Don’t Forget to Include Your Digital Assets In Your Estate Plan—Part 1

December 25, 2018

If you’ve created an estate plan, it likely includes traditional wealth and assets like finances, real estate, personal property, and family heirlooms. But unless your plan also includes your digital assets, there’s a good chance this online property will be lost forever following your death or incapacity. What’s more, even if these assets are included in your plan, unless your executor and/or trustee knows the accounts exist and how to access them, you risk burdening your family and friends with the often lengthy and expensive process of locating and accessing them. And depending on the terms of service governing your online accounts, your heirs may not be able to inherit some types of digital assets at all. With our lives increasingly being lived online, our digital assets can be quite extensive and extremely valuable. Given this, it’s more important than ever that your estate plan includes detailed provisions to protect and pass on such property in the event of your incapacity or death. Types of digital assets Digital assets generally fall into two categories: those with financial value and those with sentimental value. Those with financial value typically include cryptocurrency like Bitcoin, online payment accounts like PayPal, domain names, websites and blogs generating revenue, as well as other works like photos, videos, music, and writing that generate royalties. Such assets have real financial worth for your heirs, not only in the immediate aftermath of your death or incapacity, but potentially for years to come. Digital assets with sentimental value include email accounts, photos, video, music, publications, social media accounts, apps, and websites or blogs with no revenue potential. While this type of property typically won’t be of any monetary value, it can offer incredible sentimental value and comfort for your family when you’re no longer around. Owned vs licensed Though you might not know it, you don’t actually own many of your digital assets at all. For example, you do own certain assets like cryptocurrency and PayPal accounts, so you can transfer ownership of these in a will or trust. But when you purchase some digital property, such as Kindle e-books and iTunes music files, all you really own is a license to use it. And in many cases, that license is for your personal use only and is non-transferable. Whether or not you can transfer such licensed property depends almost entirely on the account’s Terms of Service Agreements (TOSA) to which you agreed (or more likely, simply clicked a box without reading) upon opening the account. While many TOSA restrict access to accounts only to the original user, some allow access by heirs or executors in certain situations, while others say nothing about transferability. Carefully review the TOSA of your online accounts to see whether you own the asset itself or just a license to use it. If the TOSA states the asset is licensed, not owned, and offers no method for transferring your license, you’ll likely have no way to pass the asset to anyone else, even if it’s included in your estate plan. To make matters more complicated, though you heirs may be able to access your […]

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How to Fix Errors in Your Credit Report

December 18, 2018

While some of those TV commercials for free credit-score report companies are pretty funny, having errors on your credit report is no laughing matter. Indeed, your credit score is one of the main factors determining your access to loans, credit cards, housing, and sometimes even jobs. From late payments that were actually made on time and paid debts that are still listed in collections to fake accounts opened in your name by identity thieves, there are all kinds of errors that can end up in your report. What’s more, even if the mistakes were made by the banks, lenders, and/or credit bureaus, they have no obligation to fix them—unless you report them. Given this, it’s vital to monitor your credit score regularly and take immediate action to have any errors corrected. Here, we’ll discuss a few of the most common mistakes found in credit reports and how to fix them. Finding and fixing errors The first step to ensure your credit report stays error-free is to obtain a copy of your report from each of the three major credit-reporting agencies: Experian, TransUnion and Equifax. You can get free access to your reports and even helpful credit monitoring services from companies like CreditKarma.com. Check each of the reports closely for errors. Some of the most common mistakes include: Misspellings and other errors in your name, address, and/or Social Security number Accounts that are mistakenly reported more than once Loan inquiries you didn’t authorize Payments inadvertently applied to the wrong account or noted as unpaid, when they were in fact paid Old debts that have been paid off or should’ve been removed from your report after seven years Fake accounts and debts created by identity thieves Filing a dispute If anything is inaccurate on your report, file a dispute with the credit bureaus as soon as possible. In fact, notifying these agencies is a prerequisite if you eventually decide to take legal action. Note that if a mistake appears on more than one report, you’ll need to file a dispute with each credit bureau involved. To ensure your dispute has the best chances of success, follow these steps: Use the appropriate forms: Each credit bureau has different processes for filing a dispute—whether via regular mail or online—so check the particular bureau’s website for instructions and forms. You can find sample letters showing how to dispute credit reports on the FTC and Consumer Financial Protection Bureau (CFPB) websites. Be absolutely clear: Clearly identify each disputed item in your report, state the facts explaining why the information is incorrect, and request a deletion or correction. If you’ve found multiple errors, include an itemized list of each one. Provide evidence: It’s not enough to just say there’s a mistake; you should substantiate your claim with proof. Collect all documents related to the account, including account statements, letters, emails, and legal correspondence. Include copies (never originals) of this paperwork and highlight or circle the relevant information. Contact credit providers: In addition to the credit bureaus, the CFPB recommends you also contact the credit providers that supplied the incorrect information to the bureaus. Check with the particular […]

