Wills, Trusts & Estates Prof Blog

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

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Thursday, October 9, 2014

IRS Urged To Reconsider Virtual Currency Guidance

Bitcoin 2

In response to Notice 2014-21, a committee of the Texas Society of CPAs pressed the IRS to reassess guidance on the treatment of convertible virtual currencies, such as Bitcoin.  In the Notice, the IRS announced it would treat such currencies as intangible personal property, rather than as domestic or foreign currencies.

The Federal Tax Policy Committee of the TSCPA argued that virtual currencies ought to be treated as foreign currencies, for which there is already a body of settled law under Section 988 and supporting regulations.  The letter further noted, “there is no organized market to objectively determine the value of virtual currencies” and disinterested third parties do not operate existing exchanges.  The letter acknowledged there would have to be some method created for distinguishing tax reporting purposes between holding a virtual currency as an investment and using it in the ordinary course of business.  

See Texas CPAs Urge IRS to Reconsider Virtual Currency Guidance, Charitable Planning, Oct. 6, 2014.

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

October 9, 2014 in Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Monday, October 6, 2014

Retirement Apps Are New and Underutilized Tool

AppRecent research done by Corporate Insight shows that the number of retirement plan companies taking advantage of mobile apps as part of their plans is relatively low. While 10 out of 17 are using mobile apps, only three have apps designed specifically for tablets. However, there has been a significant increase in retirement app availability compared to the results of the 2013 Corporate Insight study that reveled zero application use by retirement firms.

See Mark Miller, Retirement: Is There an App for That?, Wealth Management, Oct. 3, 2014.

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

October 6, 2014 in Estate Planning - Generally, Non-Probate Assets, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, September 26, 2014

Man Behind Bitcoin Ponzi Scheme Forced to pay Millions

BagAs one of the most well known cyber-currencies, Bitcoin has attracted many commentators, promoters, and scam artists. Earlier this week, the U.S. District Court for the Northern District of Texas entered an order for Tendon T. Shavers to pay disgorgement of $40 million and imposed a civil penalty of $150,000 for the Bitcoin Ponzi scheme that he ran on investors of Bitcoin Savings & Trust. Shavers targeted his victims through chat rooms and forums intended for those interested in Bitcoin, and operated under the user-name “pirateat40.”

See Jay Adkisson, BitcoinSavings & Trust Comes Up $40 Million Short on Trust Part, Forbes, Sept. 25, 2014.

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

September 26, 2014 in Current Affairs, Current Events, Estate Planning - Generally, New Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Saturday, September 20, 2014

Article on Covering Your Digital Assets

LaptopMatt Borden recently published an article entitled, Covering Your Digital Assets: Why the Stored Communications Act Stands in the Way of Digital Inheritance, 75 Ohio St. L.J. 405-446 (2014).  Provided below is the introduction of the article:

The Internet [is] the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.1

It is very difficult to regulate and craft legislation to manage a problem that no one fully understands. Nonetheless, the juggernaut that society has come to know as the World Wide Web has come to be managed by a myriad of complex and outdated state, national, and international laws.2 Similarly, social media has emerged over the past decade as the largest use of the internet and is also largely not understood.3 Since social media is a subset of the World Wide Web, it too is regulated by the same tangle of state, national, and international laws.4 Social media and the internet have created remarkable advances in society that have divided generations—one raised with a mouse in hand and one who has never, and may never, fully grasp the technology’s reach. And yet these two generations, separated by the rapid and largely unknown expansion of information and data, must equally confront the digital inheritance problem.

In the realm of inheritance, the intersection of death, cyberspace, and outdated statutes has highlighted one of the many misunderstood issues about the modern internet and social media: what happens to one’s social media and email accounts and digital content when she dies? Do heirs have the right to access old Facebook accounts and email accounts? Do they have a right to use them? These questions are complicated by the twist of federal legislation regulating internet privacy, most notably the Stored Communications Act (SCA).5 The SCA, a subsection of the Electronic Communications Privacy Act (ECPA),6 which originally regulated the interception of electronic  communications by federal law enforcement agencies, has encouraged social  media and email providers to adopt strict provisions regarding who may access a deceased user’s account after death.7 Thus, even though the SCA was originally drafted to inhibit illegal wiretaps,8 it now stands as a barrier to digital inheritance, a purpose which is outside its original scope and conflicts with traditional state approaches to inheritance.

