New York Estate Planning Lawyer Blog

Upon visiting an estate planning lawyer for the first time and learning about available options, many are surprised at the flexibility of different legal tools involved in the transfer of property. Far from simply doling out assets to specific friends and family members, one has immense control in deciding how those assets are used, when they are received, and what can trigger the loss of those assets. In this way, unique plans can be crafty which account for any number of family dynamics--multiple marriages, concerns about ex-spouses, children with special needs, relatives with poor money management skills, and more.

Similarly, the same flexibility often exists with gifts to charity. Many New Yorkers decide to share part of their assets with favorite non-profit causes. Those gifts can be one-time transfers or they may involve the creation of trusts for use in specific ways. For example, one of the most common charitable trusts involves setting up a scholarship fund to an alma mater to benefit future students. The trust may be funded with various assets, growing over the years and helping countless students.

Those creating these trusts can set many different terms on the gifts. Perhaps you'd like the funds to be used solely for those interested in pursuing nursing or for those who came from a certain disadvantaged background. In most cases, an attorney can help craft the legal arrangement so that your exact wishes are carried out.

The flexibility of trust details is vividly displayed in a story about an old scholarship trust that a university is hoping to modify. As discussed in The Chronicle, Columbia University asked a court to alter the terms of a trust that come with rigid requirements for those who benefit from it. Specifically, students who receive the "Lydia C. Roberts" Graduate Fellowship are required to have been born in Iowa and attended a Iowa undergraduate school. They must also move back to Iowa for at least two years after their graduation. In addition, they cannot pursue law, medicine, dentistry, veterinary surgery, or theology. Most egregiously, the trust--created in 1920--specifies that the recipients of the scholarship must be "from the Caucasian race."

Of course, this is a blatantly discriminatory requirement--a product of its time. That is why the University is seeking to have the race requirement thrown out by the court. While no one can support discrimination in this way, the fact that the university is still forced to seek court approval to modify the terms--nearly 100 years after the trust was created--is a testament to the extreme power of these legal tools. They allow individuals to exert significant control over their assets even a century down the road.

The New York Times published a story last week that reminds residents of the complexity of many estate planning matters. The story reiterates two key principles when it comes to long-term financial and inheritance planning: (1) It is a critical task for families of all income levels; (2) It requires frequent pruning and updating.

Not a Problem for the Wealthy
There remains a misconception that estate planning is a concern only for the wealthy. If one does not have assets over the $5.25 million federal estate tax exemption level, then there is no need to worry about visiting an attorney or otherwise handling this inheritance details, right? As we often point out: this is a huge misconception. The truth is that estate planning deals with a wide-range of issues beyond the estate tax. From ensuring proper designation of life insurance policies and retirement accounts to using trusts to avoid probate and save on expenses, properly planning for transfer of assets is necessary for families of all income levels.

Consider one of the most common problems: a will that contradicts provisions in beneficiary designation forms. Many New York families find themselves in sticky situations when someone creates a will that leaves provisions to one family member, even though the name on a beneficiary designation form for a retirement account or life insurance leaves it to someone else. In those cases, the will is overridden, even if it represents the true desire of the benefactor.

Not a "One Time" Task
Similarly, because of changes in the law and life circumstances, estate planning cannot be viewed as a chore that is finalized once completed. Instead, it must be a frequently updated process, with alterations to those beneficiary designations, will provisions, trust assets, and more. Understanding when a part of the plan needs to be updated is where professionals like an estate planning attorney are vital. These details are complex and serious enough that they should not be left to those unfamiliar with how it all works.

Obviously the birth of new children or grandchildren, a divorce, marriage, acquisition of a new asset, or other change in condition must be folded into an existing plan. In addition, many different legal changes may influence what options are available and when. Those legal changes go well beyond the estate tax, which seems to generate all the media attention. Many different kinds of tax rules can shift at any time, including types of available trusts, extent of charitable deductions, and more.

Celebrity estate planning complications and feuds are often used to illustrate basic planning principles or common problems. Perhaps none of those examples are as well-known, especially for New Yorkers, as the sad case of the estate of Brooke Astor. The legendary socialite and philanthropist died several years ago. Since her passing, a wide-range of claims were made regarding the distribution of her assets and criminal activity on the part of those responsible for her care and affairs in the later years of her life.