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Use Estate Planning to Enrich Your Family With More Than Just Material Wealth

December 11, 2018

In the weeks before her death from ovarian cancer, author Amy Krouse Rosenthal gave her husband Jason one of the most treasured gifts a person could receive. She penned the touching essay “You May Want to Marry My Husband” in the New York Times as a final love letter to him. The essay took the form of a heart-wrenching yet-humorous dating profile that encouraged him to begin dating again once she was gone. In her opening description of Jason, she writes: “He is an easy man to fall in love with. I did it in one day.” What followed was an intimate list of attributes and anecdotes, highlighting what she loved most about Jason. It reads like a love story, encompassing 26 years of marriage, three grown children, and a bond that will last forever. She finished the essay on Valentine’s Day, concluding with: “The most genuine, non-vase-oriented gift I can hope for is that the right person reads this, finds Jason, and another love story begins.” Just 10 days after the essay was published in March 2017, Amy died at age 51. Finding meaning again Amy’s essay immediately went viral, and Jason received countless letters from women across the globe. Although he has yet to begin a new relationship, Jason said the outpouring of letters gave him “solace and even laughter” in the darkest days following his wife’s death. Just over a year later, Jason wrote his own essay for the Times, “My Wife Said You May Want to Marry Me,” in which he expressed how grateful he was for Amy’s words and recounted the lessons he’d learned about loss and grief since her passing. He said his wife’s parting gift “continues to open doors for me, to affect my choices, to send me off into the world to make the most of it.” Jason has since given a TED Talk on his grieving process in hopes of helping others deal with loss, something he said he never would’ve done without Amy’s motivation. Toward the end of his essay, Jason gave readers a bit of advice for how they can provide their loved ones with a similar gift: “Talk with your mate, your children, and other loved ones about what you want for them when you are gone,” he wrote. “By doing this, you give them liberty to live a full life and eventually find meaning again.” Preserving your intangible assets This moving story highlights what could be the most valuable, yet often-overlooked aspect of estate planning. Planning isn’t just about preserving and passing on your financial wealth and property in the event of your death or incapacity. When done right, it equates to sharing your family’s stories, values, life lessons, and experiences, so your legacy carries on long after you (and your money) are gone. Indeed, as the Rosenthals demonstrate, these intangible assets can be among the most profound gifts you can give. Of course, not everyone has the talent or time to write a similarly moving essay or have it published in the New York Times, nor is that necessary. We recognize the enormous value these assets […]

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3 Deadly Sins of Retirement Planning

