Planning for the Future - Part II

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Beyond Wills

            Earlier we covered wills as a necessary legal document for ensuring that your personal effects are distributed as you intend after you pass. Beyond a will, there are a few other important estate planning issues you should consider.

 

 Non- Probate Assets

            Non-probate assets include entities like IRAs and pension plans. These will pass along to designated beneficiaries separately from the will. Remember to update your beneficiaries if any major life event occurs.

 Advanced Healthcare Directive

            Consider setting up an advanced healthcare directive in case you become incapacitated and others need to make difficult medical decisions on your behalf. This directive could designate another person to consent to your medical treatment, services, or procedures. This directive is also commonly used to designate someone to make end-of-life decisions for you if you are not able to do so. 

The Digital Estate

            The term "digital estate" refers to data that can be inherited; digital assets as opposed to physical ones (en.wikipedia.org/wiki/Digital_estate). One side of this issue is linked to the rise of Facebook and social networking sites. People have had to confront what happens to their online presence when they die. Would you want your Facebook account to die with you, or would you want it to continue on as an online memorial? If something happened to you, who would you entrust with your internet passwords? Would you want to entrust someone to announce your death to all of your online friends who may not have heard? For those with online lives, these are some important questions.

            The other side of this issue revolves around the Terms of Use clauses of certain websites and services that may specify what can and cannot be done with digital assets after death.  For instance, Terms of Use may affect the ability to transfer music files that a decedent purchased. Though one can devise an iPod to someone, it is less clear whether or not the music itself that has been purchased can be devised and transferred onto a different storage device.  There is currently a case winding its way through federal court right now that will likely affect this issue.

           At this time, only a few states have enacted laws with regard to digital estate planning, Maine not among them.  Thus, for the moment, this is a somewhat cloudy area of the law.  However, I expect an expansion of legislation over the next few years as problems will inevitably arise across the county.  In the meantime, one can prepare by taking a couple of simple steps.  First, make a list of all of the usernames and passwords that you have for any websites that you use and put this list in a secure location.  You may want to put the list a safety deposit box; though if you change your passwords frequently, updating the list could become a hassle.  Second, the preparation of your will should specifically direct what is to be done with your digital estate. 

Erik M.P. Black