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When major life events like marriage and divorce occur, it is a wise idea to review your estate plan. That’s because these life events have the potential to significantly change a person’s estate plan.
The purpose of this article is to review some key factors that you should consider about estate planning when you recently got married or divorced.
Estate Planning Issues Following Marriage
In this post we will discuss why digital assets should be incorporated in the estate planning process just as you incorporate all of your physical assets. We will also explore what are some of the initial steps to take when formulating an estate plan with digital assets.
Step One: Understand what a digital asset is
A digital asset is an electronic record in which an individual has a right or an interest. The definition is broad and includes financial accounts, music files, electronic communications, cryptocurrencies, videos, and photographs, among many others. In order to dispose of these items, like the physical items in your home or that you have accumulated during your life you will need to know which of your assets are digital or electronic in nature.
After creating an estate plan, it is easy to fall into the trap of thinking that you have now done everything necessary to plan for the future. In many cases, however, people fail to make sure that all beneficiary designations as well as assets are titled in a way to reflect your plans.
It is critical to make sure that these assets are properly titled because when people die, they often have two types of estates: those that must be probated as well as “non-probate” assets.
Not Everything Passes through a Will
Estates lawyers are increasingly asked to help surviving family’s members locate cryptocurrencies because their loved one collected them during their lifetime, didn’t include it in their will or updated will, and now no one can find it. Planning for cryptocurrency is more complex than digital asset planning. For starters, cryptocurrency has no physical equivalent. Cryptocurrency were created online, are exchanged online, and are stored online.
Blockchain Technology
The first step to understanding cryptocurrency is to examine blockchain technology. Bitcoin and many other digital currencies or cryptocurrencies utilize blockchain technology to record transactions between parties efficiently, in a transparent and verifiable manner. Blockchain technology is a digital database containing information (no records, financial statements, or other types of data) that can be simultaneously used and shared within a large decentralized and publicly accessible network without any central authority. The entire enterprise is decentralized meaning no government or financial bank or company can revoke an account on a blockchain network, shut down the network, or prevent someone from using it.
Three people in Ohio were recently convicted on multiple charges related to a scheme associated with creating and probating a fake will that left the entirety of a $2.2 million estate to a beneficiary and revoked an earlier will the deceased person had executed in 1993. In an additional twist, the person who forged the deceased individual’s signature on the fraudulent will acted as a government information after his request for $50,000 to remain silent was denied.
This plot was discovered following a series of 171 withdrawals for less than $10,000 which caught the attention of the Internal Revenue Service. A trial resulted which saw forensic witnesses who examined the signature on the will. As a result of this conviction, the three individuals will not face jail time.
The Overwhelming Rate at which Estate Planning Fraud Occurs
Many investors focus on amassing as large a savings as possible, but some also want to create an estate plans to make sure that these assets are passed on to loved ones.
By following some proven strategies, it is possible to reduce the amount of associated estate taxes. The biggest mistake that investors make when estate planning is failing to understand the rules. If accounts are not properly created, there are a number of unwanted events that can occur.
As a result, if you are an investor who is interested in passing on your assets, you should make sure to follow the recommended tips below.
This post provides an overview of digital assets by defining what a digital asset is and why digital asset planning is so important during the estate planning process.
Digital asset defined
A digital asset is an electronic record in which an individual has a right or an interest. Presently, the term digital asset, does not include the underlying asset or liability unless that asset or liability is itself an electronic record.
The Michigan Supreme Court recently decided the case of Hegadorn v. Dept. of Human Services, which involves the Medicaid spend down process.
A “spend down” in this context refers to the process of reducing the assets of a person applying for Medicaid so the individual qualifies for Title XIX Medicaid coverage. Spend down also refers to reducing a Medicaid applicant’s monthly income so a person’s income makes them eligible for Medicaid.
How the Three Cases in Hegadorn Arose
It’s understandable that people avoid estate planning. Plotting for what happens after we die can be a scary and uncomfortable thought process.
To make sure that you receive the best care possible and that your loved ones receive assets from your estate, however, it is critical to create an estate plan that will be able to successfully carry out your wishes.
To avoid having to perform estate planning, there are a number of lies that people tell about themselves. By understanding the truth behind these lies, it is possible to greatly increase your chances of making the estate planning process as successful as possible.
As estate planning attorneys, we often meet prospective clients who understand the benefits of making a will and why it needs to be part of their estate plan. Their initial interest in a consultation is understanding the mechanics of the process – how is a will actually prepared. There are many do-it-yourself will forms available for sale in the office products section of many retailers and online. The problem with these options is that they do not offer legal advice related to how you should prepare your will. Because these options try to create a one-size fits all document, if your property or assets don’t fit within one of the categories, you are back to square one trying to understand how your will should be prepared.
A will is the legal method to gift heirs, friends, staff, and institutions upon your death. You will have to decide what property or asset to gift and to whom. As the world becomes more digital it is important to understand what a digital asset is and know whether it can be gifted or bequeathed in a will. Here, is what you need to know about making will gifts.
Four types of will gifts
New York Estate Planning & Elder Law Blog