Astor reportedly suffered from Alzheimer's at the end of her life--an affliction that similarly affects many New York seniors. Unfortunately, also like many others, it seems that her condition was abused by the very people who were supposed to look-out for her.

Astor's son, Brooke Marshall, was criminally charged with exploiting his mother to funnel more money to himself. Marshall was ultimately convicted, along with a co-defendant, of illegally giving himself a $2 million "raise" to administer the estate. Claims also suggested that an amendment to Astor's will in 2004 included a forged signature.

The criminal conviction actually came more than three years ago, when the pair was sentenced to serve between one to three years in jail for their conduct. However, they have yet to serve a day as various appeals are worked out.

As reported by the New York Post, Marshall was in court again a week ago. The Manhattan Supreme Court justice handling the matter allowed Marshall to remain out on bail while his final appeal request to the highest court in the state--New York's Court of Appeals--is considered. If the Court decides not to hear the case, then Marshall and his co-defendant will be completely out of options and likely report to jail in mid-June. That would mark the end to the most drawn-out, contentious, high-profile inheritance controversy in recent New York memory.

Seamless Estate Planning
While most may not have the wealth of Brooke Astor, the other dynamics of the situation are the same for many: declining health, disagreement among children about inheritance amounts, pressure from in-laws, last-minute will changes, and more.

The general lessons are myriad. Be sure to seek out the help of legal professionals with a reputation for honest dealing and whom you trust. Be forthright about various family dynamics that may come into play in the aftermath, even if it involves difficult conversations about family members. Do not delay, as one's health is never certain.

By following these basic principles, one can be in the best position to ensure an inheritance is handled efficiently and exactly as one wishes

Last week we discussed the release of President Obama's proposed budget. For estate planning purposes, one of the most obvious red flags in that proposal was a call for yet another edit to the federal estate tax. The President wants to raise the tax rate and lower the exemption level again, altering what was some thought was a more permanent fix agreed upon in the law passed in January.

But the estate tax is not the only aspect of the budget proposal which might affect long-term planning for New York residents. For example, the President is also calling for changes to how charitable contributions implicate tax matters. The possible change is being suggested in an attempt to increase tax revenues to plug budget holes.

The Future of Charitable Deductions
As discussed in a Forbes story, the proposal calls for a reduction in the value of charitable tax deductions. This is an idea that is not new, as the Administration has been calling for it for several years. The change would reduce from 35% to 28% the amount of any charitable deduction that can be taken for tax purposes.

Critics of the idea have been quick to pounce, one noted: "The White House proposal would raise the cost of giving to charity from 60 cents per dollar to 72 cents per dollar. That's a 20 percent increase in what can be called the 'charity tax.'" Some point to studies which indicate that anywhere from $2-$9 billion in fewer charitable contributions will be made each year as a result in the tax deduction shift.

Opponents of this shift also contend that the charitable tax deduction is unlike similar tools which may rightly affect only the affluent. For example, deductions can be taken for home interest mortgage payments. That deduction obviously benefits those with expensive homes more than those with smaller homes. In the same way, the charitable deduction benefits those capable of donating the largest sums more than those who are only able to give a little. But, there is a big difference between using taxes to incentivize the purchase of a large home versus using it to incentivize charitable giving.

As with the estate tax proposal, it is important to remember that many ideas in these budgets are merely opening salvos in negotiations--nothing is certain. But it is important for New York residents to be aware of this possibility and talk with an estate planning lawyer and financial advisers to see if it alters the feasibility of any long-term plan.

Last week we discussed the release of President Obama's proposed budget. For estate planning purposes, one of the most obvious red flags in that proposal was a call for yet another edit to the federal estate tax. The President wants to raise the tax rate and lower the exemption level again, altering what was some thought was a more permanent fix agreed upon in the law passed in January.

But the estate tax is not the only aspect of the budget proposal which might affect long-term planning for New York residents. For example, the President is also calling for changes to how charitable contributions implicate tax matters. The possible change is being suggested in an attempt to increase tax revenues to plug budget holes.

The Future of Charitable Deductions
As discussed in a Forbes story, the proposal calls for a reduction in the value of charitable tax deductions. This is an idea that is not new, as the Administration has been calling for it for several years. The change would reduce from 35% to 28% the amount of any charitable deduction that can be taken for tax purposes.

