More Digital Estate Planning Issues

A year ago, I wrote an article entitled "I have to Estate Plan my Gmail™ Account?" In the piece, I described the importance of ensuring that a person took the appropriate steps to plan their digital¹ estate. A year later, the issue has only magnified for many people as new technology advances further intertwine with our lives, affirming the need to plan a person's digital assets.

Planning and safeguarding access to a person's email, blog and twitter account can be important for financial reasons. Losing access to non-financial digital assets, like pictures loaded into the "cloud", could have a similar impact. Some of those lost areas are sentimental, but, other times; it could mean a loss of property.

When I was growing up, people took a photograph with a camera that would produce the picture on film. The film would then be developed at a store and the person would stick the picture in book, frame, file or drawer. My mom still has my baby book with all the pictures of my first year.

What is the standard now? A person takes a picture with their camera/cell phone and then has a myriad of options. A person could download their pictures to their hard drive and then upload them to various photo sharing cites like flickr™, photobucket™, and shutterfly™. Another person will post the picture on Facebook™ or other social media cites. Most will never create a physical form of the picture on which a person can put their hands.

So the issue becomes: what happens to that photo sharing account when the account holder dies. For example, flickr™ is owned by Yahoo™, and, from past experiences Yahoo™ takes a hard line on giving access to another person's digital account. Yahoo™ will also terminate the account erasing all the information when notified of the account holder's death. So a loved one has to deal with not only the decedent's death but also with the loss of the pictures and memories of that loved one with the simple press of a key. That can be devastating for anyone and everyone should take steps to minimize such an outcome. Accessing that site is essential in safeguarding those pictures.

Loss of access to a decedent's digital estate could also impact property and inheritance. The iPad™ was not even sold a year ago. Now, it has transformed the personal computer marketplace. The heart of the iPad™ success is the use of "apps" that can provide productivity improvement for work, playing games, listening to music etc. Some apps or music can cost as little as 99 cents while some apps are $30 or more.

The iPad™, along with a person's iPod™ and other digital media devices, could have hundreds, if not thousands, of dollars of property tied up in user's account. I know friends that had purchased 100s of CD's in their lifetime, downloaded the songs, and have tossed the CDs away. Access is only granted through a username/password system, and many providers work in the same way, meaning the loss of value to the decedent's estate but also memories.

Now, people are becoming more aware of their digital estate creating clauses in their will directing the personal representative to distribute their digital estate assets. In the past, people used to bequeath valuable record collections, and the personal representative only needed to pick up the albums and hand them to the heir. Digital music works much differently. Hopefully, a person that inserts a digital asset clause in their will takes the time to make it easy for the personal representative to distribute those assets. But there is no guarantee.

The situation could also become more complicated if there is a valuable digital asset, the decedent died intestate the heirs are aware of those assets, and the heirs attempt to gain access to those assets. The personal representative would need to jump through some serious hoops to deliver the digital assets to the heirs.

But, I do have some good news. Over the last year, forces have been at work to assist the public protect digital assets. In addition to Legacy Locker, I have come across several other companies offering services that protect a person's digital estate including: Entrust, Vitallock and Deathswitch. I can't vouch for any of the services these companies offer. I just mention their existence.

Even better news is that some states have started to recognize the need to plan a person's digital estate. For example, on November 1, 2010, estate executors or administrators in Oklahoma will have the power to access, administer or terminate the online social media accounts of the deceased, according to a new state law. No cases have been brought to determine how the state law works within the confines of a provider's service agreement, but it is a start.

As our lives become more dependent on technology and the web, making sure a person takes the necessary steps to protect their digital estate can mean the difference between being able to see that last picture of a loved one and having it deleted out of existence.

Basics of Estate Planning: Guardianships for Minors

Many of my estate planning clients are young families that want to put in place the legal processes to protect their children. One easy and efficient way without drafting an entire estate plan is to draft and execute a guardianship for minor children, nominating a guardian. This legal document will name someone you feel should be appointed guardian for your minor children. Like all legal issues, there are some pitfalls and traps of which to be aware.

The need for appointing a guardian comes up in several instances but primarily occurs when a parent is unable to look after a minor child or dies. A minor child is one that is under the age of eighteen. The court deems that a minor child is incapable of making decisions.

