Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

A Member of the Law Professor Blogs Network

Wednesday, July 30, 2014

The Tweets Live On

Mr. LaptopAs I have previously discussed, many private companies are developing ways for their clients and account members to plan for how their online accounts and digital assets will be handeled after they die. Now, Twitter has put their hat in the ring, and with a twist. Soon, Twitter users that just can’t live without tweeting may not have to stop just because their dead. The LivesOn app is currently in beta testing, but may be able to provide a way for the tweets to live on.

See Connie Rock, I’ll Tweet When I’m Dead: Estate Planning in the Digital Age, Flip the Media, July 28, 2014.

July 30, 2014 in Death Event Planning, Estate Planning - Generally, Humor, Web/Tech | Permalink | Comments (0) | TrackBack (0)

There May be a New Player in the Digital Currency Game

BitcoinAs I have previously discussed, there are many digital currencies on the market, and the IRS issued a notice in March on how they will be taxed. A new digital currency may be hitting the market soon. There is currently a plan to develop the Peso Digital of Mexico. The Peso Digital would modeled off of bitcoin. The Chief Executive of Peso Digital, Luis Daniel Beltrán, believes that is more countries create their own bitcoin like digital currency it will create a transparent system that is more trusted.

See Victoria Wagner Ross, Will the Peso Become a Digital Currency?, Examiner, July 27, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 30, 2014 in Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 29, 2014

Funding GRATs With Bitcoins

BitcoinAs I have previously discussed, the IRS issued a notice in March that announced that for tax purposes bitcoins and other virtual currency will be treated as property. This notice created more certainty for using bitcoins for financial planning purposes, but many details are still unclear. Since bitcoin value can increase greatly and rapidly, some grantors wish to fund grantor retained annuity trusts (GRATs) with bitcoins. However, this same value fluctuation that can result in spikes in value, also makes funding trusts with bitcoins risky. Bitcoins are also an attractive funding source because administration of bitcoin GRATs are relatively low maintenance since transfers are simple and inexpensive.

See Ivan Taback & Nathaniel Birdsall, The Bitcoin GRAT, Wealth Management, July 2, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

July 29, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, July 24, 2014

A Proposal for the Future of Digital Estate Planning


Last week, the Uniform Law Commission drafted the Uniform Fiduciary Access to Digital Assets Act, which is a model law that would let relatives access the social media accounts of the deceased.  Because so many of us live more of our lives online, more of what used to be tangible turns digital.  “Where you used to have a shoebox full of family photos, now those photos are often posted to a website.”

The goal of the Uniform Fiduciary Access to Digital Assets aims to make the digital shoebox equally accessible to family members.  “This is the concept of ‘media neutrality’ . . . . The law gives the executor of your estate access to digital assets in the same way he had access to your tangible assets in the old world.  It doesn’t matter if they’re on paper or on a website.” 

The ULC’s proposed law would override terms-of-service agreements that specify the user alone can only access his or her account. 

Yet companies such as Facebook see a downside to the proposed law.  “The bill takes no account of minimizing intrusions into the privacy of third parties who communicated with the deceased . . . This would include highly confidential communications from third parties who are still alive---doctors, psychiatrists, and clergy.”

See Molly Roberts, A Plan To Untangle Our Digital Lives After We’re Gone, All Tech Considered, July 23, 2014. 

July 24, 2014 in Estate Administration, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, July 17, 2014

Digital Estate Planning

ComputerMany people fail to consider what will come of your online accounts when you die.  While grieving relatives might want access for sentimental reasons or to settle financial issues, you may not want a spouse going through every single e-mail. 

The Uniform Law Commission was on track Wednesday to endorse a plan that would give loved ones access to, but not control over, the deceased’s digital accounts, unless otherwise specified in a will.  If the legislation is adopted by the legislature, a person’s online life could become as much a part of the estate plan as deciding what to do with physical possessions. 

Privacy advocates are skeptical of the proposal.  “The digital world is a different world from offline.  No one would keep 10 years of every communication they ever had with dozens or even hundreds of people under their bed.”

