When we think of property, we generally think of tangible things. Land. Stocks. Paintings. However, in our new digital age many of the things we own are digital as well. Intellectual property. Cryptocurrency. NFTs. These properties need to be valued and accounted for in estate planning, so they can transition in an estate just like real property.

Some intellectual property is hard to value prior to death, and after death as well. The estate of the performer known as Prince had issues with valuation. The estate had qualified appraisers with very different opinions of its value from the tax collectors. Most families would like to avoid such proceedings for their heirs, which is where planning can come into place. One strategy to avoid valuation complications is to liquidate or sell the asset early because it will make the estate valuation easier to do.

One of the reasons it can be hard to create a reasonable valuation is that it is uncertain how much income that intellectual property can bring in the future. Some intellectual property ends up bringing in no money at all without the driving force of the talent that originated it.

For example, what if a hard drive that held a famous author's unpublished manuscript were password protected in a way that prevented access from ever occurring? This is one of the newer questions when it comes to the digital estate, one that comes with an implicit compromise. We are always striving for greater security, but that also comes with limiting access. Cryptocurrency utilizes more advance pass phrases to allow access only to the owner, but what if that phrase is lost or the owner dies? Even with the recent decline in bitcoin prices, billions of dollars' worth of bitcoin may be stranded forever due to forgotten passwords.

Apple may potentially simplify life with their new passkeys with biometric sensing, eliminating passwords and helping to prevent identity theft and scams. However, it may make it even more difficult to access the accounts of the deceased by their loved ones and those who have permission to do so. It is not yet known how that will be handled because they are just introducing this feature, but it would be prudent to ensure access by creating a password list or other access that can be passed along. 

Digital assets aren't only assets that create revenue. There are sentimental digital assets to take into consideration too. Facebook and social media accounts may become family albums, or records of thoughts and opinions that loved ones want access to. 

Although estate planning generally has to do with the smooth transfer of assets, there are also many things beyond the asset transfer which can be important to preserve familial harmony and create a lasting legacy. The digital estate should not be overlooked and should be included in the planning process even for smaller estates that don't think they own any intellectual property. 
FAMOUS WILL FOR THE MONTH "SHOELESS JOE" JACKSON
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"Shoeless Joe" Jackson (1888 - 1951)
"Shoeless Joe" Jackson was one of the greatest-hitting, major league baseball players of his time. He was one of eight players banned from baseball for life for his alleged involvement in the Black Sox scandal. ©LIVING TRUST NETWORK
In the Informational Article, Passkeys and Estate Planning read how the emergence of new technology making passwords obsolete could complicate the estate settlement process. In another Article, Covid Interrupts learn how a mistrial was declared due to the pandemic and the retrial was not barred by double jeopardy.

If you live in New Jersey or Pennsylvania or any other one of our 50 States, read The One Thing You Have To Eat In Every State in our Of Interest Articles.

Wishing you a safe summer.

Sincerely,
Ira J. Brower, Founder
Covid Interrupts
Dale Thrush was on trial for 10 counts of failure to pay over payroll taxes and four counts of failure to file an income tax return. A jury was seated, and government witnesses were called. The trial was going smoothly when it was adjourned for the weekend. The government's star witness, Thrush's former bookkeeper, was scheduled to testify on Monday. 

Unfortunately, that witness tested positive for Covid over the weekend, and so could not enter the courthouse. The government moved to have the bookkeeper testify remotely by telephone or in a covered canopy outside the court. The defense refused to waive its right to confront the witness in person, and objected that the cold weather outdoors could affect the health of one of the attorneys, who had an underlying illness, making the tent approach inappropriate. Thrush's whole defense, his attorneys said, was that the bookkeeper was lying, so confrontation was essential.

Then the judge's spouse also tested positive for Covid. Then a juror called to report she could not come in because her son now had flu-like symptoms. When the judge proposed a three-week delay, the defense objected that in the interim the jurors could be prejudiced by outside voices. What's more, it developed that some of the jurors would not be available three weeks later, as they had previously scheduled medical procedures. There was nothing to be done but declare a mistrial, the court ruled.

Six months later the government began a retrial. Thrush objected on the grounds of double jeopardy, arguing that the earlier proceedings could have continued with the judge supervising remotely. The court denied Thrush's motion to dismiss the case, ruling that not all retrials offend the Double Jeopardy clause of the Constitution. When a court declares a mistrial out of "manifest necessity" a retrial is permissible. Here, the pandemic had provided that necessity, and so the Thrush trial proceeded.

(July 2022)
© 2022 M.A. Co. All rights reserved.
Passkeys and Estate Planning
One of the more frustrating aspects of modern technology is the necessity of passwords for gaining access to devices and data. In February 2013 the Fast Identity Online Alliance was launched to set standards that will enable reduced reliance upon passwords. In its June Developer Conference, Apple announced that beginning this fall it will be replacing passwords with passkeys, relying on biometric data for implementation (finger prints or face ID). Other firms are expected to follow suit.
The new approach may simplify daily interactions with digital devices, but it could complicate estate planning and estate settlement. Common types of digital assets to be concerned about include:

Personal. Personal digital assets include e-mail and text messages, e-books (e.g., Kindle and Nook), word processing and pdf files, photographs, videos, music files (e.g., mp3s and iTunes), spreadsheets, PowerPoint presentations, tax records and returns, and similar materials. They may be stored on a variety of devices, such as computers, tablets, smartphones, e-readers, cameras, hard drives, memory cards, CDs and DVDs, or online in the cloud. Each of these storage techniques often requires different means of access, including user names, passwords, or answers to "secret" questions.