Critics of the idea have been quick to pounce, one noted: "The White House proposal would raise the cost of giving to charity from 60 cents per dollar to 72 cents per dollar. That's a 20 percent increase in what can be called the 'charity tax.'" Some point to studies which indicate that anywhere from $2-$9 billion in fewer charitable contributions will be made each year as a result in the tax deduction shift.

Opponents of this shift also contend that the charitable tax deduction is unlike similar tools which may rightly affect only the affluent. For example, deductions can be taken for home interest mortgage payments. That deduction obviously benefits those with expensive homes more than those with smaller homes. In the same way, the charitable deduction benefits those capable of donating the largest sums more than those who are only able to give a little. But, there is a big difference between using taxes to incentivize the purchase of a large home versus using it to incentivize charitable giving.

As with the estate tax proposal, it is important to remember that many ideas in these budgets are merely opening salvos in negotiations--nothing is certain. But it is important for New York residents to be aware of this possibility and talk with an estate planning lawyer and financial advisers to see if it alters the feasibility of any long-term plan.

Last week is already being referred to as one of the most important in the history of the equality movement for gay and lesbian couples. That is because, as all news outlets reported on significantly, the U.S. Supreme Court heard two cases related to marriage rights for same sex couples. We have discussed these cases frequently over the last few months, one of them deals with the federal law known as the "Defense of Marriage Act" (DOMA) and the other involves a state referendum in California known as Proposition 8.

For New York estate planning purposes, the DOMA case has very obvious ramifications. The very plaintiff in the case is a New York resident (Edith Windsor) who is suing in her capacity as executor of her later partner's estate (Thea Spyer). Windsor and Spyer were married in Canada and that relationship was legally recognized in New York. However, because of DOMA, the federal government did not recognize the marriage. The divergent recognition of the couple's relationship was not merely a symbolic difference, it had very real legal impacts. Specifically, Ms. Windsor was forced to pay over $360,000 in estate taxes to the federal government that she otherwise would not have paid if her relationship to Spyer was recognized. It is a pretty cut-and-dry demonstration of how same sex couples are impacted because of a lack of federal recognition of their marriage.

Obviously, the Supreme Court's ultimate determination of the constitutionality of the challenged portion of DOMA will affect the planning of same sex couples.

What will they decide?

Some "court watchers" have made a career out of making predictions about how the U.S. Supreme Court will rule on any given matter based on the questions that the judges pose to attorneys during the hearing. However, it is critical to concede that those questions are hard to judge, and any predictions be taken with a grain of salt.

However, that being the case, there was a clear consensus among pundits about what the hearings suggest about how each Justice is leaning. All told, the justices spent a considerable time discussing the issue of "standing." This refers to whether the group defending the law was the proper party to defend it.. In the DOMA case this is a group of House Republicans referred to a BLAG. Usually these laws are defended by the U.S. Justice Department, but the Attorney General and the President have stated that they believe DOMA is unconstitutional and have refused to defend it. If the Court decides that BLAG does not have standing then essentially they will not reach a judgement about the law itself, and a lower court ruling will stand--the lower court ruling found DOMA to be unconstitutional.

If they determine that BLAG does have standing, then they will actually weigh in on whether DOMA comports with constitutional Equal Protection requirements. Most observers are skeptical that, if the Court reaches the merits, they will keep DOMA in place. The 4 "liberal" justices as well as moderate Justice Kennedy all seemed very concerned about the equal protection issues of excluding same sex couples for federal purposes during questioning.

Ultimately, we won't know anything for certain until late June when the Court will likely release its opinion. It is important for all local families who may be impacted by this decision to keep abreast of the ruling and to visit with their estate planning attorney for guidance on how any ruling may affect their own affairs.

Nothing about the law is every entirely static. Obviously legal rules and principles change over time. However, some practice areas are far more stable than others. For example, the general process to recover for personal injuries in a car accident are roughly the same now as in the past. At the other end of the spectrum, certain estate planning processes can change virtually every year. That is because much of this planning is centered on tax savings. In that way, it mirrors applicable tax rules, and any change in those rules requires changes in estate planning details.