December 4, 2018

Retirement planning is one of life’s most important financial goals. Indeed, funding retirement is one of the primary reasons many people put money aside in the first place. Yet many of us put more effort into planning for our vacations than we do to prepare for a time when we may no longer earn an income. Whether you’ve put off planning for retirement altogether or failed to create a truly comprehensive plan, you’re putting yourself at risk for a future of poverty, penny pinching, and dependence. The stakes could hardly be higher. When preparing for your final years, it’s not enough to simply hope for the best. You should treat retirement planning as if your life depended on it—because it does. To this end, even well thought-out plans can contain fatal flaws you might not be aware of until it’s too late. Have you committed any of the following three deadly sins of retirement planning? 1. Not having an actual plan Even if you’ve been diligent about saving for retirement, without a detailed, goal-oriented plan, you’ll have no clear idea whether your savings strategies are working adequately or not. And such plans aren’t just about calculating a retirement savings number, funding your 401(k), and then setting things on auto-pilot. Once you know how much you’ll need for retirement, you have to plan for exactly how you’ll accumulate that money and monitor your success. The plan should include clear-cut methods for increasing income, reducing spending, maximizing tax savings, and managing investments when and where needed. What’s more, you should regularly review and update your asset allocation, investment performance, and savings goals to ensure you’re still on track to hit your target figure. With each new decade of your life (at least), you should adjust your savings strategies to match the specific needs of your new income level and age. The plan should also take into consideration unforeseen contingencies, such as downturns in the economy, health emergencies, layoffs, and inflation. Failing to plan, as they say, is planning to fail. 2. Not maximizing the use of tax-saving retirement accounts One way or another, the money you put aside for retirement is going to be taxed. However, by investing in tax-saving retirement accounts, you can significantly reduce the amount of taxes you’ll pay. Depending on your employment and financial situation, there are numerous different plans available. From traditional IRAs and 401(k)s to Roth IRAs and SEP Plans, you should consider using one or more of these investment vehicles to ensure you achieve the most tax savings possible. What’s more, many employers will match your contributions to these accounts, which is basically free money. If your employer offers matching funds, you should not only use these accounts, but contribute the maximum amount allowed—and do so as early as possible. Since figuring out which of these plans will offer the most tax savings can be tricky—and because tax laws are constantly changing—you should consult with us and a professional financial advisor to find the one(s) best suited for your particular situation. Paying taxes is unavoidable, but there’s no reason you should pay any more than […]

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When Something is NOT Better Than Nothing — Part 2

November 27, 2018

Last week, we shared the first part of this series discussing the hidden dangers of do-it-yourself estate planning. In part two, we cover one of the greatest risks posed by DIY documents. You might think you can save time and money by using do-it-yourself estate planning documents you find online. You’re probably anxious to check estate planning off your life’s to-do list, and these forms offer a seemingly quick and inexpensive way to handle this important task. You may even realize such generic plans aren’t as high quality as those drafted with an attorney’s help, but with your hectic schedule, a DIY will is just way more convenient. Besides, having “something” in place is better than having nothing, right? Unfortunately, this is one case in which SOMETHING is not better than nothing. Indeed, the false sense of security offered by DIY wills can lead you to believe you have things covered and no longer have to worry about estate planning. The reality, however, is that such generic forms could end up costing the loved ones you leave behind more money and heartache than if you’d never gotten around to doing anything at all. In this way, DIY wills and other legal documents are among the most dangerous choices you can make for the people you love. In part one, we discussed the many ways DIY plans can fail to keep your family out of court and out of conflict, and here we’ll explain how these generic documents can leave the people you love most of all—your children—at risk. The people you love most It’s probably distressing to think that by using a DIY will you could force your loved ones into court or conflict in the event of your incapacity or death. And if you’re like most parents, it’s probably downright unimaginable to contemplate your children’s care falling into the wrong hands. Yet that’s exactly what could happen if you rely on free or low-cost fill-in-the-blank wills found online, or even if you hire a lawyer who isn’t equipped or trained to plan for the needs of parents with minor children. Naming and legally documenting guardians entails a number of complexities that most people aren’t aware of. Even lawyers with decades of experience frequently make at least one of six common errors when naming long-term legal guardians. If wills drafted with the help of a professional are likely to leave your children at risk, the chances that you’ll get things right on your own are pretty much zero. What could go wrong? If your DIY will names legal guardians for your kids in the event of your death, that’s great. But does it include back-ups? And if you named a couple to serve, how is that handled? Do you still want one of them if the other is unavailable due to illness, injury, death, or divorce? And what happens if you become incapacitated and are unable to care for your children? You might assume the guardians named in the DIY will would automatically get custody, but your will isn’t even operative in the event of your incapacity. Or perhaps the […]

