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Digital Footprints . . .

Where do they go when you're gone?

Have you stopped to consider just how much content you create online? These days it is nearly impossible not to interact with some form of digital media. Now, consider what will happen to all that content when you are gone.

The Rise of the “Digitoral Age”

I think most people recognize the importance of keeping track of  and protecting banking or investment accounts. For some business owners, access to digital accounts may be a crucial part of continuing the activities of their business. While many, if not all, online services require users to establish accounts and protect those accounts with a password or other authentication, such actions are often passed off as simply the terms of getting the benefits of the service.

It is important to note some implications raised by the Revised Uniform Fiduciary Access to Digital Assets Act (2015), or RUFADAA. According to the Act, almost anything a person can access via a digital device is considered a “digital asset.” This includes the contents of e-mail, blogs posted to a website, photos in the cloud, online payment services like PayPal, and even online subscriptions.

Why does it matter? Certainly privacy and security concerns have become more prominent as more of our personal information is stored online and cyber-criminals have become much more sophisticated. The Act, however, raises two significant points beyond privacy concerns, namely:

1. Digital assets as defined in the Act are recognized as property “with a corresponding right to own, manage and conserve in much the same manner as with real or tangible personal property.”

2. The Act applies to agents, fiduciaries, personal representatives of an estate and court-appointed guardians or conservators.

Understanding the Implications

Any information stored on a computer or other digital device (i.e., smartphone, tablet, e-book reader), content uploaded to a website, and any other “rights in digital property,” are now all considered as much a part of a person’s estate as a house or investments.

Digital assets need to be incorporated into estate planning just as one must plan for transferring ownership to their home, or how money or other personal assets will be distributed on their death. Failure to do so could mean that any information in such digital accounts may remain inaccessible to those responsible for distributing the assets of an estate, and thus inaccessible to family members and other beneficiaries.

Many Terms of Service or “user agreements” have provisions that could make the service inaccessible to others upon the death of the user. The RUFADAA provides that if a user’s estate planning documents, such as a will or trust agreement, specifically grants a fiduciary the power to access such digital assets, we’ve been told that such permission typically overrules the Terms of Service Agreement.

Even if a fiduciary or personal representative is allowed access, however, there are still rules governing the degree of access allowed. It should also be stated that under the Act, authority to access a digital asset is not to be construed as authority to make transactions with the underlying asset (such as money in a bank account).

Planning for Digital Assets

More and more digital assets are becoming an important part of estates for both financial and sentimental reasons. It is worth taking time to consider what digital assets you have, and what your intentions are for those assets. Here are some steps to help you get started:

  • Take an inventory of your digital assets. Keep a master list of such assets, including the name of the asset or provider (bank, Facebook, Google, etc.) and the username and/or password associated with it. Protect the list!
  • Make a note next to each asset in the list, or at least give some thought to which assets you want to grant third-party access and which you would rather keep private.
  • Consider speaking with an attorney about making revisions to your estate planning documents to account for pertinent digital assets.
  • Make a plan for storing the access information. You may consider bringing them together in a digital vault like the one we make available to our clients. Regardless of how you keep track of them, make sure the people appointed under a power of attorney, last will and testament, and other estate planning documents know which digital assets they are to access and how.

This  quip from comedian Jim Gaffigan proves more relevant with every upload or share on social media: “We used to have boxes of photos in our closets; now it’s just old computers.”

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Now is the time to figure out what tax reform did for you . . . or to you.

Here are two ways to do it.

Many people have asked us what the Tax Cuts and Jobs Act of 2017 (TCJA) will do to them or for them in this new year. News reports are suggesting that most of us will see changes to our paychecks starting in February. The IRS is working on a calculator to determine withholding under the new tables.  We believe that withholding adjustments are going to be necessary for many people in order to avoid surprises when you file your tax return for 2018.

You can gain a high level look at the differences in the old law and the new by comparing two FREE charts that we have obtained for you. The first is an annual Key Financial Data for 2018 and the other is the older version with 2017 data. To make the comparison easier, we have a prepared a way for you to get these two charts in one PDF.

Click here to download both charts.

Note that the tax rate schedules apply to “taxable income” that is the amount after adjustments, deductions, and exemptions.  But be aware that exemptions go away and are replaced by a higher standard deduction for 2018.  Taxable income was the amount on line 43 of form 1040 of prior years.

For a deeper dive into the impact of the new law, I recommend a detailed tax projection into 2018 and 2019 using the data from your 2016 or 2017 tax return and updated for expected changes to income and deductions.

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THE Talk 2.0

I had a conversation the other day with an acquaintance that reminded me that we are not getting any younger. This gentleman was sharing his experience caring for his grandmother in her later years. In the course of conversation, he remarked that despite the decline in her health and mental acuity, she never felt herself to be old. “In her mind,” he said, “she was still the young woman who joined the Army at the tail end of WWII. She would at times tell me that when she looked in the mirror, she didn’t recognize herself. She’d say, ‘who’s that old woman?’” I think many people of an advanced age would perhaps agree that, while getting older certainly can have some physical signs to accompany it, one doesn’t necessarily nor automatically feel old. I certainly don’t feel my age.

Many of today’s seniors are still very independent, both in body and in mind. The mindset that “I can always take care of myself” can make them reluctant to openly discuss their affairs—particularly their financial affairs—with their adult children. It isn’t an easy mental shift to think about needing assistance with anything, especially after so many years of being independent. Unfortunately, too many boomers are in denial about their own aging, or simply fail to plan for the eventualities that will come. At some point, issues of living to an advanced age will have to be addressed, and too many families struggle with managing a crisis that could have been averted.  When that happens, sub-optimal solutions become the norm.

Senior adulthood is simply another stage of life and can be filled with growth and opportunity. To take full advantage requires that we continue to envision and plan for our future. A book I recommend on the subject is The Other Talk: A Boomer’s Guide to Talking with Your Family About the Rest of Your Life.  It is based on the recollection of the often difficult first talk that we had, or didn’t, with our teenager about sex.

Now that the teenager is well into adulthood and we Boomers are moving into seniorhood, it’s time for The 2.0 Talk. I encourage every boomer to have the conversation with their adult children. While financial planning is an important topic when talking about the rest of your life, it is impacted by so many other questions: where to live, how to manage health concerns, and end of life wishes, just to name a few.  Whether you have a plan in place or haven’t yet given much thought to doing so, simply sitting down with your family and talking through your vision and purpose has its own rewards. It can very well lead to deeper, more meaningful, relationships between generations. The how and when and what will differ from family to family, and it might be awkward for some, not so for others. It probably isn’t the most natural after-dinner conversation, but setting aside time with loved ones and mustering the courage to do this is important. It is almost assured that it  becomes more urgent as time goes by.

The Other Talk doesn’t have to be a serious or morbid conversation, or even a long, detailed one. Just starting can make a difference and can open the room for other conversations. Being open to each other’s perspectives can be a step toward a fruitful discussion. You may not want to start off talking about what everyone will inherit when you are gone.  We have some discussion starters if you need them. You could start by sharing this blog post.

By the way, it is much easier when the parent initiates the conversation.  But the child can easily start the discussion with something like, “Hey mom, how do you want to be remembered when you’re no longer around?”

Scroll down and leave a comment on where you are on the topic and the questions that arise after you have read this post.