This Note explores how the statutory scheme of the Stored Communications Act interferes with the transfer of digital assets and content after death. Part II lays out three cases that illustrate the SCA’s effect on digital inheritance. Part III examines the history of the SCA and what activity the Act regulates. Part IV explores how the SCA has subsequently influenced the privacy policies of social media and email providers, which prevents heirs, beneficiaries, and estate fiduciaries from accessing the accounts or content of deceased users. Part V explains why allowing digital inheritance is beneficial for society. Finally, Part VI advocates for an amendment to the SCA that would include an exception for parties in digital estates, namely heirs, beneficiaries, and estates fiduciaries, considers implications for such an amendment, and explores how other solutions do not adequately address the issue of SCA interference in digital inheritance.

September 20, 2014 in Articles, Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, September 11, 2014

Estate Planning for Digital Assets

Computer 2

The Anderson family recently lost their nineteen-year-old son and is now seeking access to his text messages, e-mails, and Facebook account to find out more about the moments leading up to his tragic death.  The family is hoping to get 20,000 signatures to an online petition asking the Minnesota State Legislature to pass a law clearly authorizing fiduciary access to a deceased person’s digital data. 

This is an unfortunate scenario that illustrates the importance of planning ahead for your digital property.  It is essential to arrange for full access to your data to keep estate administration costs down, to provide for a smooth estate administration, and to ensure that none of your valuable or significant digital property is overlooked.  Contact your estate-planning attorney to include plans for your digital property in your estate plan.  Make sure this plan specifies your wishes about your property and appoints a fiduciary to act on your behalf with respect to your digital property, during incapacity and after death.  Furthermore, ensure that your estate planning documents authorize the companies that hold your electronic data to release that data to your fiduciaries during your incapacity and after your death, which is important for the Stored Communications Act’s privacy protections.

See Jim Lamm, Video Clip: Family Wants Access to Son’s Digital Data After Death, Digital Passing, Sept. 10, 2014.

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

September 11, 2014 in Estate Administration, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, September 5, 2014

Wills of WWI Soldiers Garner Huge Interest

WWI SoldierAs I have previously discussed, last year the wills of thousands of fallen British soldiers from WWI were published online by Her Majesty's Court and Tribunal Service (HMCTS). The historic documents that were found in the pockets of the soldiers have garnered huge interest from scholars, historians, and the general public. The site has received over a million searches for these wills and over 10,000  individuals have purchased their own copy of one of the wills.

See Ministry of Justice, Over One Million Searches for War Heroes’ Wills, GOV.UK, Aug. 29, 2014.

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

September 5, 2014 in Estate Planning - Generally, Web/Tech, Wills | Permalink | Comments (0) | TrackBack (0)

Sunday, August 24, 2014

Delaware Sets Stage for Answering Digital Assets Questions

LaptopAs I have previously discussed, Delaware recently passed legislation that allows families in Delaware the ability to access digital assets and accounts of deceased family members the same way they would be given access to physical documents.  This new law makes Delaware the first state to give an answer to what happens to digital assets after death. For those in other states, the burden is on the individual to plan for what is to come of their online accounts. For assets to be available to family members after death, account passwords must be shared, though this is against the policies of most online account providers. If nothing is done, then many accounts just disappear, taking with them family photos, access to bank accounts, e-book collections, music libraries, and important medical information.

See Caitlin Dewey, What Happens to Your Online Life After You Die? Delaware Has Some Suggestions, The Washington Post, Aug. 20, 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.

August 24, 2014 in Current Affairs, Estate Planning - Generally, New Legislation, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Saturday, August 23, 2014

Questions Remain in Delaware's Digital Asset Law

Computer 2

Last week Delaware Governor Jack Markell signed into law legislation permitting Delawarean families the right to the digital assets of loved ones who are incapacitated or deceased, the same way they would be given access to physical documents.  Yet many people do not realize that our Twitter, Facebook, and email accounts are not our only online assets. 

The new Delaware law raises the complexities of how to deal with the accounts that house our e-book collections, music and video libraries, or even game purchases, and whether they can be transferred to family and friends after death.  While the bill broadly states digital assets include “data, audio, video, images, sounds, computer source codes, computer programs, software, software licenses,” the law also states these assets can be controlled by the deceased’s trustees only to the extent allowed by the original service’s end user license agreement (EULA). 

I have previously stated that the Delaware statute does not override this feature of Amazon’s, or most, EULAs, which are protected by other forms of federal law.  The bill is not designed to change an asset you could not transfer into one you can. 

Although tech companies have been dealing with some of the issues surrounding the accounts of the deceased, they have not specifically addressed the effect of EULAs on the fate of any products purchased with those accounts after someone has passed.  For now, estate planners are coming up with creative solutions.  Some planners suggest setting up a trust and using it to purchase digital assets.  In naming themselves and children as trust beneficiaries, they can pass down e-books or music without breaking any ban on third party transfers.