Possible Changes
For example, consider the estate planning changes that may need to be made if the latest presidential budget proposals are enacted. Financial One recently shared information on those possible alterations. The President's proposed 2013 budget includes some so-called "tax loophole" closings which may alter what planners do for future clients.

For one thing, "grantor annuity trusts" (GRATs) would be curtailed under the latest proposals. GRAT are often helpful in eliminating the gift tax costs of transferring assets to others. This works by creating a trust that is funded with an asset that will appreciate in value. The grantor retains the right to annuity interest for a set number of years with the remaining assets transferred to beneficiaries so long as the grantor is still alive.

As in now stands grantors can set up GRATs while collecting interest for as little as two years. However, the latest proposals would add risk into the mix by having a minimum of a ten year term with maximum life expectancy of annuitant plus ten years.

In addition, dynasty trusts may be affected by the President's proposed budget. The story explains how these trusts are often used to transfer assets throughout generations without gift or estate tax penalties. However, the latest proposals would cap those benefits at 90 years, potentially limiting the value of the trust.

Importantly, these possible changes are not guaranteed. As with so many of these issues in recent years, everything ultimately depends on how the executive and legislative branches are able to hammer out any sort of compromise. At this point it is mostly a guessing game as to what will or will not make it into law.

Of course there is little that individual community members can do to influence these decisions. But at the very least it is important to be aware of potential changes and work with an estate planning attorney to understand what decisions are smart now in anticipation of possible changes in the future.

Infighting over control of family assets is far from uncommon no matter the value of the holdings. History is replete with examples of siblings, step-relatives, and other engaged in estate battles over property that has little to no value. Of course, that is not to say that the possibility a disagreement increases with the value of the property. Things can get especially sticky when things like family businesses, land holdings, and other tangible and valuable items are at issue. Many of these assets may have been within a family for decades (or generations) and fighting over control is quite predictable, especially when estate planning is inadequate.

For example, the Wealth Strategist Journal reported recently on the battled over control of supposedly the largest underground series of caves in the eastern United States--Luray Caverns. The caverns are incredibly popular, and it is reportedly the third most visited cave in the country. Considering its popularity, the location has grown into a significant business for the family which owns it. A Washington Post story notes how the cave has been open to the public for nearly 130 years. At $24 for a one-hour tour, the business of showing the cave is estimated to bring in about $30 million annually.

Unfortunately, control over the caverns is apparently is disarray as the family in charge seems perpetually mired in controversy. The Post story explains how two of the family siblings recently sued two others in an attempt to disqualify them for participating in a family trust. In total, control of the caverns rests with six children bore of a family patriarch who died in 2010 at the age of 87.

The disputes are varied, including disagreements about managements of the operations and claims of unfair "golden parachute" retirement packages. On top of that, the parents had "no contest" clauses in their wills (added secretly late in life) which theoretically disinherit any beneficiary who challenges the terms of the will. That no contest clause is what has spurred the most recent litigation.

Many have pointed to the situation as a textbook example of how things can go awry quickly with largest families and complex assets. One observers explained, "Family businesses can be quite successful, he said, but the managing and intermingling of blood and commerce, insiders and outsiders, requires a deft hand, planning and enormous amounts of trust."

As in this case, parents are often able to keep rivalry and infighting in check while still alive. But all of that often comes apart after a passing. Without incredibly clear, unambiguous, and open estate planning, sibling discord can explode when parents are gone.

It is not everyday that important retirement and estate planning issues make their way into popular entertainment drama. One of the few exceptions was the movie "The Descendants" a few years ago which garnered widespread acclaim--and some Oscar awards--in a tale focused on a man who unexpectedly comes into control of vast land holdings in trust following his wife's surprising death. The main character, played by George Clooney, is forced to grapple with a range of issue while dealing with feuding in-laws and uncertainty about his wife's wishes.

One of the other exceptions is the massively-popular British drama Downton Abbey. The BBC program has been running for several seasons, with the most recent batch of episodes just finishing to high rating here in the United States. The story is set over the course of several years in the first part of the 20th Century, including the first World War and the decade or so afterward.

Much of the drama revolves around one family living off "old wealth" and the challenges presented in maintaining a large estate and transitioning for its transfer to another generation. Recently, a Wall Street Journal article offered an interesting take on some estate planning lessons that viewers can glean from the ups and downs depicted in the show surrounding the inheritance drama.