While some tech providers have come up with their own solutions, the Uniform Law Commission’s proposed law would trump access rules outlined by a company’s terms of service agreement, although the representative would still have to abide by other rules including copyright laws. 

See Anne Flaherty, What Happens to Your Online Accounts When You Die? Associated Press, July 16, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

July 17, 2014 in Estate Administration, Estate Planning - Generally, Technology, Web/Tech, Wills | Permalink | Comments (0) | TrackBack (0)

Saturday, July 12, 2014

The Issues Surrounding Digital Estate Planning

Digital lock

With nearly four billion registered e-mail accounts worldwide, a large aspect of estate planning concerns what happens to this information after we are gone.  Entrepreneurs and legislative groups attempt to offer solutions and build awareness of the complications surrounding digital estate planning after death.

One of the problems with fiduciary access is that it may be a violation of federal privacy law or a computer fraud and abuse act.  It may be a criminal act to violate the terms of service agreement.  However, the inability to shut down a deceased loved one’s accounts could have unforeseen risks.

The year after someone passes is one of the most vulnerable times for identity theft.  Thieves can use a dead person’s information to rack up credit card charges, apply for loans, or even file false tax returns.  Even more frightening, much of this information can be found on the internet through something as simple as a shopping account.   

To date, only seven states have laws governing online estate planning.  Yet the committee on the Uniform Law Commission is attempting to change that by drafting the Fiduciary Access to Digital Assets Act, which would give fiduciaries the same rights over online estates as they have over physical estates.  The bill is currently being reviewed by the Uniform Law Commission and will be voted on for approval on Wednesday.  It will then be up to the state legislatures to propose the bill. 

See Hari Sreenivasan, Dead and Online: What Happens to Your Digital Estate When You Die? PBS News Hour, July 11, 2014.                                                                                                                                                                                                 

July 12, 2014 in Estate Administration, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Monday, May 19, 2014

Virtual Currencies Raise Questions for Estate Planning


As we have entered an era where technology is supreme, it is increasingly important for estate planners and tax advisers to be aware of their client’s valuable digital assets.  New assets are being created that only exist in the digital world, including virtual currencies such as Bitcoin and Dogecoin. 

Of all 200 available virtual currencies, Bitcoin is the most renowned and widely used.  The IRS recently issued Notice 2014-21 to describe how they will apply U.S. tax principles to virtual currency.  Generally, the IRS treats virtual currency as property for tax purposes, valued in U.S. dollars.  Thus, the virtual currency has a tax basis and a person realizes a gain or loss when the currency is exchanged for other property.  However, it is not treated as a currency that could generate foreign currency gain or loss for federal tax purposes. 

See Jim Lamm, Estate Planning and Tax Issues for Bitcoin and Other Virtual Currencies, JD Supra Business Advisor, May 15, 2014. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

May 19, 2014 in Estate Planning - Generally, New Legislation, Web/Tech | Permalink | Comments (0) | TrackBack (0)

New Bill Tackles Digital Asset Disputes in Estate Planning


The Delaware General Assembly will address legislation concerning estate planning in the digital sphere.  A recent bill by Rep. Darryl Scott would require companies such as Google to relinquish control of users accounts to a trusted person outlined in their will.  Companies would be required to give estate executors access to accounts within 30 days of a request or face civil penalties. 

While privacy concerns exist, Scott says there are safeguards built into the proposal.  “They’re concerned about user privacy as well and I have that concern…People can designate assets that they don’t want to be included as part of their estate.” 

If approved, this bill will be the first comprehensive law of its kind.  Seven other states grant different levels of access. 

See James Dawson, Bill Seeks to Address Digital Asset Issues in Estate Planning, Delaware Public Media, May 16, 2014. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

May 19, 2014 in Estate Administration, Estate Planning - Generally, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, May 15, 2014

Apps to Aid Accountability


Oftentimes, the impulse behind the choices investors make is centered on their confidence—confidence in the future and around risk.  Advisors understand that managing client perception and client anxiety is an important task, but can prove to be very difficult.  However, there are tools available that can give advisors help, particularly consumer-facing programs that reps can co-opt and use to push their clients in a better direction. 