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When Something is NOT Better Than Nothing—Part 1

November 20, 2018

Go online, and you’ll find tons of websites offering do-it-yourself estate planning documents. Such forms are typically quite inexpensive. Simple wills, for example, are often priced under $50, and you can complete and print them out in a matter of minutes. In our uber-busy lives and DIY culture, it’s no surprise that this kind of thing might seem like a good deal. You know estate planning is important, and even though you may not be getting the highest quality plan, such documents can make you feel better for having checked this item off your life’s lengthy to-do list. But this is one case in which SOMETHING is not better than nothing, and here’s why: A false sense of security Creating a DIY will online can lead you to believe that you no longer have to worry about estate planning. You got it done, right? Except that you didn’t. In fact, you thought you “got it done” because you went online, printed a form, and had it notarized, but you didn’t bother to investigate what would actually happen with that document in place in the event of your incapacity or when you die. In the end, what seemed like a bargain could end up costing your family more money and heartache than if you’d never gotten around to doing anything at all. Creating a DIY will can lead you to believe that you no longer have to worry about estate planning. In the back of your mind, you might even promise that one day you’ll revisit and update your plan with something better, but chances are, having done “something” will lead you to put this off until it’s too late. By doing nothing, on the other hand, at least you won’t be lulled into a false sense of security, and estate planning will still be at the top of your life’s to-do list, as it should be until you handle it properly. Not just about filling out forms Unfortunately, because many people don’t understand that estate planning entails much more than just filling out legal documents, they end up making serious mistakes with DIY plans. Worst of all, these mistakes are only discovered when you become incapacitated or die, and it’s too late. The people left to deal with your mistakes are often the very ones you were trying to do right by. The primary purpose of wills and other estate planning tools is to keep your family out of court and out of conflict in the event of your death or incapacity. With the growing popularity of DIY wills, tens of thousands of families (and millions more to come) have learned the hard way that trying to handle estate planning alone can not only fail to fulfill this purpose, it can make the court cases and conflicts far worse and more expensive. The hidden dangers of DIY wills From the specific state you live in and the wording of the document to the required formalities for how it must be signed and witnessed, there are numerous potential dangers involved with DIY wills and other estate planning documents. Estate planning is […]

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To Live a Happier life, Start Thinking About Death Now

November 6, 2018

Want to know a proven way to live a more fulfilling life? All you have to do is fully accept the fact that one day you’re going to die. “I am of the nature to die. There is no way to escape death.” -Upajjhatthana SuttaThe unavoidable nature of death is a basic tenet found in every religion. Indeed, the acceptance of death is so important in Buddhism that “impermanence,” or the fact that everything born eventually dies, is at the top of the Buddha’s list of the three universal characteristics of existence. Before religious practice, Tibetan Buddhists chant, “The whole world and its inhabitants are impermanent. The life of human beings is like a bubble. Death comes without warning; this body too will be a corpse.” Such teachings may seem morbid, but they’re actually designed to awaken you from denial and inspire you to fully appreciate life because you never know when it will end. “How sad it is that most of us only begin to appreciate our life when we are at the point of dying.” -Sogyal Rinpoche Numerous individuals have discovered that contemplating and accepting their own mortality is a powerful source of happiness. It may seem counterintuitive, but this isn’t something only found in religious teachings; it’s also been demonstrated by modern science. Countless healthcare professionals report that people facing terminal illness often experience an incredible sense of peace and fulfillment in the days and weeks before they die. Many of them describe the acceptance of death as a life-changing event, confessing they never knew what it meant to live until they knew they were going to die. The same is true for many who undergo a near-death experience (NDE). After staring death in the face, they report that their lives have much greater meaning. They frequently make dramatic life changes because they know without a doubt that any day, even today, might be their last. “It is only in the face of death that man’s self is born.” -St Augustine You’ve undoubtedly heard the key to happiness is to be fully present in each and every moment. This advice is also derived from acceptance of death. By accepting that death is inevitable, we’re inspired to embrace every second of our lives with more gratitude and joy because we know that our existence is so fleeting. If you’ve been avoiding thinking about and preparing for death, you may be missing out on an incredible opportunity. What all of these experiences show us is that death is an essential part of what makes life so sweet. One of the biggest steps in accepting death is to prepare for it with proper estate planning. And proper estate planning is needed, regardless of how big or small you think your estate is, because no matter what, your family is going to have to handle whatever you have when you’re gone. Indeed, facing life’s greatest fear head-on and using it as an opportunity to protect and provide for your family is one of the greatest gifts you can give yourself and those you love. If you’re ready to begin truly living […]

