What Happens to Your Digital Assets After You’re Gone?

One of the major hurdles of estate planning is that many people do not realize how many assets they actually have. In the digital age, everyone has digital assets that also should be discussed when drafting a will. Do you want your social media to continue after you have passed? Is there information in your email that you don’t want family members to know?

What’s going to happen to your Facebook account when you die? Or all the songs you’ve downloaded from iTunes? 

As digital assets become more common for all of us, it’s important to incorporate them into estate plans. Unfortunately, as was recently explored in a Denver Business Journal article featuring WealthCounsel, that’s not always easy to do. 

According to a 2013 McAfee study, the average person has roughly $35,000 worth of assets stored on digital devices. That value includes purchased movies, books, music and games as well as personal memories, communications, personal records, hobbies and career information. Of those surveyed by the study, 55 percent said they store assets that would be impossible to recreate, re-download or repurchase.

Unfortunately, those assets are increasingly at risk of being lost when the account owner dies. Many digital accounts are subject to complicated terms of service agreements, which can often make it difficult or impossible for surviving loved ones to access them. Additionally, state and federal laws could put friends and relatives who try to log on to your accounts at risk of violating anti-hacking and privacy statutes.

Initiatives are under way to put more consumer-friendly laws in place regarding digital assets. Until then, though, it’s important to incorporate detailed directions and information surrounding your digital assets into your estate plan. Here are four steps to take now: 

Check out the steps at: http://bit.ly/1KBRehk

There’s An App for That!

This expression is becoming redundant. There is an app for absolutely everything it seems. There are some that are rooted in frivolity and fascination with the fact that we can make apps but there are others that actually prove incredibly useful. There are some financial apps that are coming into circulation that can help you with everything from creating expense reports to managing your personal expenses and everything in between.

This popular app collects all of your financial information and puts it in one, easy-to-view place. “It’s reliable and it works quickly,” says Andrew Schrage, co-owner of Money Crashers Personal Finance. “It categorizes all my transactions automatically, lets me know when I’ve overspent in a certain budget category and gives me real-time updates on available cash and credit card debt.”
Created to provide “expense reports that don’t suck,” according to the Expensify website, the Expensify app is geared toward business travelers looking to keep track of mileage, receipts and other expenses on the go. The app organizes expenses into categories set by the user, syncs credit and debit cards and generates eReciepts for purchases under $75.
Many banks have their own mobile apps, Schrage says, and they make a handy tool for consumers. These apps often include ways to transfer money between accounts, pay bills and deposit checks on the go. “You can research your account history . and most [bank apps] are free,” he adds. Some also include branch and ATM locators for times when mobile functions aren’t enough.
Made for mobile couponers, this app includes a daily updated coupon database and a widget to deliver daily deals directly to your phone. It also provides a barcode scanner to compare prices and allows users to simply show the coupon on their phone at the register. And for social savers, there’s a share option to text and email coupons to friends.
To see the other five apps click: 


How to do Disinheritance Right

Disinheritance is a bit of an ugly subject for some. When planning your estate, it is important to remember that this is YOUR will and these are things that YOU have worked hard for. The point of a will or planning what to do with your estate is to make sure that it is divided the way that YOU see fit. If you do have to disinherit someone, here is how to do disinheritance right.


Fashion designer Oscar de la Renta died last year at age 82. He left one son, Moises de la Renta. He also left behind his second wife, Annette, and her three children

from a prior marriage.

One might expect Oscar to leave a substantial sum to his only son, Moises. However, Oscar chose to leave most of his $26 million estate to his second wife, Annette. Moises is one of the beneficiaries of a trust with less than 1/4 of his estate. The other beneficiaries of that trust are Annette and her three children. There is a “no contest” or “in terrorem” clause which completely disinherits Moises if he contests Ocsar’s will.

Oscar and Moises had a falling out a decade ago when Moises attempted to start his own fashion line. Oscar’s estate plan demonstrates the best way to disinherit someone.

First, you would include a “no contest” or “in terrorem” clause. Such a clause provides that, in the event of an unsuccessful legal challenge by that person, they receive nothing. (Note, such a clause is not valid in some states.) Some practitioners and clients simply choose this route. However, then there is no disincentive for a challenge to the plan. If the heir challenges unsuccessfully, they receive nothing. However, if they do not challenge, they also receive nothing. The second element of a successful disinheritance is a minor, but substantial inheritance. That way, if the heir challenges, they have something to lose.

In this case, if Moises challenges, he would no longer be a beneficiary regarding the trust with Vs of the estate. While being one of several beneficiaries of a trust with only 1/4 of the estate is far less than what his intestate share would be, he would have to think twice before risking that by challenging the plan.

Stephen C. Hartnett, J.D., LL.M.

Associate Director of Education
American Academy of Estate Planning Attorneys, Inc. 9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128


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IRA’s Now Vulnerable to Creditors

Estate planning is something that everyone should be doing, not just for yourself but for your loved ones. IRA’s have been a huge part of what many people leave for loved ones. Due to a recent Supreme Court ruling, they are now not protected from creditors, becoming a new consideration when planning your estate.
In a major decision, the Supreme Court ruled this past June that inherited IRAs are not considered protected retirement funds-and are thus subject to creditors’ claims if the beneficiary files for bankruptcy.
In the case of Clark v. Rameker, Heidi Heffron-Clark argued that a $300,000 IRA she inherited from her mother in 2001 qualified as a protected retirement account. As such, she contended, the account was exempt from the claims of creditors after Heffron-Clark and her husband filed for bankruptcy in 2010.
However, under U.S. tax code regarding inherited IRAs, Heffron-Clark was required to withdraw a minimum amount of money from the account each year, even though she is not yet retirement age. Given this, the court decided the account was not a protected retirement fund because the beneficiary wasn’t using it as one.
Why does that matter?
The Clark v. Rameker decision means that, in the case of bankrupt estates, inherited IRAs will now be considered assets-fully available to satisfy creditors’ claims. If you pass a retirement fund down to a child or grandchild, that inherited money will no longer be protected if your beneficiary must file for bankruptcy.
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