Michigan Estate Planning Blog

Why Does Everyone Need an Estate Plan?

Twenty and thirty-year olds are busy building their lives, starting or growing careers, exploring personal goals, repaying student loans and maybe starting a family. They’re young and healthy and think nothing can happen to them—but that’s not true. A recent article from Kiplinger titled “You’re Not Too Young for an Estate Plan: 7 Essentials for Your 20s and 30s” explains why even a twenty-year old with student loans needs an estate plan.

Student loans. Federal student loans discharge upon death, so no further payments are needed, including any federal Parent PLUS loans parents may have taken out. However, for private student loans, the decision is up to the lender. If the private loan was taken out by the student, the institution may forgive the loan. However, if a parent or another adult co-signed the loan, they might be responsible for paying the entire loan. The exception: if the loan was made after November 20, 2018, the co-signer may be protected by the Economic Growth, Regulatory Relief and Consumer Protection Act. If you took out loans after getting married, the surviving spouse is likely to be required to pay the loan if they co-signed the loan or if you live in a community property state.

 

Health Care Directive and Health Care Power of Attorney. The Health Care Directive is used to tell your family what you would want if you were near death, whether by injury or illness. Healthcare providers are obligated to follow your directions if they are stated in this document. Without it, you could be kept on life support for many years, regardless of what your family wants.

 

A Health Care Power of Attorney is used to name someone you trust to act as your “agent,” if you become incapacitated. This document is focused on your care and medical treatments. It also lets your agent speak with your health insurance company, obtain access to medical records and discuss your care with healthcare providers.

 

Last Will and Testament. This document isn’t just for people with homes, families, and retirement accounts. Young people have property too—your car, your personal possessions, and whatever financial resources you may have accumulated. If you have a will, you can direct who you want to receive what you own. Without one, the court will decide who gets your possessions and your family won’t have any say about it. With a will, you can determine who receives your property, including your digital assets. You’ll also name an executor in the will—the person who is in charge of distributing your property. An estate planning attorney will create a document to comply with your state’s laws. It doesn’t have to be a complicated document, but it is a good way to ensure your loved ones know your wishes.

 

Retirement Accounts and Beneficiaries. These accounts may not be as robust as they will be later in your life. However, they are still yours. Make sure that you have named beneficiaries who you want to receive them if you die. Singles may name a sibling, parents, partner, or another family member to receive these assets.

 

Digital Assets. A digital life means you need a digital estate plan. Creating an inventory list of all of your digital accounts, usernames and passwords. If an account has two-factor authentication, indicate how another person might gain access to the account. Don’t include any of this information in your will, as it becomes a public document after being submitted to the court for probate. Tell a trusted family member where the inventory is located. If you own cryptocurrency, research how crypto assets are passed if the original owner dies.

 

Guardianship. Your will is used to name a guardian for minor children. Without it, the court will appoint a guardian, and it may not be the family member you wish it would be.

 

Don’t Forget Your Furry Friends. You can add a pet guardianship clause to a will to ensure that your pet stays with a trusted friend or family member who has agreed to care for your pet. You can also set up a pet trust to set aside funds for your pet’s care, including food, veterinary visits, toys, training and treats.

 

Reference: Kiplinger (Aug. 22, 2022) “You’re Not Too Young for an Estate Plan: 7 Essentials for Your 20s and 30s”

What are the Estate Planning Basics?

 

When it comes to planning for the future, one of the most significant things you can do is to create an estate plan. The Seattle Times’ recent article “Basics of estate planning and your digital assets” says that estate planning has changed over the years, with the advent of digital assets. The article says that by understanding the basics of estate planning and incorporating digital assets into your plans, you can effectively manage where your assets end up after you pass away. An estate plan creates a clear, actionable path forward for your family, so your assets can be disseminated according to your wishes. An estate plan also provides your family with a sense of security because they know they will be taken care of after you are gone.
An estate plan includes creating a will that outlines which assets should go to which relatives, what nonprofit donations will be made and how estate taxes should be settled, among other things. First, you can take an inventory of your assets, including real estate, property like cars or collectibles, bank accounts, life insurance policies and investments. Next, consider your priorities for protecting and caring for your family, if something happens to you.
With so much online, it is very important to include digital assets in your estate plans. These assets include your financial accounts, movies, music, photographs and cryptocurrency. These can and should be included in your estate plans, if you value them and want your family to be able to access them after you are gone.
Just like your physical assets, first you should take an inventory of your digital assets, including making a list of your login information and passwords. It is also important to include notes about what you would like to have done with these accounts, whether that means transferring them to another person, closing them, or some other action. For more complicated assets like cryptocurrency, you must keep records stating what you own and how it can be accessed because cryptocurrency often does not come with a paper trail like a regular bank account.
It is a prudent and worthwhile exercise to plan the ways in which your assets will be handled after your death. This is for both your own peace of mind and your family’s future security.
Making sure to include your digital assets will allow your heirs to fulfill your final wishes in all matters. Begin the process with a few basic steps to give those around you a clear path forward, after you are no longer with them.
Reference: Seattle Times (Jan. 31, 2022) “Basics of estate planning and your digital assets”

Can I Avoid Password Problems for My Family in Estate Planning?