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Who Should Khloé Kardashian Choose as Legal Guardian For Her Child—One Instance Where ‘Keeping Up With the Kardashians’ Might Be A Good Idea

October 30, 2018

You might not be a big fan of their typical life choices, but the Kardashians recently demonstrated impressive wisdom in protecting their minor children using estate planning. During a recent episode of Keeping Up With The Kardashians, Khloé Kardashian was preparing to give birth to her first child, daughter True. Khloé was second-guessing her initial choice to name her sister Kourtney as the child’s legal guardian in the event something happened to her or the baby’s father, Tristan Thompson. During her pregnancy, Khloé spent lots of time with her other sister Kimberly and her family, daughters North, Chicago, son Saint, and husband Kanye West. Watching her interacting with her own kids, Khloé really connected with Kim’s mothering style and pondered if she might be a better choice as guardian. “I always thought Kourtney would be the godparent of my child, but lately I’ve been watching Kim, and she’s been someone I really gravitate to as a mom,” Khloé said. To make things more challenging, Kourtney always assumed she’d be named guardian and said as much. Over the years, Khloé had lots of fun times with Kourtney’s family—sons Mason, Reign, and daughter Penelope—and Kourtney thought her own passion for motherhood would make her the natural choice. For guidance, Khloé asked her mother, Kris Jenner, how she chose her kids’ guardians. Kris’ answer was to compare how her two sisters’ raised their own children. “You just have to think,” Kris told her. “‘Where would I want my child raised, in which environment? Who would I feel like my baby is going to be most comfortable and most loved?’” In the end, Khloé chose Kim over Kourtney. She explained her decision had nothing to do with her respect or love of Kourtney; it was merely about which style of parenting she felt most comfortable with. “Watching Kimberly be a mom, I really respect her parenting skills—not that I don’t respect Kourtney’s, I just relate to how Kim parents more,” said Khloé. “I just have to make the best decision for my daughter.” Lessons learned Khloé’s actions are admirable for several reasons. First off, far too many parents never get around to legally naming a guardian to care for their children in the event of their death or incapacity. Khloé not only made her choice, but she did so before the child was even born. Khloé also took the time to speak and spend time with her sisters beforehand, so the family understood the rationale behind her decision. Khloé was lucky her choices were close family members, so she had ample opportunity to experience both of their parenting styles. Depending on your life situation, you might not be able to spend that much time vetting your choice. But at the very least, you should sit down with each of your top candidates to openly and intimately discuss what you’d expect of them as your child’s new parents. Avoid conflict and court Furthermore, with multiple family members vying for the guardian role, Khloé’s quick action may have prevented a potential nightmare. If she’d delayed naming a guardian and something happened to her, Kourtney, Kim, and […]

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Questions and Answers About Personal Liability Umbrella Insurance