For example, one key problem is the challenge of maintaining a significant amount of wealth in a large home. The family in Downton Abbey engages in a range of struggles all in an effort to keep the large estate in the family. In reality, it is often far easier to simply sell a home and distribute cash instead of being burdened by the exigencies of maintaining an unwanted piece of real estate.

Another lesson is the value of dynasty trusts. In the show, the patriarch of the home pour vast holding in one bad investment and risks the entire family fortune. If that fortune had been handed down with certain limitations, perhaps via a dynasty trust, then the danger of massive loss to creditors or mismanagement may be limited.

Of course, most New Yorkers do not have the wealth of the Crawley family in Downton Abbey. Yet, the basic lessons in the show hold true to the present day and apply to families of varying asset levels. Diversify holding, protecting against sudden illness, guarding against ramifications following divorce, remaining flexible with asset allocation, and many other issues in the show are faced everyday by local families. For help navigating these somewhat confusing legal and financial waters, please contact the New York estate planning attorneys at our firm for tailored guidance.

The more assets that are at stake following a passing, the higher the risk that others might pursue all available means to get a piece of the pie--even if it completely contravenes the original wishes of the former owner. Estate planning fills the gap by closing as many opportunities for subsequent legal challenge as possible. Sadly, in many cases, even when some planning is done ahead of time, outsiders may attempt to find any loophole possible to upset the original plan.

That seems to be what happened with the estate of music legend James Brown. Brown died over four years ago from heart failure, but the final resolution of his assets remains in limbo with a potentially long future ahead. That is because the Huffington Post is now reporting that the state's supreme court recently rejected a compromise that was two years earlier between various parties.

The Backstory

Not long before his death Brown created a will that seemed to give the vast majority of his wealth to charity, mostly focusing of the educational goals of needy children. However, after his passing, his purported widow (the couple was not married) and various heirs challenged the will. The feuding escalated quickly, even reaching the point of forcing the singer's body to remain unburied for two months while disagreements were sorted out.

Over the next two years accusations about trustee mismanagement, altered wishes, and undue influence were hashed out in court. Eventually, in a somewhat unprecedented step, the state's Attorney General stepped in and brokered a deal. Per the terms of the deal, 50% of the estate would go to charity, 25% to the purported widow, and the remaining 25% to other heirs.

Not So Fast

That old agreement was reached in 2009. But shortly after a fewer of the former trustees--they had been replaced by a lower court earlier--filed suit challenging the agreement. That legal challenge eventually made its way up to the highest court in the state. In a new ruling that high court threw out the AG-brokered compromise. The main problem, noted the opinion, was that the compromise seemed to give short-shrift to Brown's actual wishes which were to give virtually everything to charity. The judges noted that it should not be that easy to slash charitable bequests via legal challenge. So now the matter will be sent back to a lower court to figure out the next steps.

One of many lessons to be gleaned from this sad case: a simple will is often not enough to prevent others from attacking your wishes, causing legal controversy, and delaying a final resolution for years.

Advisor One shared a useful story this week that touches on an item commonly forgotten in wealth transfers, including those using trusts or other legal tools. It is critical to remember how insurance coverage might be affected by the transfer. That way, changes can be made immediately to guarantee that coverage is in good standing at all times. Sadly, as you might expect, this error is often only uncovered after some catastrophic accident, when insurance coverage is needed. The last thing anyone wants is that "oops" moment, when it is discovered that the coverage does not exist because of the previous transfer via trust or other tool (like an LLC).

The Basic Problem
Insurance policies are written to provide coverage to an owner or titleholder. This is the case for virtually all types of coverage, from home, automobile, and boats to collectibles. Problems arise, however, when a transfer is made and the insurance policy is not updated to reflect the change. For example, if a home is transferred into a trust, it is important to confirm that the proper changes are made so that the homeowners policy covers the new arrangement.

While this may seem like an obvious step that must be handled as part of these transfers, it is all too often forgotten. The article argues that the mistake is more likely to be made in situations where ownership changes but the actual possession of the property remains with the former owner. For example, if a senior transfers title of a house to a trust for tax and planning purposes, the senior is likely to still live in the house. In those cases it is critical to ensure that the insurance covers both the actual owner and the "occupant." The same general idea also applies vehicles and other valuable items.

