Estate Planning

August 1, 2010

Is a Virtual Asset Instruction Letter Enough to Protect Digital Assets?

Everyday there is becoming an increasing need for Digital Asset protection as more and more digital assets are created. In Estate Planning and “Virtual Assets” – Part 1, a recent article written by Washington attorney Michael Walker, he discusses digital assets and recommends doing two things to protect your digital afterlife. First, he recommends integrating digital assets, or “virtual” assets, into your estate plan. By choosing a trustworthy representative for your estate, he suggests this will properly integrate the assets into the estate. Next, Walker proposes creating a virtual asset instruction letter (or VAIL) that will list all of your online accounts and assets. Included in this list will be the web addresses, user names, and passwords to give your designated representative access these accounts.

While it is important to include these assets in an estate plan, simply choosing a dependable and trustworthy representative may not be enough to secure your digital assets after you are gone. Even with a VAIL list, digital assets may be lost if the username/password is changed. Additionally, a VAIL does not resolve the problem that digital assets are expiring licenses. The best solution to this problem is to create a Digital Asset Protection Trust that will form the accounts in the name of a trust so that when you die, the entity that owns the license is still in existence. For more information on protecting Digital Assets, consult your Florida Digital Asset Trust Lawyer for guidance before your digital death day.

July 30, 2010

New Study: Asians Have Increased Estate Planning Awareness

by David M. Goldman

In a recent article published in the New York Times, Sonia Kolesnikov-Jessop writes that Asians are paying more attention to inheritance planning. With a vast number of first generation wealthy Asians getting older, many heirs find themselves in court fighting over their parents’ estates. In the article, a Singaporean businessman explained that death was never talked about for sensitive and superstitious reasons. The second generation, having already experienced the uncertainty of estate court battles, is much more willing to talk about estate planning with their beneficiaries.

Due to the strong family values in Asia, individuals are planning because they feel obligated to do so. According to a study, people between the ages of 30 and 40 with a net worth of at least $1 million are more likely to do estate planning than Westerners of the same group. However, a similar survey showed that only 10% of first generation Asians with a net worth of at least $1 million had thought about inheritance planning. The same study found that Americans are more motivated to plan due to the high estate taxes that face wealthy estates. China and other Asian countries do not have a tax similar to the U.S. estate tax.

Increasing awareness of the importance of estate planning is essential, not only for Asian countries, but also here in the Florida. With the potential for a federal estate tax level not seen in years, more Floridians than ever before could be subject to the estate tax. Planning your estate with a Florida Estate Planning Lawyer can potentially avoid probate court and taxes.

July 29, 2010

Second Life After Death

by David M. Goldman

While video games have become increasingly realistic over the last few years, they still cannot compete with the virtual world reality of computer based Internet services. To some, SecondLife.com may seem like a game, but to others it really is a “second life.” Second Life is a website that allows users to interact with each other by downloading a software program. Each user creates an avatar that can resemble himself, a celebrity, or anyone they can imagine. All users interact, socialize, and even conduct business with each other in the same world known as “the grid.”

One of the unique abilities built into the software is a modeling tool that allows the user to build virtual objects in the virtual world. The terms of service guarantee that the users will retain all copyrights to the substances they design and create. With their digital rights management, the virtual community of Second Life generated approximately $55 million of real money last year. By having such a unique way to create an asset, the user must choose a unique way to protect it for heirs.

I would suggest a Digital Asset Trust because Second Life will only transfer an account when there is a relevant legal documentation. By setting the account up in the name of a trust, licenses and use restrictions will no longer apply to transfer of property to another. If you would like assistance in protecting your Second Life account and property, contact a Florida Estate Planning Lawyer today.

July 24, 2010

Know Where to Store Estate Planning Documents

by David M. Goldman

Since Florida Estate Planning Documents distribute the wealth you have accumulated over your life and provide your wishes in the event you become incapacitated, estate planning documents are some of the most important documents you will ever sign. Knowing where to keep these documents is imperative to ensuring the original copies are never damaged, lost, or forgotten over the years.