  • Stickk. Stickk lets users sign an online contract for any goal they want to meet, for example, losing weight, completing a degree, or sticking to a budget and getting out of debt.  Stickk’s premise is based on research around “commitment contracts,” which can help people achieve goals by giving them tangible incenitves.
  • Beeminder. This forces users to make a commitment to a goal and set certain progress points that must be met each week.  Falling off track requires a payment to Beeminder, which can be a powerful incentive.
  • Planwise. This app allows users to visualize how financial choices affect their bottom line.  Users enter several choices in the app, and the app projects forward to show how financial decisions today affect future savings. 

See Lauren Barack, Apps to Change Financial Behavior, WealthManagement.com, May 13, 2014. 

May 15, 2014 in Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, May 9, 2014

Article on Managing Digital Property


James D. Lamm (Gray Plant Mooty), Christina L. Kunz (Professor Emerita, William Mitchell College of Law), Damien A. Riehl (Robins, Kaplan, Miller & Ciresi), and Peter John Rademacher (William Mitchell College of Law, J.D. Candidate 2014) recently published an article entitled, The Digital Death Conundrum: How Federal and State Laws Prevent Fiduciaries from Managing Digital Property, 68 U. Miami L. Rev. 385 (Winter 2014).  Provided below is the introduction:

The digital world is a popular place these days. In its fourth quarter of 2012, Facebook reported 618 million daily users. In fiscal year 2012, Google reported 235 million active users across its properties (e.g., Gmail and YouTube); Activision Blizzard estimated over 9.6 million subscribers to World of Warcraft; and the list goes on. The United States's Internet use ranks among the highest--both in number and percentage of population. Members, users, and subscribers (“account holders”) accumulate digital property by uploading photographs, videos, and other data, investing time into profile development, adding written material, and building their own subscribership accounts.

How should this property be managed during the account holders' lives? Upon the account holders' deaths, what should happen to it? How should it be maintained? How should it be distributed? As one author notes, “[M]ore and more of what happens in the [physical] world is also seeping into the [digital] world . . . .” That includes our need for fiduciaries in many aspects of life and death. Every single Internet user will die, many will suffer some form of incapacity, and some will have valuable or significant digital property that needs to be protected and managed. In the physical world, legal mechanisms can address these issues.

Other bodies of law do not impede these mechanisms, which have evolved over hundreds of years, but the digital world is like the “Wild West,” in that its growth has outpaced legal and regulatory efforts. Although federal and state governments have enacted laws to control aspects of the digital world, some of these laws predate the World Wide Web and stand as inadvertent barriers to the execution of fiduciary duties in the digital world. State legislatures, private entities, and courts have made some efforts to correct these problems, but no current solutions provide the level of certainty that account holders and courts typically seek in fiduciary property management. Consequently, account holders are uncertain about the future of their digital property; fiduciaries must choose between refusing to manage digital property at the risk of civil liability, and executing their duties at the risk of criminal liability. Additionally, digital service providers (“service providers”) must fend for themselves by carefully crafting their terms of service (“TOS”) and privacy policies (“PPs”). 

This article discusses four types of fiduciaries, each of which is affected by the vast growth in and the need to manage digital property. The article begins by defining digital property and discussing why it must be managed. The article then discusses how digital property affects powers of attorney, conservatorships, probate administration, and trusts. 

After illustrating the problems that digital property creates for each fiduciary, the article shifts to resolving these problems. It begins by debunking purported solutions by both private and governmental entities. It concludes by offering a holistic approach to resolving the conflicts facing account holders, fiduciaries, and service providers and providing the level of security sought in fiduciary property management, as well as a best-practices approach in the interim to a complete solution.

May 9, 2014 in Articles, Estate Administration, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)