The specific protocol to ensure proper coverage may depend slightly on the item and the insurance company. In most cases, it is just a quick fix. But, the consequences of failing to making that quick fix before a possible accident are staggering. It goes without saying that it is beneficial to have a decent relationship with your broker such that you can make a quick call after these transfers to get specific information about what needs to be done in your exact case to guarantee that these insurance details are account for.

The bottom line: keep insurance issues in mind when all of these transfers and be sure to bring it up if it seems to be a forgotten detail.

Communication is absolutely essential to quality estate planning. That includes both sharing of information between client and planner, as well as the client being open and honest with their family about their wishes. Some might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out only after they are gone. But this opens up the door to potential feuding and costly legal challenge. The goal of proper planning is to make transfers as seamless and efficient as possible, and meeting that goal requires others to know what to expect when the time comes.

Most of the time, unwelcome inheritance surprises come in the form of not getting what you expected to receive. Many adult children are surprised when a parent leaves assets to someone else or does not distribute equally between siblings. But the opposite may also be true. You may receive an item that you do not want. For a variety of reasons, not all gifts may be welcome. There are steps that can be taken to disclaim a gift that is part of an inheritance but they are often confusing.

Thanks, But No Thanks
As referenced in a NJ News article on the subject, both state and federal law set rules that must be followed to disclaim a gift. Failing to do this properly may result in various complications, including tax issues. Generally, however, a disclaimer must be made in writing and be irrevocable. The disclaimer cannot be made if you already accepted some benefit from the gift. The disclaimer must be received by the executor in a timely manner

There are many other complications that come with disclaiming, however. If the disclaimed gift reverts back to the estate afterwards (and the same person is set to inherit part of the estate generally), then the individual will need to disclaim the gift yet again as a portion of the inherited remainder.

Importantly, the above rules roughly describe the process when a gift is transferred via a will. Options may be far different if alternative methods are used--like trusts. At the end of the day, it is absolutely critical not to make decisions about these matters without first visiting with an estate planning attorney and other professionals to understand the implications and the exact rules that must be followed. At the same time, it is helpful to avoid this possibility altogether by having discussions well-beforehand so that a plan can be crafted whereby heirs know what they are getting and have accepted it.

The last few months of 2012 were filled with mass speculation about how many federal tax issues would ultimately be decided. One part of the high-profile "fiscal cliff" proposal and competing options was the estate tax. As oft-discussed, the final tax details could have fallen anywhere between a $1 million or $5 million exemption level, with rates anywhere from 35% to 55%. Fearing that no agreement would be made and the country would "go over the cliff," many local residents conducted last minute wealth transfers to take advantage of what was assumed to be relatively favorable rates in 2012 that might disappear in 2013.

As we now know, the country did not go over the cliff. As for the estate tax, the compromise did not see nearly as sharp a rise as expected, with a $5.25 million exemption level and 40% rate (up somewhat from the 35% in 2012).

Considering that the concerns which led to many transfers in late 2012 were false alarms, is there anything that can be done to reverse the transfers? That was the subject of a recent Forbes article discussing the "Buyer's Remorse" of many who pulled the trigger on different financial plans as a result of tax uncertainties.

The story reminds that wealth transfers to others--usually children or grandchildren--can be reversed only in certain circumstances, depending on how the arrangements were crafted. Fortunately, in most cases the transfers were made via trusts with "controls" attached. Those control often allow changes to be made which can help when seeking to effectively take the gift back.

Alternatively, the story explains how having a spouse can have the same effect. That is because in many cases the transfers gave large gifts to children in trust. Those transfers usually allow one's spouse to use the funds (both income and principal) in any way that they chose. In that way, a couple may still have use of funds as if a gift wasn't made.

The only way to know your options for sure are to work with your financial advisor and estate planning attorney to get tailored advice. Each financial transaction is different, and there is significant flexibility in how different trusts are set-up. The options for a "do over" hinge on those details. Even if you did not conduct end-of-year transactions in 2012 ,this situation is a helpful reminder of the need to think clearly in the future about whether or not you want certain planning actions to be revocable or irrevocable. There are different benefits to each, but it is critical to understand what steps are permanent and what steps are not when working through long-term financial planning and asset transfers.

