Important But Sometimes Unaddressed Estate Planning Issues – Certain estate planning subject matters seem not to get the attention they deserve and often go unaddressed. Let us discuss some overlooked areas that should be considered when drafting trusts, wills and powers of attorney.
“Digital Assets” is an all-encompassing term that includes on-line financial accounts, emails, blogs, and other stored electronic data (such as data stored in a “cloud” server). With more of people’s activities taking place on-line, over the Internet, the law is trying to catch up to the demands of the fast moving Digital Age. In September, 2016, California enacted the Revised Uniform Fiduciary Access to Digital Data Act (“UFADDA”). UFADDA is a multi-state approach to enacting uniform state legislation nationwide to allow fiduciaries (trustees, agents and executors) to obtain access and control over the management of a person’s digital assets and communications. Till now only federal legislation has addressed Digital Assets.
A person can authorize their trustee, agent, or executor of their estate (after they die) to have access and management over their digital assets and communications for the purpose of administering their estate. Given that that many people have documents that do not include any authorization, it may be beneficial for such persons to get up to date powers when they revise their estate planning.
Pets are valued companions who often don’t get their due when it comes time for estate planning. Planning for the care and placement of pets is authorized under existing law. Pet trusts and powers authorizing the owner’s resources to be used to pay for veterinary care and placement services when the owner is disabled or dies.
Dependent adult children who either live at home and/or receive financial support also need special consideration. Authorization for the trustee and power of attorney to continue to allow a child to live rent free in the parents’ home and to continue receiving financial support, in one form or another, should be considered when relevant.
Naming alternative death beneficiaries to inherit life insurance, annuities, and retirement plans are often overlooked. Even when the children are named as alternative beneficiaries to the surviving spouse consideration needs to be given to further alternatives in case a child predeceases the surviving spouse. Without planning unintended consequences such as the wrong beneficiary getting the deceased child’s share of a retirement plan or an otherwise unnecessary probate can result.
In long term marriages where each spouse leaves everything to the other spouse, it is often desirable to grant the surviving spouse the authority to change death beneficiaries on non probate assets that are community property assets. This can be done by each spouse using their wills to revoke their existing designated death beneficiary designations at death and also authorizing the surviving spouse to name new designated death beneficiaries for both halves of the community property assets. For example, whole life insurance on the life of the surviving spouse that was purchased while both spouses where still alive with marital earnings is such a community property asset. Otherwise, the surviving spouse can only change who inherits their half of the non probate community property asset.
Adequately addressing these and other important areas is a valid reason to review and, if necessary, update one’s existing estate planning documents. As a rule of thumb reviewing one’s estate planning every five years with a qualified Lake County estate planning attorney is a good practice.