Estate Planning

An Overview of Your Digital Assets

An Overview of Your Digital Assets

Digital property (or digital assets) can be understood as any information about you or created by you that exists in digital form, either online or on an electronic storage device, including the information necessary to access the digital asset. All of your digital property comprises what is known as your digital estate.

What Is Digital Property?

For the purposes of digital estate planning, digital property can be broken down into three main categories:

  • Personal digital property

  • Personal digital property with monetary value

  • Digital business property

Personal Digital Property

Personal digital property includes:

  • Computing hardware, such as computers, external hard drives or flash drives, tablets, smartphones, digital music players, e-readers, digital cameras, and other digital devices

  • Any information or data that is stored electronically, whether stored online, in the cloud, or on a physical device

  • Any online accounts, such as email and communications accounts, social media accounts, shopping accounts, photo and video sharing accounts, video gaming accounts, online storage accounts, and websites and blogs that you may manage

  • Domain names

  • Intellectual property, including copyrighted materials, trademarks, and any code you may have written and own

7 Reasons People Delay Estate Planning

7 Reasons People Delay Estate Planning

According to a survey conducted earlier in 2019, only 40% of American adults have a Will or Trust. That percentage drops dramatically for younger age groups. For example, only 19% of people ages 18-34 have a Will or Trust.

So what’s the big deal?

As Baby Boomers pass away, experts predict that over $68 trillion (with a ‘trill’) in wealth will be transferred over the next 25 years. And the estate planning of those Boomers will control where all that wealth goes.

Despite the hugeness of those numbers and the importance of estate planning, it is easy to procrastinate when it comes to actually setting your affairs in order. Here are the top 7 reasons (in no particular order) people give us to explain why they delay estate planning:

1. “I’m too young.”

First of all, you are never too young to have an estate plan. I wrote a series of articles specifically geared toward estate planning for Millennials. (Or you can substitute “Millennials” for “Gen Z” or whatever weird thing we are on now.)

Whenever young people say “I don’t have enough assets for an estate plan” or “I’m going to wait until I have a family,” what they are really saying is, “I don’t plan on going anywhere anytime soon.” Because young people don’t die, they live forever.

Do I Need to Amend My Will or Trust?

Do I Need to Amend My Will or Trust?

When I was a kid, I really wanted a remote-controlled hovercraft.

I thought it looks awesome. I mean, just the idea of a flying remote-controlled car was amazing. So I saved up my money and bought one. Can you guess what happened next?

If you said, “I used it a few times and then never touched it again,” then you would be correct. The thing took like 37 hours to charge and you could only use it for two minutes until you had to charge it again.

I was really upset about it at the time. I kept thinking, “If only I could exchange this toy for another!” Unfortunately for me, Toys “R” Us hates children and refused to give me my money back. And that’s why I became a lawyer. For justice.

Here’s the good news: there is no Toy “R” Us return policy for your estate planning documents. You can update them, change, exchange, or revoke them entirely as long as you are alive and competent (with a few exceptions).

When should I amend my Will or Trust?

Some attorneys may try to convince you that your Will or Trust needs to be amended whenever you go through any significant life change. Buy a new house? Amend your Trust. Have a grandchild? Amend your Will. Finish binge watching Friends? Amend, amend, amend.

How do I Transfer Real Estate into my Trust?

How do I Transfer Real Estate into my Trust?

Have you ever solved a Rubik’s Cube?

Of course not. They are scientifically impossible. Just a way to keep kids quiet on long road trips.

But you’ve definitely seen a Rubik’s Cube at some point. And although the concept seems simple enough—get the same colors on the same side of the cube—all the moving parts and three-dimensional reactions make your brain hurt.

Estate planning sometimes seems like a Rubik’s Cube.

You have all of these lengthy legal documents with strange words that do all sorts of different things that an attorney explained to you once but which you have now mostly forgotten.

Take trusts, for instance. You generally get a trust to avoid probate. But by itself, a trust is just some paper. It may be fancy paper—and it’s likely expensive paper—but it’s still just some paper. And paper alone usually does not avoid probate.

Funding Your Trust With Real Property

Real property (which I will use interchangeably with “real estate”) is often the most valuable type of asset a client owns. That makes it all the more important for those assets to avoid probate.

How do you do that? By funding your trust.

What's on Your Estate Planning “Bucket List”

What's on Your Estate Planning “Bucket List”

Everybody knows what a “bucket list” is, right?

It’s a list (duh) of things you want to do before you die (i.e. “kick the bucket”). I won’t get into the weeds about the concept, so if you want to learn more about bucket lists and also ugly-cry through two boxes of Kleenex, watch the 2007 film The Bucket List with Morgan Freeman and Jack Nicholson.

But back to the blog.

Just as you and Morgan Freeman and Jack Nicholson have a bucket list for life, you should also have a bucket list for estate planning. Ask yourself: What do I need to do to arrange my affairs before I die?

Estate planning is about more than just legal documents. A good plan means accounting for your assets and providing the information, documents, and knowledge necessary to ensure a smooth transfer of those assets to the people you want to have them.

To help you create your own estate planning bucket list, here are 10 tips you can use to organize your estate before you die:

1. Get a Will or Trust.

Of course the first item on the bucket list is to create an actual estate plan. I’m an estate planning attorney writing on an estate planning blog. What did you expect?

Formal estate planning documents such as a Last Will and Testament or a Living Trust are crucial to make the administration of your estate as easy as possible. Without them, your estate could be tied up in messy probate — in some cases for years.

What is a Nomination of Guardian?

What is a Nomination of Guardian?

You are going to live forever.

You can eat whatever you want and drink whatever you want and run for as long as you want forever. Because you are invincible and nothing bad will ever happen to you.

Did you buy that? No?

