Category Archives: Estate Law
You may have an estate plan in place but have you considered estate planning for digital assets you own? Our estate plans need to keep pace and reflect our ever changing digital world. The digital age has ushered in an online and paperless society. With much of our life dedicated to the internet, we all find ourselves with multiple online accounts. Online accounts are amorphous, they include, but are not limited to, online brokerage accounts, retirement accounts, credit cards, stocks, student-loan or utility statements, social media accounts, blogs, and email addresses.
These accounts are our property, they are part of our estate. Consequently, when family members and individuals die, they leave tangible property and, now, digital property.
Recently, a common question has been – how does an executor sort through the decedent’s digital accounts and possessions? Often, the executor does not even know that these digital accounts exist, let alone have any clue as to how to access them. Individuals simply keep these accounts and their passwords to themselves and fail to share even minimal information with their executor. This secrecy only adds to the headache and heartache of administering a loved one’s estate.
The solution: estate planning for your digital assets. As with all estate planning issues, proper and prudent planning is the solution. There are simple steps that all individuals can take to properly plan for our digital world.
Steps to Estate Planning for Digital Assets
Estate Planning for Digital Assets Step 1: You must have an Estate Plan.
In order to protect your digital assets, you should have a will, trust, and power of attorney. These estate planning devices enable you to appoint a fiduciary (an executor or trustee or agent).
Estate Planning for Digital Assets Step 2: Incorporate a Digital Asset Clause or Provision
A “Digital Asset” clause or provision will authorize your fiduciary to access and manage your digital assets and accounts. For instance, such a clause will empower a fiduciary to access your online bank accounts to make payments or close an account in the event of incapacity or death. This clause can also be tailored to a client’s wishes. For instance, if a client does not want to allow their fiduciary to have specific authority over certain digital assets, the will or trust agreement can be altered in accordance with the client’s wishes.
Estate Planning for Digital Assets Step 3: Organize a List of Your Digital Assets
After properly updating or creating a new estate plan to reflect your digital assets, you need to, at a minimum, to identify what your accounts are and where they can be accessed. Additionally, if you feel comfortable, you should (safely) leave the passwords to the accounts with your fiduciary. Your executor should have one document with a list of your assets and passwords.
What you can do? Contact the estate planning attorneys at Puff & Cockerill to help implement a proper and adequate estate plan that covers and protects your digital assets. Your estate plans should reflect our ever-changing world. Online accounts are becoming the norm and technology will continue to expand in our lifetimes. When it comes to planning your estate, there is no better time than now.
Let’s look at some Rules for Estate Planning. If Estate Planning 101 were a high school or college course, the first day of class would address three questions: (1) What is Estate Planning; (2) Why do we Plan our Estates; and (3) How do we Plan? The answers to these fundamental questions are simple:
Rules for Estate Planning #1 – Understand Estate Planning
Estate Planning is a term of art: it is an all-inclusive word encompassing a multitude of important issues. Quite often, people do not understand the broad scope of estate planning. Commonly (and wrongly), people believe estate planning is simply creating a Last Will and Testament that will dispose of their property at death. While true, this short-sighted belief misses the remaining aspects of estate planning.
Estate planning, at its core, includes planning for both you and your loved ones. Estate planning includes assessing your assets, protecting those assets while you are alive and after your death, and formulating a distribution plan in accordance with your values and beliefs. In doing so, the legal tools available includes creating a Will and Trust, or multiple Trusts, to plan, protect and carry-out your personal goals and objectives.
For yourself (and we should never forget to plan for ourselves), estate planning includes planning for later in your life. Follow these Rules for Estate Planning and establish: (a) long-term care planning, (b) health care planning, (c) establishing Powers of Attorneys, (d) a living will, and (e) a medical directive to ensure that your wishes are adhered to and that you are properly cared for in the event you are incapable or incapacitated.
Rules for Estate Planning #2 – Understand Why You Need It
While everyone has tangential personal reasons for estate planning, the nucleus of estate planning is this – we plan our estate’s to pass on our hard earned assets to our loved ones to improve their lives and leave a lasting legacy. Based on this foundation, people plan in accordance with their beliefs, such as providing for certain individuals, charities, religious or educational institutions.