Like it or not, our world is infatuated with technology. Smartphones conduct intercontinental transactions. Friends across the country communicate through instantaneous text messaging, and telephones and tablets close distances and miles through face to face conversations. Because technology plays such an important role in our daily lives, today's estate planning should include an arrangement for organizing and protecting technological and digital assets.

Dividing Up Digital Assets
We have frequently discussed how there are different kinds of digital assets to think about when drafting your estate plan. First, there are your personal digital assets, which would include any email accounts, personal social media accounts and maybe even a personal web site or personal blog. Personal digital assets might also include any photos or documents stored on different websites, like Snapfish, Shutterfly or Dropbox. Information stored in any cloud storage should also be considered personal digital assets.

Along with personal digital assets, there are also financial digital assets, which would include any online banking or financial account information. Many people choose to pay their bills electronically, and even automatically, through their banking system or their bank's website. Others may use a company's website to pay their bills directly through that site, such as paying a monthly credit card bill using the bank's credit card website or using a utility company's online billpay system. Often, paying bills can be a mass of online passwords, dates and accounts. Any of these passwords, or the information contained in any of these accounts, would be considered your financial digital assets.

Finally, there are your business digital assets, which would include anything related to your business itself or business records.

Planning for Digital Assets
So how do you include your digital assets as part of your estate plan in this age of technology?

Organization is the first step. First, you need to begin organizing your digital assets, so that you know what digital accounts and information you have. Begin to take note of all of your different accounts and passwords, and explore a safe, secure and easy solution for storing your passwords, as explained in this Forbes article. Once you have this list, you will also want to update it frequently with new accounts or password changes. In your organization, you may also want to consider which information you'd like family members to be able to access, like family photographs or important family documents, and create a space in cloud storage for multiple family members to access.

After you've organized your accounts and information, you'll likely want to think about how these accounts and information within these accounts should be handled after your own passing. For example, do you want your social media site to live on after your own passing? Or would you rather it be deactivated? After you've thought through how you'd like this information handled after your passing, then you should incorporate instructions regarding this information into your estate planning. It may be wise to ensure that your estate planner, as well as your executor, knows how to access your organized list of online accounts with passwords, and your instructions for the accounts and information. With a bit of forethought, organization and planning, your digital assets can be a well thought out part of your overall estate plan.

The birth of a child, a soldier's welcome home, a wedding, a graduation, holiday festivities, or even a birthday party are all examples of gatherings where, more often than not, a blended family is present, taking part and celebrating. In the U.S., first marriages, second marriages and remarriages regularly welcome new family members. Plus, people are generally living longer, often outliving spouses and marrying again. Step children, step parents, children from previous marriages ­ are all members of the different types of blended families that now outnumber "traditional" families in the United States. And if you are a member of a blended family, as it grows and changes, new estate planning considerations arise regarding your own children and family members, as well as members of your blended family.

Avoiding Possible Problems
Often, in many family situations, one of the best ways to avoid potential problems is to talk with family members about your concerns. As a recent USA Today article discusses, communication is critical in estate planning, particularly when a blended family is involved. Frequently when a family member passes, the remaining family members aren't just concerned with the transfer of money, they are also concerned with the transfer of special heirlooms and other unique items. Talking about, and planning for the future transfer of not just monetary assets but personal assets as well will hopefully avoid potential problems and disagreements.

For example, one possible blended family pitfall is leaving an ex-spouse in your estate planning documents. If your marriage status changes, and you already have an estate plan in place, there are several things that you need to consider changing in your plan to avoid possible problems later. It may be wise, if you no longer wish for your former spouse to have a share in your inheritance, to change your estate plan. You may want to revise your plans, including but not limited to your will, your life insurance policies and your retirement plans, so that your former spouse no longer has any share in your assets or wealth. You may also want to rethink your beneficiary designations on different policies, to accommodate your changing family dynamic.

Another option to think about is designating different assets in different kinds of trusts. By putting assets into certain kinds of trusts, a grantor can detail exactly how the assets are transferred. Often, using a trust in estate planning can be a useful way to avoid potential problems by specifically indicating how certain assets will be shared and how assets will be controlled.

As you can imagine, blended families often add much joy to an extended family. But, in many cases, a blended family can also provide challenges for estate planning. With careful considerations, planning, and communication to family members regarding your intentions, the circumstances of any blended family can be managed in any estate plan.