Financial Accounts. Many people manage their financial affairs online, including bank and PayPal accounts, investment and brokerage accounts, bill payment (e.g., utilities, credit cards, car note payments, mortgage payments), and income taxes.  

Business Accounts. Business owners are likely to have customer databases containing names, addresses, and credit card information, along with information such as order history and pending orders. A professional such as a physician, attorney, or CPA may have client records, many of which will contain confidential information.

Other Digital Assets. In this category are items such as domain names, blogs, loyalty program benefits (e.g., frequent flyer miles, credit card rewards, and business discounts or vouchers), and gaming property (e.g., virtual money, avatars, or other assets earned when playing online games).

Why is it important to include access to digital assets in the estate plan?

Assist others upon death or incapacity. When individuals are prudent about their online life, they have many different usernames and passwords for their accounts. This is the only way to secure identities, but this devotion to protecting sensitive personal information can wreak havoc on families and fiduciaries upon incapacity and death as their rights to access digital assets are often unclear, as discussed below. Proper planning may make this process less complicated.

Reduce Identity Theft. In addition to needing access to online accounts for personal reasons and closing probate, family members need this information quickly so that a deceased's identity is not stolen. Until authorities update their databases regarding a new death, criminals can open credit cards, apply for jobs, and get state identification cards under a dead person's name.

Avoid Losing a Personal Story. Many digital assets are not inherently valuable, but are valuable to family members, who extract meaning from what the deceased leaves behind. Historically, people kept special pictures, letters, and journals in albums, scrapbooks, or shoeboxes for future generations. Today this material is stored on computers or online and often is never printed. Personal blogs and Twitter feeds have replaced physical diaries, and e-mail messages have replaced letters. Without alerting family members that these assets exist and without telling them how to get access to them, the story of the life of the deceased may be lost forever. This is not only a tragedy for family members but also, possibly, for future historians, who are losing pieces of history in the digital abyss.

If you have ignored this part of your estate planning, now would be a good time to start paying attention to it.

(July 2022)
© 2022 M.A. Co. All rights reserved.
Trustworthy Advice: Look No Further
As a corporate fiduciary, we are dedicated to providing our clients with trustworthy asset management. Of course, we also provide traditional trust services, such as administering estates and managing trust funds for young or inexperienced beneficiaries. Our primary function, however, is helping people turn financial success into financial security. We would like to take this opportunity to introduce you to what we do and how we do it.

Technically, we serve our asset-management clients as investment agent or as trustee under a revocable trust agreement. In practice, however, each of our clients is "special." We fit our services to the needs of the client. For example, you might need little more than a reliable source of investment bookkeeping today, but you might wish a much broader array of asset-management services when you retire and have new money to invest.

Essentially, the varied tasks that we perform for clients fall into four categories:

Asset management. Clients look to us for help in developing investment strategies that fit their current income needs, their goals for the future and their tolerance for market risks. We're also equipped to implement these strategies for them. Some ask us to submit specific investment recommendations for their approval. Others--including those who travel a lot or have especially demanding careers--authorize us to make investment decisions on their behalf.

Granting one's investment advisor full discretion is not something one does lightly these days. Because we charge moderate annual fees for our work, rather than relying on sales commissions, our clients know that they can count on us to act in their best interests.

When we talk about "trustworthy asset management," we mean that each and every member of our staff observes two rules: 1. The client's interests always come first. 2. In case of exceptions, see Rule 1.

Good financial housekeeping. We handle all details related to purchases and sales of securities. We provide safekeeping. We disburse or reinvest investment income promptly. We keep accurate, comprehensive investment records and submit periodic statements to our clients. We watch for bond calls and handle redemptions promptly. We...but you get the idea. Our tradition of trusteeship makes us near-fanatics when it comes to attending to the detail work of investing. Some clients who first came to us merely to receive these relatively routine services now draw upon our asset-management capabilities as well.

Special services. Many of our clients look to us for a variety of special services when and as they need them: Payment of household bills. Payment of quarterly estimated taxes. Arranging for preparation of annual tax returns. Older clients often authorize us to step in and provide full personal financial management in the event that they should become mentally or physically incapacitated. Even when this alternative to a court-ordered conservatorship is not needed, it contributes to the client's financial peace of mind.

Traditional trust and estate services. Finally, our clients can draw upon our traditional trust and estate services. No other type of asset-management firm can offer this kind of continuity from generation to generation. Only a trust institution such as ours can help you preserve personal financial security for life, then administer your estate and look after funds that you leave in trust for others in the family, or for charitable purposes.

When billionaires become billionaires, often they create and staff their own family financial offices. That's fine, but only if you possess the megawealth to justify the high cost. Perhaps the best way to visualize our approach to personalized asset management is to picture us as a similar office--one that serves many individuals and families and so can provide its services at quite moderate cost.
May we provide you and your family with more information about how we can help you create and maintain a long-term strategy for financial security? We would be glad to schedule an appointment at your earliest convenience.

© 2019 M.A. Co. All rights reserved.
Any developments occurring after March 1, 2019, are not reflected in this article.
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