If only one parent dies or become incapacitated, then the surviving parent is almost always appointed guardian, but for some extraneous issue. If a minor child's parents have died, or are incapable of serving, then the court will decide who should be the guardian. The court will use a "best interests" standard, i.e., what is in the child's best interest.

A number of factors are used to determine the best interests of a child. While every state differs, the guardianship "best interest" standard is generally similar to parent custody standards and includes:

1. The age and physical and mental condition of the child and the child's developmental needs;
2. The age and physical and mental condition of the guardian;
3. The relationship between the guardian and the child, the guardian's positive involvement and ability to assess and meet the child's needs;
4. The child's needs, including important relationships such as with brothers and sisters, grandparents, and other relatives;
5. The role which the guardian has played and will play in the upbringing and care of the child;
6. Guardian's willingness to support the child's relationship with the other relatives, their willingness and ability to maintain a close relationship with the child, and their ability to cooperate in matters affecting the child;
7. The child's preference;
8. Any history of abuse; and
9. Any other factors the judge feels necessary to consider.

Another issue to be addressed is whether to divide guardianship responsibilities by naming a guardian of the person and a guardian of the property. The guardian-person would take care of the everyday caregiving of the minor child, e.g., shelter, healthcare, taking the minor child to school, etc. The guardian-property would be in charge of all the financial issues that occur, e.g., paying the bills, investing for college, etc. Most people know a person who is great with children but who is wanton with money and another person who is great with money but who is very cold toward children. While finding one person to handle all the duties is ideal, splitting out the duties of guardianship could be the best way to look out for a minor child's interest.

If you have minor children, it is always best to have an estate plan. But, at a minimum, parents should have a guardianship document in place to protect their children and ensure their wishes are taken under advisement by the courts.

Estate of the Month: I'm Spartacus but Evidently not a Dad

Bernard Schwartz died on September 29, 2010. Who is that you ask? Maybe you know him from his stage name, Tony Curtis. He had the versatility to star in comedic roles such as the cross-dressing Joe/Josephine in Billy Wilder's "Some Like It Hot" and dramatic roles such as the slave Antoninus in Stanley Kubrick's "Spartacus." Off screen, he was famous for being married five times and being considered not much of a father to his five children, including actress Jamie Lee Curtis. What makes his estate interesting, however, is that his will proves that he was not much of a father.

Approximately five months prior to his death, he altered his will to state "I acknowledge the existence of my children…and have intentionally and with full knowledge chosen not to provide for them." In short, all of his estate will go to his fifth wife, Jill Vandenburg Curtis, and his children will get nothing.

Legally, there is nothing wrong with this action. While many states ensure that a surviving spouse will not be disinherited, most states are perfectly willing to let a decedent cut off the decedent's children. Disinherited surviving spouses may become a burden to the state and be driven into poverty by being disinherited. A minor child should be looked after by the surviving spouse and an adult child should be able to survive on their own.

However, what is somewhat surprising is the public nature of the rebuke. Wills must be filed with the probate courts and are free to be reviewed by the general public. If he did not want to pass on anything to his children, he could have easily drafted a trust and kept the terms quiet. Curtis could have disinherited his children and left his entire estate to his wife. He could have done it privately without his family being exposed to the public's prying eyes. Instead, he "announced" to the world he did not think very much about his children.

If Curtis had made a trust, then his "pour-over" will would simply direct that his entire estate be distributed to the trust. The trust document would have remained private, and he could direct that everything be distributed to his wife and no one in the general public would have been the wiser.

However, given the public nature of Curtis's life and the likely public interest in his will, it appears that the "aloofness" Curtis showed toward his children during his life passes with him into the grave.

On a talk show, Jamie Lee Curtis was once asked how she viewed her father. She replied that she was "like all of you [the audience], a fan of him" and not much of a father. Unfortunately, his will affirms her belief.

¹ In the March issue of The Future Estate, I used the term "virtual estate plan," but, since publishing that article, the industry standard has been to use the term "digital estate" to describe a person's email account and the like.

² This document entitled "Declaration of Standby Guardianship for Minor Child" was drafted to work under Virginia code. Other states might require different language or requirements. Check with an attorney licensed in your state to ensure validity.