United States: Inconceivable Changes In Estate Planning

Originally published in Anderson Kill & Olick , P.C.'s Estate Planning & Tax Advisory, Volume 12 Number 1, Spring 2013

I have been a licensed, practicing lawyer since 1980. Add to that the time that I spent as a law clerk while in law school, and the result is that I have been involved in trusts and estates and tax law for about 35 years.

Of course, it should come as no surprise that tax laws change. When I was in law school, the estate tax marital deduction for assets left between spouses could not exceed one-half of the adjusted gross estate. Now, and for more than 30 years, the estate tax marital deduction is unlimited. But there have been many, many non-tax changes, some the result of changing social attitudes, and some the result of technological and medical advancements that few could have foreseen. Those changes have an impact on estate planning. As I often tell my clients when we make provisions in wills and trust instruments for the possibility that they, their children and grandchildren may all perish together, part of my function is to have clients think about the unthinkable, and so I want to share with you some of those changes in the estate planning landscape. The changes may or may not be relevant to your present situation, but the scenarios should be considered by all, and addressed where applicable.

Digital Assets

Computers, smartphones and the like have become ubiquitous. So, too, are digital assets that are registered to an owner in a digital file stored either on a device that belongs to the owner (i.e., stored locally, as on a computer's hard drive) or elsewhere on devices accessed by contract and stored online ("in the cloud") at various websites. Today, there are assets and records that exist only online, including bank and investment accounts, book entry shares of stocks, credit accounts, PayPal accounts, tax records and returns, airline mileage accounts, insurance policies, medical records and extensive libraries of books, movies, music and photos. We may have successful blogs with many followers, and those lists of followers may have value.

What's more, access to the various digital assets may be denied to our executors after we die — even if they know the assets exist — because they do not know our passwords, or because Gmail, Yahoo!, Facebook and the like all have different rules for accessing the contents of a deceased owner's account. Password-protected assets, if survivors or executors don't know the passwords, are worse than finding a padlocked box or storage unit in earlier times when we lacked the key or the combination. In the old days, we could simply get a lock cutter or locksmith and cut or break the lock. Locating an unknown username and/or password is much more difficult.

Digital assets should be discussed as part of the estate planning process, both to make sure that their existence, usernames and passwords are known, as well as to address who will be the beneficiary of that treasure trove of photos or extensive music collection. Although a computer itself is tangible personal property, if your collection of digital photos is stored on the hard drive of that computer, or if you are a music composer whose compositions are on your computer, is it your intention that the person to whom you leave the computer as an item of tangible personal property is also the person who is to inherit its valuable contents?

Children Conceived After Death

It used to be so simple. A child was born during the lifetime of both parents, or perhaps the child had been conceived during the father's lifetime (so that the mother was already pregnant at the time of the father's death) but was not born until the father had died. Now, we have the ability to freeze sperm, eggs and even embryos, artificially inseminate using the sperm of the husband or of a donor, transplant embryos to surrogate mothers, etc.

These medical advances have raised many legal issues, such as whether one's genetic material can be the subject of a gift or bequest for use at a later time to create a child, the legal status of such a child, and whether he or she is to inherit from the parents or the parents' ancestors (and, indeed, confusion and uncertainty over who are the parents). Also related are the rights of such children conceived after the death of a parent to enjoy Social Security survivor benefits or to share in wrongful death proceeds.

The law is slowly developing answers to these questions. The important lesson to be learned is that the concept of "family" has undergone profound changes. In planning one's estate, the possibility of so-called posthumously conceived heirs should be considered.

Same Sex Marriages

"Marriage" is no longer limited to the union of a man and a woman — at least not in the nine states and the District of Columbia that allow same-sex couples to be wed within their borders, and to have all the rights and responsibilities of heterosexual couples. The federal government still has the Defense of Marriage Act on its books, although the U.S. Supreme Court has agreed to hear a case questioning the Act's constitutionality.

Where wills and trust agreements make generic references to the spouse of a person as a beneficiary, if a same-sex spouse (present or future) is not to be included, the governing instrument should be clear in defining what is meant. This caveat also applies in defining what is meant when referring to the descendants of a beneficiary.

Clearly, the times are changing. While the law has not always kept up, well thought out estate plans can attempt to fill in the gaps.

Helpful Tip: The inability to locate passwords after death is a real and growing problem. Indeed, with many websites requiring us to change our passwords periodically, many of us can't remember all our passwords. Records of passwords should be updated regularly, whether on paper, flash drives or through "digital estate services" that permit individuals to manage their passwords securely online. In this way, executors and other survivors won't be forced to hunt for them.

Abbe I. Herbst is a shareholder in the New York office of Anderson Kill & Olick, P.C. Ms. Herbst is admitted to practice in New York and New Jersey, and has broad experience in the areas of estate and tax planning and trust and estate administration. She is a member of numerous bar associations and the Financial Women's Association of New York.

About Anderson Kill & Olick, P.C.

Anderson Kill practices law in the areas of Insurance Recovery, Commercial Litigation, Environmental Law, Estate, Trusts and Tax Services, Corporate and Securities, Antitrust, Bankruptcy, Real Estate and Construction, Anti-Counterfeiting, Employment and Labor Law, Captives, Intellectual Property, Corporate Tax, Health Reform and International Business. Recognized nationwide by Chambers USA for Client Service and Commercial Awareness, and best-known for its work in insurance recovery, the firm represents policyholders only in insurance coverage disputes – with no ties to insurance companies and has no conflicts of interest. Clients include Fortune 1000 companies, small and medium-sized businesses, governmental entities, and nonprofits as well as personal estates. Based in New York City, the firm also has offices in Ventura, CA, Stamford, CT, Washington, DC, Newark, NJ and Philadelphia, PA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions