ESTATE & PREPLANNING GUIDE MAY 01. 2016
PAGE 2
THE COURIER
ESTATE PLANNING
www.wcfcourier.com
MAY 1, 2016
GETTING STARTED
Getting your affairs in order ahead of your consultation ensures a smooth introduction and time-efficient discussions. DOCUMENTATION
The first step in preparing for your attorney is gathering all pertinent documentation materials. The more time you spend on this task now, the quicker your attorney will be able to sort and reference them. Locate and organize all your financial statements for retirement, investment and personal accounts. If you have one, locate your will, as well as any other documents that show the value of your home and business. It also is helpful to make a complete list of your assets and liabilities. This will save time for both you and your attorney. Your list should include what you own, including financial accounts, real estate and life insurance. Don’t
STEVE KNAPP, Lockard Realty Steve, a lifelong resident, has been a real estate broker and professional manager since 1973. He uses his expertise to assist clients in real estate transactions in residential homes, commercial and investment properties, development, or property management.
Steve is managing broker of the leading residential and commercial brokerage firm and is consistently a leading buyer and seller agent. He has served on several local boards of directors in the last 25 years, and as a WaterlooCedar Falls Board of Realtors officer and director. sknapp@lockardonline.com
“Producing Successful Results” “Steve would call with regular updates and would return our calls quickly. We called him because our son was so happy with him when he bought his home years ago. He’s the best!” - C.D.
493-4000 Steve Knapp Managing Broker
4501 Prairie Parkway, Cedar Falls 50613
Preserve Your Wealth | For Future Generations Wealth Management & Trust www.communitybt.com
forget to list how you own the assets. For example: sole name or in joint names with your spouse, friends or family members. Put together this type of information in an organized, cohesive manner. Your attorney will thank you. INHERITANCE QUESTIONS
One of the biggest things to prepare for ahead of your attorney visit is determining who will inherit your estate after you die. This can be a tough decision — and one that actually intimidates many people into delaying the development of a solid estate plan. Here are a couple of key questions your attorney might ask you in regards to your inheritance. Again, preparation is key to make sure you maximize your time with your lawyer: Who do you want to inherit your estate? Consider all your items and family members who may be interested in inheriting them. Maybe you want your son to have your house and your daughter to have the bulk of your savings account. This decision is entirely up to you and, depending on your family dynamic, can be simplified through honest conversations. When would you like them to inherit property? This is another interesting question that has a lot of flexibility. You can pass on your properties to your beneficiaries outright or in stages. For gradual payments, you can distribute them to a grandchild after they get married or to one of your siblings at other specific milestones. This is another choice that is entirely up to you and can require some creative planning. ■
MAY 1, 2016
www.wcfcourier.com
ESTATE PLANNING
PAGE 3
THE COURIER
ESTATE PLANNING FOR YOUR DIGITAL ASSETS Have you addressed this issue?
Provided by Pete Meehan/Financial Decisions Group Social media and email accounts. Creative works, photos and keepsakes kept on home computers, the cloud or external storage drives. E-commerce accounts. Domain names. Bitcoin. These are all examples of digital assets. You will manage them closely as long as you live – but what will happen to them once you die?
handles accounts of the deceased in similar fashion, and it can also remove images in a person’s account per request; the Twitter account is frozen at death, with access barred even to immediate family.4,5
Have you talked about it with those you love? In a recent survey of baby boomers, antivirus software provider AVG Technologies found that only 16% of respondents had thought about what would happen to their digital assets after their deaths. A mere 3% had alerted or prepared their loved ones in regard to this issue.1
Computer files. Your executor or trustee should be provided with the location of your computers, tablets or e-readers after your death and the passwords to them if you have set password protection. Locating backups may also become crucial. Remember that annual fees for antivirus programs and website hosting may no longer need to be paid; the executor or trustee will need to be informed about those user agreements.
If you have a will or a revocable trust, you must plan for the transfer and/or administration of digital assets just as you have for tangible assets. Your digital assets may or may not be of great financial value, but they need protection against exploitation as well as abandonment.
E-commerce accounts. Most of us have eBay, iTunes or PayPal accounts, all with monetary value (with a PayPal account, the value may reach into the five-figure range). Moreover, these accounts can serve as pathways toward our banking and credit card information.
Distributing digital assets is part of fiduciary duty. That is what makes articulating your wishes so important. A financial professional or financial firm acting in a fiduciary role on your behalf has an obligation to distribute your digital assets – but many social media and e-commerce websites will not readily allow this without the permission given by the user or his or her heirs.2
What if your idle e-commerce account is hacked after your death? What if the account balance is drained or the cybercriminal uses the account to go on a shopping spree? What if your username and password could be stolen and used at other websites you have accessed? These what-ifs need to be considered – and addressed during your lifetime and in your estate plan.
How about social media & email accounts? Facebook has a legacy contact feature for its users. You can appoint a custodian for your page after you are gone: your legacy contact will be able to respond to friend requests, change your cover photo and profile picture, and write a notice of your memorial service or funeral; he or she will not be permitted to log in with your password or username, read messages sent to you or modify your account settings. Alternately, you can simply tell Facebook that you would like to have your account immediately deleted at your death. Google has an Inactive Account Manager option that will let you leave instructions for what should be done with your Google Drive docs or Gmail account once you are deceased.3
Domain names. How can you keep a website going after you die? One way is to pay for a decade (or more) of hosting or domain name ownership with such URL longevity in mind, and letting your trustee or executor know just how to renew the agreement. Only that trustee or executor should have access to that knowledge – unless you want business partners or a future owner to know how the arrangements work.
Bitcoin. You can create a copy of your Bitcoin wallet file for a trusted beneficiary, or arrange Bitcoin transfer to your beneficiary dependent on multiple signatures or the signature of an oracle server, or at a specific date. Or, a wallet file may be divided into component pieces for different heirs, with the heirs having to unite the components to As for LinkedIn, a loved one fills out an online form the Bitcoin wallet.6 form on behalf of the deceased, which is reviewed by LinkedIn pursuant to getting in touch with that Does your will or trust need amending? person. The notifying party will need to supply Language regarding your digital assets is your name, profile URL, email address and date essential. At the very least, you want to tell your of death plus information on the company you executor or trustee where digital assets are last worked for and a link to your obituary. Twitter stored. Even better, the amendment should give
Jesse Meehan Investment Advisor Representative Specializing In: • Estate Planning • Retirement Planning • Life Insurance • Long Term Care Insurance
800-262-0159 | www.fdg.net 3013 Greyhound Drive, Waterloo, IA 50701
Neil Wilkinson Investment Advisor Representative
Specializing In: • Corporate Planning • Business Planning • Estate Planning
319-283-1514 | www.fdg.net 903 N. Frederick Ave., Oelwein, IA 50662 Investment Advisor Representative with and Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. (TFA) Member FINRA, SIPC and registered Investment Advisor. Non-securities products and services are not offered through TFA. TFA and Financial Decisions Group are not affiliated LD045692-04/16
your executor or trustee the authority to administer, archive, alter or destroy digital assets in addition to the power to direct them to heirs or other named beneficiaries. That means turning over your online passwords to your executor or trustee at your death, or having them access password management software used to create them. Pete Meehan may be reached at (319) 233-8476, pmeehan@fdg.net, or www.fdg.net ■
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
PAGE 4
THE COURIER
ESTATE PLANNING
www.wcfcourier.com
MAY 1, 2016
Power of Attorney
Choosing your power of attorney is one of the most important decisions in the estate planning process. The objective of the power of attorney is to give one or more people the power to act on your behalf as your agent. This power may be limited to a particular activity, such as paying off your debts. It also can be a general declaration of tasks. It is important to work closely with an estate planning attorney during the process of establishing and enacting a power of attorney. That’s because while accepted in all states, the rules and requirements differ across state lines. DETERMINING A TIMELINE
You have two options when setting up the time frame for authority of a power of attorney: temporary or permanent. You may opt to let your power of attorney take over your estate planning decisions immediately or upon the occurrence of a fu-
ture event. Cover this critical decision with your attorney, who will be able to walk you through the pros and cons of both. Obviously, it’s best to put a structure in place that allows the power to shift hands if you are unable to act for yourself in the event of a mental or physical disability. MAKING THE DECISION YOURSELF Pre-planning is crucial to making sure your estate is divvied up the way you want after your death. If you do not have a power of attorney and become unable to manage your personal or business affairs, it may fall on a local court to appoint one
or more people to act on your behalf. If a court proceeding is needed, you may not have the ability to choose the person who will act for you. Be proactive to create the appropriate document that spells this information out and you’ll ensure greater security for the future of your family. Choosing your agent is a difficult decision. The majority of people choose a family member to act on their behalf when the time comes — usually their spouse or children. You can choose multiple people to act in your best interests, but recognize that they may not always agree on decisions. It’s important to detail your wishes as clearly as possible to clear up any potential arguments.
Lincoln Savings Bank is Proud to Congratulate Our Very Own Julie Versluis! Julie Versluis, CTFA® Vice President Trust Officer
Member FDIC
Our Trust team is made up of the top industry leaders when it comes to estate planning. Julie Versluis has earned a prestigious placement onto the Black Hawk County Estate Planning Council. We are so proud to have you at Lincoln Saving Bank!
Lincoln Savings Bank
Lincoln SAVINGS BANK
www.MyLSB.com