Capital District - NY Estate & Elder Law

Make Sure the Right People Have Access to Your Digital Accounts

 

 

The world is changing rapidly, thanks to fast-moving advances in technology, including the creation of digital assets. That means your estate plan may well need an update, according to Financial Advisor in “Unlocking Clients’ Digital Lives.”

As it turns out, if no one can access your digital assets, including accounts, many could be lost, stolen by a hacker or deleted.

Forty-one states and the U.S. Virgin Islands have passed laws that allow a financial planner or other fiduciary to access digital assets upon the death of a client, and four other states plus the District of Columbia are considering similar legislation.

In Missouri, the Fiduciary Access to Digital Assets Act allows a fiduciary to be granted access to a person’s electronic records or digital assets in a will, trust, power of attorney or another document.

The way we live our personal lives and the way we conduct our personal business and financial matters have changed, so we must address digital assets in our estate planning to reflect these changes.

Challenges are created if those digital assets are not addressed in the estate plan. Striking a balance between privacy rights and the need to settle an estate, can become an expensive and time-consuming issue. One family had to bring a lawsuit to access the emails of their son, a Marine who was killed while serving our country.

If you manage your bill paying and investments online, someone will need to be able to control bill payments, especially if they are on an autopayment schedule.

Start by preparing a complete inventory of all digital assets, including a description of each one and how it is accessed with names, passwords and security questions. Find out what each online platform requires, if a fiduciary or executor needs to access those accounts. Each platform, like each financial institution, has their own forms and procedures.

This information should be stored in a secure place. Some people prefer a password-protected digital location.

An estate planning attorney can help you create or update your estate plan that fits your unique circumstances and may include your digital assets.

Reference: Financial Advisor (Aug. 21, 2018) “Unlocking Clients’ Digital Lives”

 

Children Can Contest Glen Campbell’s Will

 

Three of Glen Campbell’s children, who were intentionally left out of his will, have been given the right to contest the will by a judge, according to Wealth Management.com in “Glen Campbell’s Kids Come After the Rhinestone Cowboy’s Estate.”

Campbell, who recently passed away, left two wills from 2001 and 2006. The 2006 will names Campbell’s fourth wife Kimberly, who is the executor of the estate, and five of Campbell’s other children as his beneficiaries. Campbell went public with his Alzheimer’s diagnosis in 2011.  However, it’s not known how far back his illness began. The legal burden facing his children: prove that he lacked the needed capacity to execute both wills.

If the will is deemed invalid because of lack of capacity or undue influence, the immediately preceding will is resurrected, said one estate planning attorney who is not affiliated with the case. The previous will probably disinherited them also, which is why they must prove the invalidity of both wills.

Kimberly has told a local newspaper that she would not challenge the kid’s right to contest the wills and the judge’s decision noted the lack of opposition. She has also filed a claim seeking reimbursement from the estate for more than $500,000 to cover the cost of his medical care.

It was also reported that one of his daughters, Debbie Campbell-Cloyd, has filed for a complete accounting of all payments made by the estate, as well as payments to and from a previously undisclosed bank account. She alleges that royalties that should have been deposited into an account controlled by Campbell’s estate, were instead deposited into this account, which is now controlled by Kimberly. The singer’s former manager has power of attorney over the account.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include a blended family.

Resource: Wealth Management.com (Aug. 2, 2018) “Glen Campbell’s Kids Come After the Rhinestone Cowboy’s Estate”

 

 

Buzz Aldrin Fights Family over Charges of Dementia

 

Buzz Aldrin, the 88-year-old astronaut, who was second to walk on the moon, has filed a lawsuit accusing two of his own children and his former manager of taking advantage of their roles in managing his assets, according to MarketWatch in “Buzz Aldrin is fighting his family’s claim of dementia—revocable trusts can be flawed.”

Aldrin says the Buzz Aldrin Space Foundation is using its resources against his wishes, by funding “future educational endeavors,” instead of current ones.

The lawsuit claims that the family and former manager have forbidden him to marry someone.  It also contends that they are moving money from his accounts without his consent or knowledge, in some cases moving money to his company, Buzz Aldrin Enterprises. His children said in a statement that the allegations are a result of the increased confusion and memory loss he has experienced in recent years. They say this can be refuted by witnesses and bank or business records. They asked a Florida judge to appoint them as co-guardians because of his reported decline, so they can make decisions on his behalf.

Aldrin has a revocable trust with his son Andrew named as a trustee, which states that Andrew must give written permission before any changes can be made. Aldrin was scheduled to take a competency test in June, although the results have not been released yet.

Revocable trusts are great tools to avoid probate and allow the owner to remain in control, while they are alive. They can also be used to state who will take care of your children.  They provide flexibility for your wishes after death.  However, they are not always the best protection.

It works well, if a family sits down and has a conversation, while the person is still fully functioning. This allows them to be part of the decision-making process.

Reference: MarketWatch (July 2, 2018), “Buzz Aldrin is fighting his family’s claim of dementia—revocable trusts can be flawed.”