A couple of recommendations on where to keep your estate planning documents are a safety deposit box or a home safe. A safety deposit box is probably the most secure place to keep any documents and you can rest assured that the documents are protected from theft, fire, damage, tampering or loss. Banks provide top of the line security for those who seek the ultimate safe location for their estate planning documents.

In addition, storing your estate planning documents in a home safe that is waterproof and fireproof is a good alternative to a safety deposit box. However, storing the documents at home may not provide the same level of security as a bank safety deposit box because safes are always prone to thievery in the event your home is broken into.

July 23, 2010

Small Businesses Are Set to Collide With Estate Taxes in 2011

by David M. Goldman

Recently, I have written several blogs concerning the possible federal estate tax increase from zero to 55% in 2011. If Congress’s left and right representatives cannot come to an agreement, the exemption will end at $1 million. This means that for every individual who passes away, up to $1 million in assets may pass to their heirs free from estate taxes. While having one million dollars is a significant amount of money, $1 million in assets is something considerably different. Numerous small and family owned businesses that fall into the class above the $1 million limit would be hit hard by the estate tax.

Over the past few years many businesses have been split up and sold to pay the estate taxes. Much of this could have been avoided with proper estate planning. If nothing changes many businesses that are family-owned will most likely have to sell off the business because of a 55% federal estate tax rate. Many states have additional estate taxes that will be due which could raise the total tax to around 70%. Luckily Florida residents will not be subject to additional state estate taxes. For instance, suppose a family owned business has a net worth of $10 million. When the current owner dies the $10 million net worth of the company will pass to the estate and be taxed at 55% + any state estate taxes that may be due. This means that the heirs will have to pay the millions of dollars out of their own pocket or sell off the company. The same rationale is true for farm and ranch owners as well. A one thousand acre farm that has been in a family for many years could be worth millions of dollars. When the current owner dies, the farm will be subject to the same 55% estate tax requiring the heirs to sell off the property to pay the taxes.

With serious tax consequences on the horizon, estate planning has never been more important. The showdown between Republicans and Democrats on Capitol Hill on estate taxation does not show strong signs of reconciliation. If you are a small business owner or farm owner who would like more information on protecting your company contact a Florida Estate Planning Lawyer today. An attorney can help you reach your goal of keeping the business in the family and reducing the taxes through estate planning techniques.

July 22, 2010

Avoid Being Exploited Financially in Florida

by David M. Goldman

As we age, it is very common to lose some of the wits you had when you were younger. Due to the growing number of senior citizens that are falling victim to financial abuse, careful estate planning is a necessity while you are still fully competent. Financial abuse of the elderly usually occurs in a time when the person’s mental capacity is diminishing. Also, it is common that the senior can’t say no to someone who repeatedly requests to be included in the estate.

In a recent article by Eileen Ambrose, she provides an in depth analysis of this blight in our country. Arguably the most shocking statistic related to financial abuse of the elderly is, in approximately one-third of all cases, a family member of the victim is the person who takes advantage of the senior. This is the reason that it is essential for aging adults to create a complete estate plan while they remain fully competent. Protecting your assets is a complicated matter that should be handled by a Florida Estate Planning Lawyer . In addition to seeing an attorney, the following list is advice Ambrose shares in her article:

1) Choose a trustworthy agent to represent you who manages his or her own finances properly and is not a spendthrift.

2) Maintain control of assets refrain from including a child’s name in your a bank account.

July 21, 2010

Faith Based Estate Planning

by David M. Goldman

Faith and religion often underlie many decisions an individual makes in regards to their Florida Estate Plan. This realization prompted David A. Straus to write a book entitled Faith-Based Estate Planning: Our Values and Valuables. Straus’ book attempts lead the reader through the estate planning process, at all times keeping in mind their personal beliefs. The book focuses on how Estate Planning is not always about tax and probate avoidance as it is used to fulfill the planner’s final wishes.