Barron’s recent article entitled “How to Ensure Heirs Avoid a Password-Protected Nightmare” explains that even financial planners may not consider until too late, how difficult it can be to recover and access a loved one’s accounts after they pass away. Since we are much more paperless with our finances, getting access to these accounts can be extremely hard for heirs, if they don’t have the right information. That’s because digital accounts are protected by encryption, multifactor authentication and federal data privacy laws.
Create a list of digital accounts and instructions on how to access them. The list should include not only financial assets but social media and other accounts. Digital accounts that loved ones or advisors may need to access following a death include:
Traditional financial accounts
Cryptocurrency accounts
Home payment and utilities accounts
Health insurance benefits
Email accounts
Social media
Smartphone accounts
Storage and file-sharing
Photo, music and video accounts
E-commerce accounts
Subscriptions to streaming services, such as Netflix, newspapers, music services; and
Loyalty/rewards programs for airlines and hotels.
Create a list of accounts, passwords and access information, keeping it up to date as information changes and letting a trusted person, such as an executor or estate planning attorney, know its location. Without a password list, it can be a nightmare.
Note that with every digital account, there’s a specific process that heirs must undertake to gain access, which should then be communicated clearly in your estate plan. Make a list of all digital assets and their access information, but don’t include this in the will itself, since the document is part of the public record in probate.
Being prepared well ahead of time can help your family avoid additional stress and delays as they probate your estate. It also ensures that they don’t forfeit significant financial assets concealed behind an impenetrable digital wall.
Reference: Barron’s (Dec. 15, 2021) “How to Ensure Heirs Avoid a Password-Protected Nightmare”

A New Digital Assets Proposal

What happens to digital accounts after someone passes away? This has become a hot button issue in estate planning and technology law. Currently, most states do not have laws that would grant executors or others access to digital accounts. This means that access is determined by the terms and conditions and privacy policies of the technology companies that operate the websites the accounts are on. This has caused headaches for many families attempting to wrap up a loved one's digital affairs. The Uniform Law Commission has come up with a plan called the Uniform Fiduciary Access to Digital Assets Act that, if adopted by the states, would end this problem. However as National Public Radio points out, in “A Plan To Untangle Our Digital Lives After We're Gone,” the idea is not popular with all technology companies. The Commission states that its proposal would give an executor access to accounts in the same way that a family has access to real world items, such as photographs and letters. However, technology companies say the proposal could create privacy concerns for third parties as their communications with the deceased would be accessible. It is clear that something needs to be done about the problem with a deceased's digital accounts. Some technology companies, such as Yahoo Japan, have taken steps to allow account holders to choose who has access to what after they pass away. Other companies are waiting for legal solutions. Still others are satisfied with the current landscape. Regardless what happens in the future on the legal side, how your digital accounts will be handled is something that you need to plan for on the practical side in your estate plan.

Reference:  National Public Radio - NPR (July 23, 2014) “A Plan To Untangle Our Digital Lives After We're Gone”

For more information, see www.jerryreiflawyer.com

Your Digital Life – Will It Outlast You?

Most people today have numerous online accounts. They have email accounts for work and personal use. They have accounts on sites like Facebook and Twitter. Some people also have blogs or even their own websites. If you check the privacy policies on the sites where you have accounts, you will notice that most sites will not give out any information about your accounts without your prior permission and some will not give out information without a court order. As a recent New York Times article, “How to Digitally Avoid Taking It to the Grave,” points out, if you do not plan ahead regarding how someone else can access your accounts after you pass away, then you risk the loss of those accounts. In other cases, accounts you would want to carry on might disappear. It depends on the policies of the sites where you have accounts. Some states have passed laws granting executors access to digital accounts after the owners pass away, and there is an effort underway to pass a uniform law in every state. However, until the law catches up with today's current digital environment, you need to have a plan. At a minimum, you should make sure that a list exists of your digital accounts. You should make sure someone will be able to find the passwords for those accounts. You also need to store that information somewhere it can be found by someone you trust. This could be done by including that information in your will, but that could make updating the digital information cumbersome. You could also give that information to a trusted individual before you pass away. You do not need to tell them now what your passwords are. You just need to tell them where to find the information. Reference: New York Times (July
2, 2014) “How
to Digitally Avoid Taking It to the Grave"

For more information, see www.jerryreiflawyer.com

Gaining Access to Digital Assets: Could Your Heirs Be Committing a Crime?

