Even just a few years ago, estate planning was a matter handled in the brick and mortar world for our assets, which existed in the brick and mortar world. However, so many of us now have assets that exist out there in cyber space like online businesses, bank accounts, stock accounts, etc.
Without the knowledge that these things exist and the passwords to access them, they will be lost to our heirs unless we include them in our estate plan and give the information for accessing them to our executors. Our computers can also have more value than just the value of the machine if things are stored on it.
A professional journalist or photographer for example may have articles or pictures stored that can be sold. Nobody, however, will know how to access these things unless we leave instructions for finding them after our inevitable death.
Laws covering digital assets lag far behind and will continue to do so for years to come so the best thing we can do is take care of them with our estate planners, executors and in our wills.
First , create separate email accounts for your online business and your personal business and make sure that your executor has the passwords to access your business email account. If you have sensitive personal information stored online, you can arrange for your executor to delete it upon your death.
Doing something as simple as writing down the information about your online business, bank accounts, stock accounts, etc. and including passwords, putting it into an envelope and marking it, “to be opened only after my death”, and giving it to your executor could solve the problem. Make provisions in your will to renew URL’s after your death. You wouldn’t want your heirs to lose myfamilybiz.com because nobody knew it was time to renew your subscription and, also, make provisions to pay your suppliers and/or employees for your online business.
Choosing the right estate planner is vital to this process . When you first meet with a potential estate planner, ask him what he thinks his job description is where you are concerned. If he says, “To save you as much in taxes as I can” keep looking. This isn’t the planner for you.
The Mayo clinic says that the real end-of-life questions are:§ What is the meaning of life?
§ Did I make a difference in the world? § What is my legacy to my family?
Tip: Avoid lawyers and estate planners who define estate planning as saving taxes. Look for a professional who is not only technically proficient, but who also understands the human nature of estate planning and will consider your life wishes before tax saving strategies.
The estate planner you choose needs to be able to focus on your goals. It is certainly the responsibility of an estate planner to discuss tax effects of decisions we make, but their first duty is to understand what our desires are and then guide us to the best decisions to achieve our goals with the tax repercussions a distant second. Taxes are too often the overriding factor in planning and we want planners who focus on our legacies.
Our estate plans are what will be left for our heirs…and our heirs are our families and friends. We want them to remember who we were and what we thought was most important… not by how much we paid or avoided in taxes.
Making a will is the first step in estate planning. Where do you start? You start by making a list of the people and organizations you want to remember in your Will. You, of course, want to provide for your dependents first but then you can get as creative as you wish.
You can give items that are meaningful to family members or friends, honor a colleague or arrange gifts to organizations or charities that you believe in. Prepare the list and include addresses, phone numbers and Social Security numbers if you have them. Be accurate. Clearly identify not only people but organizations.
Many organizations have similar names so contact the organizations or charities and get specific information about their identifying names and addresses.
You will need to choose an executor or executrix to settle your estate and carry out your wishes. Choose this person or persons with care. You might want to name a family member and a lawyer or a bank or trust company. The executor’s role is to file tax returns, invest assets, and setting values and selling property.
The job, also, includes submitting the Will for probate, safeguarding assets, paying your debts and distributing the remainder according to your wishes. The executor is entitled to a reasonable fee from your estate because the job is time consuming. Your executor should:
(1) Be Trustworthy
(2) Be willing and have the time (3) Be impartial to all beneficiaries (4) Have some business sense
(5) Have some knowledge of estate law (6) Be younger than you
You should name an alternate executor in case the person you name dies before you and you should ask the person if they are willing and able to accept the responsibility.
Now that your decisions are made, the final step is to make an appointment with an attorney and have him write your Will according to your wishes. If you haven’t written your Will, do so today.
Estate planners who charge little or nothing for their services should be avoided. It is most likely that they are making money for themselves by earning commissions on the investment products they recommend.
The estate planner you choose should be objective and offer more than just investment strategies and financial planning advice. You should ask questions before choosing your estate planner and the answers should plain to you…no beating around the proverbial bush.
Ask if he or she has worked with clients like yourself. i.e. If you are a teacher, has he/she worked with teachers? Has he/she worked with people who have your income level? Has he/she worked with people who share your goals? You are looking for an estate planner who has the experience you need to tap into.
Ask if he or she keeps up with relevant legislation, such as income tax laws, family law, and changes in probate regulations. These things change and the changes will affect the best course you should pursue over time. Ask how he or she sets fees and earns income. Does he/she sell life insurance, mutual funds or other investment products? If this estate planner does, keep looking. You want objectivity.
Tell him or her that you want to set time lines and ask how he/she can help you meet those deadlines.Ask if he or she can refer you to other professionals if the need arises… lawyers and accountants for example. Your estate plan is based upon many things that your attorney or your accountant handles for you. The estate planner needs to be able to work with and consider information provided by these other professionals so that your estate plan is based on your needs and goals and changed as your situation changes.
Choose carefully and wisely.