life.

Up until your child reaches 18, you are absolutely entitled to access your child’s medical records and to make decisions regarding the course of his treatment. And, your child’s financial affairs are your financial affairs. This changes once your child reaches the age of 18 because your now-adult child is legally entitled to his privacy and you no longer have the same level of access to or authority over his financial, educational and medical information. As long as all is well, this can be fine. However, it’s important to plan for the unexpected and for your child to set up an estate plan that at least includes the following three crucial components:

1. Health Care Proxy with HIPAA Release

Under the Health Insurance Portability and Accountability Act, or HIPAA, once your child turns 18, the child’s health records are now between the child and his or her health care provider. The HIPAA laws prevent you from even getting medical updates in the event your child is unable to communicate his or her wishes to have you involved. Without a HIPAA release, you may have many obstacles before receiving critically needed information, including whether your adult child has even been admitted to a particular medical facility.

Should your child suffer a medical crisis resulting in the child’s inability to communicate for him or herself, doctors and other medical professionals may refuse to speak with you and allow you to make medical decisions for your child. You may be forced to hire an attorney to petition to have you appointed as your child’s legal guardian by a court. At this time of crisis, your primary concern is to ensure your child is taken care of and you do not need the additional burden of court proceedings and associated legal costs. A health care proxy with a HIPAA release would enable your child to designate you or another trusted person to make medical decisions in the event your child is unable to convey his or her wishes.

2. Durable Power of Attorney

Like medical information, your 18-year-old child’s finances are also private.  If your child becomes incapacitated, without a durable power of attorney you cannot access the child’s bank accounts or credit cards to make sure bills are being paid. If you needed to access financial accounts in order to manage or resolve any problem, you may be forced to seek the court’s appointment as conservator of your child.

Absent a crisis, a power of attorney can also be helpful in issues that may arise when your child is away at college or traveling. For example, if your son is traveling and an issue comes up where he cannot access his accounts, a durable power of attorney would give you or another trusted person the authority to manage the issue. An alternative may be to encourage your child to consider a joint account with you.  However, this is rarely recommended because of the unintended consequences for taxes, financial aid applications, creditor issues, etc.

3. Will

Your child owns any funds given to him or her as a minor or that he or she may have earned. In the catastrophic event that your child predeceases you, these assets may have to be probated and will pass to your child’s heirs at law, which in most states would be the parents. If you have created an estate plan that reduces your estate for estate tax or asset protections purposes, the receipt of those assets could frustrate your estate planning goals. In addition, your child may wish to leave some tangible property and financial assets to other family members or to charity.

While a will may be less important than the health care proxy, HIPAA release or durable power of attorney, ensuring that your child has all three components of an estate plan can prevent you, as a parent, from having to go to court to obtain legal authority to make time-sensitive medical or financial decisions for your child.

If you have a child (or grandchild) who is approaching adulthood, give me a call to talk about these crucial issues!

Florida Nursing Home Tragedy Causes Rethinking of Disaster Preparedness

The recent tragedy in which ten Florida nursing home residents died when the nursing home lost power during Hurricane Irma is causing government officials to rethink disaster planning.

In response to the deaths, Florida Governor Rick Scott announced a new emergency rule, requiring nursing homes and assisted living facilities in the state to have generators capable of maintaining comfortable temperatures for four days after a loss of power. Fire marshals must inspect the generators within 15 days after installation. The rule goes into effect immediately and lasts 90 days, after which it needs to be renewed. Florida already required nursing homes to ensure power, food, water, staffing, and 72 hours of supplies. The governor hopes to make the emergency rule a permanent part of Florida law.

The incident is also shining light on a new federal rule that is scheduled to take effect in November. The rule, enacted in response to 215 people dying in hospitals and nursing homes in Louisiana following Hurricane Katrina, requires that nursing homes have an alternative source of energy to maintain temperatures. However, the rule does not specify that the nursing home must have a generator or the ability to power air conditioning. It also provides no funding to nursing homes to assist in purchasing the type of generator required to power an air conditioning unit.

Officials at the Hollywood nursing home where the recent deaths occurred – which is across the street from a hospital that was fully functioning at the time — is facing serious consequences. To start, the facility has lost its Medicaid funding and its license to operate has been suspended. In addition, the Hollywood police department has opened a criminal investigation into the deaths that could lead to manslaughter charges and lawsuits by patients’ families have already begun.

If you have a loved one in a nursing home or assisted living facility, or you are trying to choose a facility, you may want to ask to see the institution’s emergency management plan, especially if the area is a vulnerable one like Florida, according to The New York Times. You may also want to ask whether the plan includes a backup generator to power the air conditioning system. Many facilities do not even have air conditioning anywhere except common areas, however. No doubt, given recent events, you will not be alone in inquiring about emergency preparedness.

Uh Oh Irma! Hurricane Season is here – How to protect and prepare!

Prepare for the worst and hope for the best.  But follow these steps to make sure you are prepared:

1) If your original, signed documents are not in a safety deposit box try the following safe places to store them.  They need to be in a watertight container of some sort and put it up high in case your home floods.  Great tip!  You can keep original Wills and other estate planning documents in an air-tight plastic bag at the bottom of your freezer actually.  Freezers are well insulated and heavy, and have a way of withstanding fires, hurricanes, and tornadoes.

Extreme Danger: Category 5 Nearing Island Nations; U.S. Threat to Come
The Weather Channel: Hurricane Irma September 5, 2017

2) If you have to evacuate, either take the originals with you or make copies and bring the copies and  let trusted loved ones know the location of your originals.  You may also want to provide copies to a family member who lives out of the path of the hurricane.

4) Protect important insurance policies such as your homeowner’s, wind and flood insurance policies, health insurance and your automobile insurance policy as well.  Keep the name of your insurance carriers policy numbers and the contact numbers in an easy to locate and safe place.

6) Your Durable POA, Health care surrogacy, prescription lists and all financial assets and bank accounts numbers need to be stored.  I would suggest storing information in a cloud-based, highly protected software program so that you will have access to all information wherever you can find internet access.  I like using Last Pass (www.lastpass.com) there is a free app that will store all your logins and passwords for you.  Also, try ewallet app on your IOS devise for lists of all policy numbers and contact information.

7) Finally, document everything with a picture!  This isn’t the time for a selfie, but time to use your cell phone and take a picture of each room and all your valuables.

Please stay safe this hurricane season!  I look forward to seeing everyone in my office to update all estate documents as soon as possible.