October 23, 2018

It’s no secret that we live in a litigious society. And though our right to a fair trial is one of the hallmarks of American democracy, it has also led to a lawsuit-crazy culture. In this atmosphere, you’re at near-constant risk for costly lawsuits, many times even when you’ve done nothing wrong. This is especially true if you have substantial wealth, but even those with relatively few assets can find themselves in court. If you’re sued, your traditional homeowner’s and/or auto insurance will likely offer you some liability coverage, but those policies only protect you up to certain limits before they max out. Given this, you should consider adding an extra layer of protection by investing in personal liability umbrella insurance. What is umbrella insurance? Umbrella insurance offers a secondary level of protection against lawsuits above and beyond what’s covered by your homeowners, auto, watercraft, and/or other personal insurance policies. For instance, if someone is injured in your home, they might sue you for their medical bills and lost wages. Your homeowner’s insurance will cover you up to a certain dollar amount, but you’re personally liable for anything beyond that limit. This is where umbrella insurance kicks in. Once your underlying insurance maxes out, the umbrella policy will help pay for the resulting damages and legal expenses if you lose the case. If you win, it can help cover your lawyer’s fees. Who should purchase it? Umbrella insurance is particularly important for those with a high net worth. But seeing that everyone has the potential to be sued, it’s a good idea even for those without substantial assets. Indeed, if you’re sued and lose, the judgment against you may exceed the value of your current assets. In such a case, the court can allow the plaintiff to go after your future earnings, potentially garnishing your wages for years. To this end, umbrella insurance not only protects your current assets, but your future ones as well. How much coverage do I need? Most people will be adequately covered with a $1 million umbrella policy. If you earn more than $100,00 a year or have more than $1 million in assets, you may want to invest in additional coverage. A good rule of thumb is to buy an umbrella policy with coverage limits that are at least equal to your net worth. How much does umbrella insurance cost? Umbrella insurance is fairly inexpensive. You can buy a $1 million umbrella liability policy for between $150 and $300 per year. An additional million in coverage will run you about $100, and roughly $50 for every million beyond that. Umbrella policies are inexpensive because they only go into effect after your underlying homeowners or auto policy is exhausted. In light of this, most insurers require you to have at least $250,000 in liability on your auto policy and $300,000 on your homeowners before they’ll sell you a $1 million umbrella policy. How can I purchase umbrella insurance? You can buy an umbrella policy from the same insurance company you use for your other policies. In fact, some companies require you to purchase all of […]

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What Happens to Your Facebook Account When You Die?

October 16, 2018

If you’re active on social media, Facebook probably plays a prominent role in your life. And now the social media titan can even play a role in your afterlife. Today, estate planning encompasses not only your tangible assets—bank accounts and real estate—but your digital assets as well, such as cryptocurrency, websites, and social media accounts. Though social media may seem trivial compared to the rest of your personal property, a Facebook account functions as a virtual diary of your daily life, making it a key part of your legacy—and one you’ll likely want to protect. Because social media is so new, there are very few state laws governing how your Facebook account should be handled upon your death. In light of this, Facebook itself is in nearly total control of what happens to your profile after you die. And without proper planning, your post-mortem Facebook presence can haunt the loved ones you leave behind. Since roughly 8,000 Facebook users die every day, the company has created a few options for dealing with your account once you’re gone. While it’s possible for you to take care of this on your own, many people are working with legal professionals like us to incorporate these digital assets into their overall estate plan to ensure their legacy is properly preserved and protected. Here are three options for what you can do with your Facebook account when you die: 1. Do nothing Unless Facebook is notified of your death, it assumes you’re still alive, and your profile remains active indefinitely. While this might not seem like a big deal, your profile will continue to be included in Facebook searches, People You May Know suggestions, and birthday reminders. Your friends and family likely won’t want to be constantly reminded of your absence, and even worse, ex-friends and/or trolls will be able to post potentially hurtful messages on your timeline. To shield your loved ones from this kind of thing, you should go with one of the other options. Have the account deleted You can notify Facebook that you’d like to have your account permanently removed from its servers upon your passing. Alternatively, a friend, family member, or your executor can make the same request after your death. This will completely delete your profile and all of its associated content from Facebook for good. Additionally, one of these individuals can request that your account’s content be downloaded and saved before the profile is deleted. Content that’s eligible for download includes wall posts, photos, videos, profile info, events, and your friend list. However, Facebook will not allow any third-party to access or download your personal messages or login information. Memorialize the account In 2009, Facebook began allowing accounts of the deceased to be “memorialized” at the request of a friend or family member. Once an account has been memorialized, only confirmed friends can see the profile or find it in a search. Your memorialized profile will no longer appear in friend suggestions, nor will anyone receive birthday updates or other account notifications. When your account is memorialized, the word “Remembering” will be added next to your name on […]

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