Unfortunately, people don’t stay young and healthy forever. We don’t like to think of a time in the future when we will no longer be able to take care of ourselves, but it is incredibly important that you do so. Ask yourself:

  • If you become incapacitated, who will have the legal authority to take care of you?

  • If a parent or other loved one becomes incapacitated, who will be able to assist them with managing their assets or healthcare?

  • If you die before your children reach adulthood, who will have custody over them or be able to take care of their inheritance until they come of age?

You may not know the answers to these questions, and that’s fine. That is probably why you are reading an article on an estate planning website. (Either that or you are very bored.)

Whenever we ask questions about capacity or managing someone’s financial or medical care, we enter the realm of guardianships and conservatorships. Two big legal words with two big legal explanations. So, let’s dive in and learn more about these concepts.

What is a Guardianship?

A guardianship is a court-supervised process whereby the judge appoints a guardian to manage the personal care of a ward (i.e. someone who is physically or legally unable to manage their medical care). Similarly, a conservatorship is a court-supervised process whereby the judge appoints a conservator (similar to a guardian) to manage the assets of a ward (i.e. someone who is physically or legally unable to manage their assets).

7 Mistakes to Avoid When Naming Beneficiaries

7 Mistakes to Avoid When Naming Beneficiaries

“Probate” is a dirty word to most people.

Sure, sometimes it can be helpful. But you generally want to avoid it.

Think of it like the raw broccoli that for some reason is included on every party platter everywhere, but without the dip. No dip, just raw broccoli. Avoid. It.

One of the ways to avoid probate is by naming beneficiaries on your financial accounts and contractual policies.

In estate planning, a beneficiary is a person or entity who receives part of your estate after your death. You can name a beneficiary through your estate planning documents OR through a contract such as a life insurance policy, IRA, or agreement with your bank.

If you designate a beneficiary on an account or policy, then the assets or proceeds of that account or policy will pass directly to the named beneficiary, probate-free, after your death.

Sounds cool, right?

Right. It is very cool.

However, sometimes beneficiary designations can have unintended (and undesirable) consequences. Here are some mistakes to avoid when naming beneficiaries:

1. Not naming a beneficiary

This one seems obvious, but it’s worth mentioning because it is so easy to avoid.

If you do not name a beneficiary (or take other steps to avoid probate), you are virtually ensuring that your estate will be probated. And although probate is not the worst thing in the world, it is costly and time consuming. It is also usually avoidable.

Even if you believe all your accounts and policies have named beneficiaries, double check. Triple check. Check once a year. Do everything you can to make sure you don’t make the silly mistake of forgetting to name a beneficiary.

However, designating beneficiaries is not always as easy as it sounds…

Estate Planning for Young Professionals

Estate Planning for Young Professionals

If you are a young professional, estate planning is probably not even on your radar.

And why on earth should you have to think about it?

You’re young.

You don’t have many assets.

You’re single (and your grandma keeps reminding you about it).

Your family knows what you want.

You have other things to worry about.

You’re going to live forever.

However, estate planning is just as important (if not more important) for single young professionals as for older, wealthier, married-ier individuals.

But how do you create an estate plan? Where should you start? It’s a big question. Lucky for you, we have already done the heavy lifting. Here are 4 quick estate planning tips for young professionals:

1. Get a Durable Power of Attorney

In short, a Durable Power of Attorney is an estate planning document that gives someone (your “Attorney-in-Fact”) the ability to act for you in certain financial and/or medical situations.

“Why is this useful?” you may be yell-asking at your computer screen. And that’s a great question.

How much can you save for retirement in 2019?

How much can you save for retirement in 2019?

You remember that part of How The Grinch Stole Christmas (the Jim Carrey version, of course, because it’s the best one) where — spoiler alert — the Grinch realizes the true meaning of Christmas and his heart grows three sizes?

That basically happened in real life a few months ago, except instead of the Grinch it’s the IRS and instead of “Christmas” it’s “retirement savings.” (The heart-growing thing doesn’t really enter into it. Also Christmas was over a month ago. This was a bad analogy.)

Starting in the 2019 tax year (for filing in 2020), you can contribute even more money toward retirement accounts such as an IRA or 401(k). It’s a Christmas miracle!

Changes to IRA and 401(k) Contribution Limits

Below is a brief summary of the new inflation-adjusted numbers for retirement account contributions; see IRS Notice 2018-83 for more technical guidance.

401(k)s. In 2019, the annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan, is $19,000. That is up from $18,500 in 2018.

11 Estate Planning New Year's Resolutions

11 Estate Planning New Year's Resolutions

There’s nothing quite like the new year to make you think of fresh possibilities and new beginnings.

There’s also nothing quite like way too much turkey, wine, and football over the holidays to make you realize that you should maybe consider some lifestyle changes.

You have probably already started on your list of new year’s resolutions for 2019: read more, get a gym membership (and actually use it this time), spend more time with family, etc. And those are great resolutions. “New year, new me” and all that jazz.

But there is one more goal you should add to your list: organize your estate plan.

While most resolutions are about helping your self, an estate plan is about helping your loved ones. To make it easier for you to set your affairs in order, we created this handy list of 11 Estate Planning Resolutions for 2019:

1. Execute a Trust and/or a Will

You, like a majority of Americans, may not have a living trust or a last will and testament. You may not even know what those documents are. Which one is better? Which one is right for you? What are the differences between a will and a trust?

Both a trust and a will control what happens to your estate — your property, your “stuff” — after your death. However, there is one huge difference between the two: a trust avoids probate, while a will does not.

Yes, even if you have a will, your estate must still go through probate after your death.

Remember that there are two main sides to estate planning: (1) What happens to your “stuff” when you die and (2) who takes care of your self when you become incapacitated. You can solve the first part of that equation in 2019 by creating a trust or a will.