What estate planning provides is protection, which, provides peace of mind. A plan ensures our wishes are carried out without concern that they will be subverted by the whimsical decisions of others. Estate planning allows us to look into the future and contemplate issues, ahead of time, so in the event they come true, we (and our loved ones) are prepared and ready. The beauty of planning for yourself later in life is two-fold: first, you will have the peace of mind in knowing that your wishes and plans will be put into place; and secondly, your family will have the peace of mind in knowing that your plan was well-thought-out and the decisions are in your best wishes.
Rules for Estate Planning #3 – Understand How to Do It
We plan by being proactive. An often quoted adage by Benjamin Franklin – “a stitch in time, saves nine” – speaks directly to estate planning. The time to begin estate planning is now. Regardless of your position in life: old or young, married or divorced, rich or poor, there are numerous reason why you should plan your estate. There is never a wrong time to formulate your estate plan. If there ever were a wrong time to plan your estate, it’s when you’re “too late.”
Speak to an Estate Planning Attorney to begin the process of estate planning. We all deserve the peace of mind of knowing that our goals, objectives and wishes will be adhered. The estate planning attorneys at Puff & Cockerill can provide guidance and direction for all aspects of your estate planning.
Estate planning is not a one-time – one-size-fits all endeavor. As our lives change, our estate plan should correspondingly reflect the changes in our life. Accordingly, if you already have an estate plan, we urge you to stay proactive by checking your estate planning documents. If your documents (such as a Will or Trust) need amending or updating, please feel free to contact the estate planning attorneys at Puff & Cockerill.
Who is Eligible for a Special Needs Trust?
Commonly, a Special Needs Trust is a trust established by parents or loved-ones who have children who are covered under a disability and are receiving state or federal government benefits. The trust is specifically tailored to permit the parents to furnish some economic benefits to their children without disqualifying them from public assistance. Less frequently, but also applicable, a special needs trust may be used to provide for elderly persons who are disabled, such as a parent. For elderly persons, however, transfers of funds or assets into the trust cannot be made once the beneficiary reaches the age of 65.
Purpose of Special Needs Trust
A special needs trust, also known as a supplemental needs trust, is a trust intended to allow a disabled individual to maintain eligibility for certain needs-based government benefits. Since government benefit programs are only intended to provide basic needs and critical items, i.e., food, shelter, clothing and medical care, a special needs trust provides supplemental items to improve the beneficiary’s quality of life. The supplemental or non-necessary items a special needs trust may provide include, birthday and holiday gifts, electronics, such as a computer, laptop or television, educational expenses or a vacation. Assets placed in a special needs trust are made available to provide for the disabled beneficiary’s special needs and to supplement, not supplant, public benefits. The availability of these supplemental assets can greatly impact and improve the disabled beneficiary’s quality of life.Government benefits programs provide basic necessities for disabled persons, however, these programs, such as Medicaid and Supplemental Security Income (“SSI”), are means-base tests and enforce financial limitations on personal eligibility. For instance, a person can only qualify for SSI’s assistance program if they have resources of less than $2,000 in their own name. Some assets are retainable that are not included in the $2,000 limit, such as, your car and life insurance policies with a face value of less than $1,500. A special needs trust, therefore, enables a disabled person to have assets and funds in trust for his benefit, which do not count towards SSI’s $2,000 cap.
Requirements of a Special Needs Trust
A properly drafted special needs trust must satisfy specific requirements imposed by federal and state law in order to exclude the contents of the trust from the beneficiary’s personal income calculation. The most important requirement, recognized at both the federal and state level, is that the state must receive all amounts remaining in the trust upon the death of the trust beneficiary up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan. Additionally, the trust must specifically state that the trust is for the sole benefit of the beneficiary, must be irrevocable, and must state with specificity, that the trust’s purpose is to permit the use of trust assets to supplement, not supplant, impair or diminish, any benefits or assistance of any Federal, State or other governmental entity for which the beneficiary may otherwise be eligible or which the beneficiary may be receiving. These provisions are codified at the Federal level in 42 U.S.C. § 1396p(d)(4)(a) and at the State level in N.J.A.C. 10:71-4.11(g)(1). For more information regarding disability planning and special needs trusts, please feel free to contact an experienced trust attorney to help you and your family understand the benefits and details of a special needs trust or supplemental needs trust. An experienced attorney can help guide and explain the options that will effectuate your goals and objectives for disability planning.