It can be very difficult for your family members to gain access to your email accounts and social media accounts after you pass away. It can be even more difficult for them to gain access to your online financial accounts. For this reason, attorneys always stress that you should plan ahead and make sure you have come up with a good way for someone you trust to access any accounts you have. Recently on PBS News Hour, another potential problem with access to digital accounts was raised in a segment titled “Dead and Online: What Happens to Your Digital Estate When You Die?” One of the interviewees points out that a family member attempting to gain access to your accounts after you pass away could be in violation of federal privacy laws and computer fraud and abuse laws. It could also be a criminal violation to break the terms of service of the website your family member is trying to gain access to in some circumstances. As unlikely as it is, a family member trying to gain access to a deceased's accounts may be criminally charged. It is not a good idea to leave it up to chance. You would not want to actually encourage your family to break the law. This is just another reason that you need to plan ahead and come up with a way that someone can access your online accounts after you pass away. Reference: PBS News Hour (July
12, 2014) “Dead and Online: What Happens to Your
Digital Estate When You Die?

For more information, see www.jerryreiflawyer.com

Even Geeks Confounded With How To Manage Post-Mortem Digital Assets Saginaw, MI

As our daily lives ascend ever higher into technological progress, the practical problems associated with how to manage and even transfer that technology increases. To the extent you have a “digital life,” what arrangements have you made for your “digital afterlife,” let alone the future of your digital assets? How do you plan for that? Digital estate planning is a hot topic, especially for today’s “connected” generations. Regardless whether they can remember life before the microchip, Americans now live a significant part of their lives digitally. Not only is this new life overwhelming for end-users, but the very architects of our digital world are confounded with the intersection of digital life and death. A recent article in ScienceNews titled “Computer scientists grapple with how to manage the digital legacy of the departed,” considers the issues confronted by computer scientists with Congress not far behind. When it comes to estate planning for your digital assets there are a few tools like the “inactive account manager” from Google. Overall, however, the field is simply too new. Fortunately, the key to planning for your digital assets really is not – legally – all that different from planning for your non-digital assets. A good start is listing all of your digital accounts and passwords, then making sure the agents and fiduciaries over your estate plan can access them when needed.

Reference: ScienceNews (June 10, 2013) “Computer scientists grapple with how to manage the digital legacy of the departed”

For more information, see www.jerryreiflawyer.com

 

Related articles

Digital Assets Should Be Included in a Complete Estate Plan

Estate Planning for Your Digital Assets Saginaw Michigan

Technology has made the world we live in largely digital. So it should be said that our “online lives” need to be included in our estate plans. We have to remember that we aren’t only protecting our tangible assets, but also our digital ones. So, have you planned your estate to account for your “digital assets”? If you have not, then you are leaving a big estate mess for your loved ones to clean up. This was the subject of a recent Forbes article titled “You Just Locked Out Your Executor And Made Your Estate Planning A Monumental Hassle.” The original article offers an expansive look at all of the digital assets to consider, as well as many ways making your assets “digital” can be helpful. Here’s the most important warning from the article: to enable your beneficiaries and your executors to secure your digital assets and square away everything from bank accounts to twitter accounts, you must provide your passwords. Thereafter, the sky is the limit! If you are a tech-savvy, then likely you can think of new ways to make technology work for you. For example, there are new services that even allow you to store your living will online, providing easy access by your doctors. Furthermore, even simple data storage capabilities become meaningful when you realize that the entire family photo collection can be turned into something every family member can “hold” and view with pleasure on demand – once it’s digitized. Your digital well-being ought be secured just as much as your non-digital assets, so don’t forget to make proper plans and take advantage of the evolving technology.

For more information see www.jerryreiflawyer.com

Reference: Forbes (October 18, 2012) “You Just Locked Out Your Executor And Made Your Estate Planning A Monumental Hassle

Protect Your “Virtual” Property

Technology and cyberspace have definitely changed the way we conduct business and communicate with others. Have you considered how this will impact your Estate Plan? What happens to all of your emails, passwords and other “virtual” property when you are gone? Dealing with digital assets can be a tricky business, often in ways that aren’t readily apparent. Nevertheless, digital assets are both vital and newsworthy topics for estate planning. For example, consider an article by SmartMoney titled “Protecting You Virtual Estate” and the similar article by The Wall Street Journal titled “With Estate Planning, Don’t Forget Virtual Assets.” Both are worthy of your attention. Digital assets can range from personal data held in social websites to intellectual property, or even domain names. Then again and more importantly, a growing majority of people do their banking, investing, and tax-paying online. Is this starting to hit closer to home now? Few states have laws in place to account for the postmortem transfer of digital assets, so careful planning is important. Don’t forget to protect your “virtual” property just as you would your tangible assets. You wouldn’t want valuable information to be lost to your heirs.

Reference:

SmartMoney (July 25, 2012), “Protecting You Virtual Estate”

The Wall Street Journal (July 28, 2012) “With Estate Planning, Don’t Forget Virtual Assets.”