See Ariel Bogle, Who Owns Your iTunes Library After Death? Slate, Aug. 22, 2014.

Special thanks to Howard M. Zaritsky for bringing this article to my attention.

August 23, 2014 in Estate Administration, Estate Planning - Generally, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, August 22, 2014

Article on Digital Estate Planning


Kathleen Farro (Independent) recently published an article entitled, The ‘Digital First Sale Doctrine’: A Necessary Piece of the Digital Estate Planning Puzzle, (July 15, 2014).  Provided below is the abstract from SSRN:

As technology advances, the aspects of our lives that are played out in the digital realm, both personal and professional, are ever-increasing. We conduct our banking online, we communicate with friends, family and business associates via email and social networks, and we create original, creative works on internet-based applications. Our creative work, professional work, and practical communications that were once limited to oral communication and paper records are now captured, conveyed, and stored digitally. Trading tangible media for the digital realm has become commonplace. Some changes are as simple as the box of photographs stored in the closet that are being replaced by expansive online libraries of digital photographs. On a grander economic scale, for example, is the marketability of a celebrity persona that was once measured by his or her ability to promote products in a newspaper print ad or on a television commercial. Now, the number of people accessing that celebrity’s life, opinions and preferences in the digital realm can have an equal or greater financial effect. 

While this evolution can have many advantages in our every day lives – making thinking, doing, communicating, and working - easier, quicker, more efficient, and less expensive, it can also jeopardize things that we may take for granted in our purely "tangible" life. The digital age may decrease our actual, human interactions and compromise our privacy. It may reduce what may be considered "our property" in the tangible world to something owned and controlled by others when carried out in the digital realm. Within the conversion to a digital world, our property rights, and thus our ability to convey and devise those to others, may, quite literally, get lost in translation. 

The property rights we most frequently give up to carry on life in the digital realm are those that are carried out and promulgated within a framework of copyright-protected material. For example: email, Facebook, Twitter, and various "gaming" activities are copyright-protected. 

For estate planners, these facts present hurdles to carrying out the wishes of those who desire to transfer some of their digital "property" to their loved ones, friends, or others either by devise or within an inter vivos trust. For example, a man may spend years building an iTunes library of music. At $0.99 to $1.29 a song, and likely more in the future, he may invest thousands of dollars over the years in this collection. Upon his death or disability, he may wish to transfer this library to his children. The current law does not allow this; the point at which he himself is unable to use the library, there is no way in which any party can lawfully utilize that song library.

This paper will examine the property rights individuals generally hold in copyrighted material and digital copyrighted material. It provides a thorough explanation of the First Sale Doctrine as applied to tangible media and the limitations on its applicability in the digital realm. It then goes on to explain Congress’s first attempt at incorporating digital media into the First Sale Doctrine in 1998 – what conclusions it drew and why Congress declined to update the doctrine. Between technological advancements, court cases in the U.S. and overseas, and various other legal principles and practices, there are now substantial policy bases for revisiting a "digital" First Sale Doctrine. The implementation of a digital First Sale Doctrine would have far-reaching effects; however, for our purposes, this doctrine would at least provide individuals with assurance that their digital property can be preserved to pass along to others.

August 22, 2014 in Articles, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, August 21, 2014

Twitter's New Policy Removes Images of Deceased


Late Tuesday Twitter indicated it would be removing images and videos of deceased people at the request of family members; however, it put conditions on the policy. 

Twitter made this announcement a week after the daughter of the late comedian Robin Williams said she would quit Twitter after she received repugnant images of her father from online trolls.  The policy also comes after Twitter attempted to delete images and video depicting the gruesome death of U.S. photojournalist James Foley, who was killed by the militant group Islamic State (ISIS).  “In order to respect the wishes of loved ones, Twitter will remove imagery of deceased individuals in certain circumstances . . . When reviewing such media removal requests, Twitter considers public interest factors such as the newsworthiness of the content and may not be able to honor every request.”

The policy compels the estate or a person’s family member provides documents, such as a copy of a death certificate and government issued identification.  Yet Twitter continues to refuse to afford account access to anyone, even if they are related to the person who has died.

See Tim Hornyak, Twitter to Remove Images of Deceased Upon Request, IT News, Aug. 20, 2014.

Special thanks to Joseph Jacobson (Texas attorney) for bringing this article to my attention.

August 21, 2014 in Current Affairs, Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)