Taking information from trade journals, magazines, book, websites, surveys and newspapers, Straus’ main goal is to provide a wealth of knowledge about faith to support those final wishes as desired. Health care, burial and resuscitation beliefs all fundamental beliefs based on faith and religion. For example, most Jewish and Eastern Orthodox practitioners believe it is a desecration of the body to be cremated or embalmed after death. These beliefs should be addressed in the estate plan so that everything goes according to your wishes.

Each religion addressed in Straus’ book is detailed with a geographical concentration, history, the number of practitioners, and integration of estate planning subject ideas. Furthermore, the book’s emphasis is on death rituals, philosophy of life, position in the afterlife and their effect on each religion’s perspective on investments and estate planning.

July 19, 2010

Contesting a Will in Florida

by David M. Goldman

Florida Will Contests:

Occasionally a family member or friend passes away with a Florida Will that gives less than expected to an heir of the decedent. This situation usually gives rise to an inquiry about a will contest. A will contest happens when the disgruntled heir challenges the will by suing the estate under some legal theory claiming the will is invalid. Will contests commonly happen when the testator attempts to leave a small amount to an estranged child or a large amount to someone who would not be expected to inherit under a Florida Will.

To guard against the potential of challenges to the will, you may see a No-Contest clause added by the testator. A no-contest clause is a provision of a will that penalizes the beneficiary who challenges the will, or the contestant. While these clauses may be valid in other states, Florida law specifically makes them unenforceable. According to the Florida Probate Code, “a provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable.” Furthermore, the Florida Trust Code, as amended in 2007, addresses no-contest provisions by making them unenforceable in any trust instrument. This does not mean that they should not be considered as they may be enforceable if one changes which laws the documents will be interpreted under.

July 16, 2010

Update Intellectual Property in Estate Planning

by David M. Goldman

In today’s society, intellectual property rights are rapidly increasing for those individuals that are business savvy and artistically or scientifically talented. Intellectual property rights (aka intangible assets) include patents, copyrights, trademarks, and publicity rights. In most instances, intangible assets are obtained as a direct result of someone’s job, profession, or trade. With the vast expansion of the Internet, many new intangible assets have been acquired in the last 10 – 15 years. Therefore, the issues involved with these assets are continually evolving and the governing law is struggling to keep up.

The rules governing these intangible assets and the way they are treated when passed through an estate is anything but clear. There are a few key issues that should be addressed when intellectual property is incorporated into an estate. First, valuing the asset always poses a challenge, especially when the formula involves reducing the future earnings to present value. How to address current and future income from the asset is another key issue. Next, some intangible assets have a specific life for which the owner has exclusive rights. According to federal law, copyrights last for the life of the author plus 70 years. On the other hand, patent rights are divided into two categories with design patents receiving 14 years and utility patents receiving 20 years.

Furthermore, intellectual property creates a unique concern with the return of the Federal Estate Tax in 2011 and the looming effect on everyone with a slightly more than modest estate. For example, the executor of a best-selling author’s estate may be forced to sell the future publication rights of a book in order to cover estate taxes. The author may be uncomfortable with the thought that his unfinished work could be published once he is gone. Enhancing your estate with a life insurance trust can guard against these estate tax concerns.

July 15, 2010

Tips for Selecting a Guardian for Your Minor Child

by David M. Goldman

After having a child, one of the first decisions parents should make is deciding who the guardian of the child will be in the event both parents pass away. While many parents may talk about who they wish to take care of their child in the event of their deaths, it is important to include this decision in your estate plan to ensure the individual left with this responsibility is in fact the person the parents chose. Here are a few helpful hints when the time comes to make a guardian decision.

1) Will this person be a responsible guardian? Does the individual have the parenting skills necessary to care for your child and look after them properly?

2) Where does the potential guardian live? If you do not want your child to be uprooted from his home, you should pick someone who lives near you.

3) Is the potential guardian too old or too young to care for your child? The person selected should be physically able to care for the child. They should also be in touch with the latest issues children deal with at school and at home.