 

Estate Planning? Consider Family Dynamics

 

A group of professionals including estate planning attorneys, trust officers, accountants, charitable giving professionals, insurance advisors, elder law attorneys and nonprofit advisors recently attended a conference on estate planning and a survey by TD Wealth revealed that the major professional concern that kept them awake at night was family conflict, according to WealthManagement.com, in “Family Conflict Tops the List of Estate Planning Challenges in 2018.”

The article says that 44% of all planning professions consider family conflict more of a threat to estate planning than tax reform (25%) and market volatility (12%). That’s no small number and one that should be considered, while creating or revising an estate plan.

One reason for these results is that the response to the Tax Cuts and Jobs Act has received mixed reactions from estate planning attorneys and financial professionals. Some believe it may help their clients, while about a third of those queried in the TD Wealth survey aren’t sure. Only 16% feel the tax reform will have a negative impact on their clients.

Almost 75% of those taking part in the survey felt that clients who do benefit, will do so because of wealth transfer tax changes. About a third expect that clients will see the biggest benefits from new estate tax laws, followed closely by generation-skipping tax and gift tax updates.

What is the biggest challenge that people face when addressing their estate plan, according to this survey? It is naming guardians for minor children and beneficiary designations.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include dealing with potential family conflicts.

Reference: WealthManagement.com (March 28, 2018) “Family Conflict Tops the List of Estate Planning Challenges in 2018”

 

 

Revisiting Estate Plan a Good Idea … Especially Now

 

If you have not already reviewed your estate plan and taken the new tax laws into consideration, now is the time to do so, according to Reuter’s article “Your estate plan needs an update even if it is new.” Many of the provisions end in 2026. Unless you can predict with great accuracy when you will pass, you need to update your estate plan.

Even though the exemption for the federal estate tax has doubled to $22 million for couples, one of the important parts of estate planning has to do with your financial well-being, while you are alive: power of attorney forms and healthcare proxies, in case you are unable to make decisions on your own.

You also should make sure that your beneficiary designations are up-to-date, especially on life insurance policies and 401(k)s from previous employers.

The central focus of estate planning is keeping control over your assets, even after you die. You might want your responsible younger daughter to be in charge of your estate and not your older son. You may also want to skip a generation and ensure that your wealth passes to grandchildren and not your children at all.

If your family includes a special needs individual, you’ll want to make sure you have made provisions for their future with a Special Needs Trust (SNT).

Many families who find themselves dealing with Alzheimer’s disease, drug or alcohol addiction or troubled marriages, use trusts in their estate planning to protect their loved ones and control the distribution of assets.

Trusts are also used for families who wish to keep their assets private and out of probate, where information about the family’s assets are public documents. Property that is not jointly owned or set to transfer directly to a beneficiary, can end up being part of the probate process.

Finally, even with the doubling of the estate tax limit, charitable giving still has a role to play in estate planning. By leaving a substantial IRA to charity through a trust, you can avoid the taxes heirs would pay when they liquidate the account. You can also give appreciated stock to a charity through a donor advised fund and bypass capital gains taxes.

An estate planning attorney can advise you in taking a fresh look at your estate plan and making any adjustments necessary to deal with the new tax laws.

Reference: Reuters (Jan. 18, 2018) “Your estate plan needs an update, even if it is new”

 

Right Choice of Executor Is a Key to Success

 

The person in charge of your estate is the executor. Instead of thinking about whether the person they are choosing is the right person, many people just pick a close friend or relative. This can be a very big mistake, if the person does not know what they are doing, according to Forbes in "Choosing an Executor for Your Estate."

The executor of your estate will have a lot of work to do. There are often important tax decisions that need to be made quickly. The executor needs to determine what assets you have at the time you pass away.  However, they cannot just give those assets to the people you want to have them.

First, they need to go to probate court and be officially appointed to administer the estate. They will then need to determine, if you had any debt when you passed away. That debt normally needs to be paid out of your assets, before any property can be distributed.

Your executor needs to be someone who not only has the time to serve in the capacity, but also can handle administrative and financial tasks well. Put some thought into this important decision and visit with an estate planning attorney, who can advise you on creating an estate plan that fits your unique circumstances.

Reference: Forbes (May 16, 2018) "Choosing an Executor for Your Estate."

 

 

Choosing Your Child as Executor Can Create a Problem

  

Many people trust one of their own children above all other potential candidates for the responsibilities when considering an executor. However, it is not always a good idea, according to Texas Lawyer in "Mamas, Don't Let Your Babies Grow Up to be Executors."

Being an executor is not an easy job. If people do not know what they are doing, it is very easy for them to make mistakes. They can often be held personally liable for those mistakes.

An executor does more than just distribute the assets of the estate. He or she must be able to communicate with the court and with any heirs about the estate. If, for example, the executor and a sibling do not get along, there can be problems. In some cases, executors will need to invest assets for a period of time, before they can be distributed. The executors need to do that investing wisely.

Before naming one of your children to be the executor of your estate, think through whether it is a role you really want that child to have. It might be better, in some cases, to name a professional.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including the most appropriate candidate for the job.

Reference: Texas Lawyer (March 6, 2018) "Mamas, Don't Let Your Babies Grow Up to be Executors."