Employers should be on the lookout for a new email phishing scam that targets employee paychecks. The latest wave of attacks is a new version of wire fraud scams, which have recently hit businesses across the country.

Known as “business email compromise” or “business email spoofing” (BEC/BES), these scams target businesses of all industry types and sizes, according to the IRS. And the fraud is growing quickly, as it bypasses many existing security protocols, and the amount of funds stolen are often small enough that many companies chalk the loss up to the cost of doing business, which allows the scammers to stay under the radar of authorities.

How The Scam Works

The emails typically impersonate a high-level company employee, like the CFO or CEO, and the messages are sent to payroll or human resources (HR) staff. The email from the scammer asks the payroll or HR staff to change his or her direct deposit information for payroll. The scammer then provides a new bank account and routing number used to have paychecks direct-deposited, but the account is actually controlled by the scammer.

Once the funds are routed to the criminal’s account, the company is on the hook for replacing the stolen funds, and the employee whose email was impersonated faces the inconvenience of a late paycheck. The scam is generally discovered fairly quickly, but not before the victim misses one or two direct deposits.

In another version of the scam, the emails impersonate a company executive and are sent to the employee in charge of making wire transfers. The email asks for a wire transfer to be made to an account controlled by the scammer. Companies that are hit with this scam have lost tens of thousands of dollars.

In addition to having to replace the stolen funds, the scam creates a data breach for the employer, which sets in motion a legal requirement for the company to notify all affected parties. If the employer fails to respond quickly enough, the business can be hit with fines and other penalties.

Flying Under The Radar

According to reporting from CNBC, this latest scam appears to be growing in part because it bypasses some email control protocols, and also because it gets around the usual warnings companies have issued to employees about traditional wire fraud, since the scammers aren’t actually asking for money or an invoice transfer—they are simply asking to change their bank account information for direct deposit.

What’s more, the scam doesn’t require the criminal to hack into an employee’s email account; scammers generate fake email accounts with free services like Gmail and Yahoo. To create a fake email account, the scammer uses the employee’s real name, which lets the scammer avoid security measures designed to detect hacked employee email.

The email messages are typically quite short, polite, and free from the spelling and grammar errors typical of past phishing scams. The emails often start with something innocuous-sounding, such as “‘Hey, do you have a second? I need to update my direct deposit information,” and if that target responds, the scammer will reply in real-time and go from there.

The emails can also sound urgent, often requesting that the HR staff change the bank account information quickly, many times asking to switch the account “before the next paycheck.” Other times, the email will try to discourage the HR staff from calling them back by noting, “I’m going into a meeting now.”

While the funds stolen in the scam are typically relatively low—thousands of dollars versus hundreds of thousands involved with a typical wire fraud case—because the scam is so simple and inexpensive to pull off, it’s becoming more popular with fraudsters. Plus, CNBC noted that criminals have found ways to automate the scam, so the scheme can be scaled, and a single company may get dozens or more hits at the time, which makes the scam even more lucrative—and attractive.

How Employers Can Safeguard Their Operation
According to the IT security firm KnowBe4, employers can combat this new scam and others like it by immediately taking the following actions:

• Alert your workforce to the new scam and explain how it works.
• Direct employees to forward any suspicious requests to the IT or HR departments, rather than replying to the email.
• Instruct employees to refrain from supplying log-in credentials or personally-identifying information in response to any email.
• Ensure that log-in credentials used for payroll purposes differ from those used for other purposes, such as employee surveys.
• Enforce (or, where necessary, establish) multi-factor authentication requirements.
• Review and update the physical, technical, and personnel-related measures taken to protect your sensitive information and data.

If your company does get hit by this email scam or another internet related-scam, you should report the incident to the FBI’s Internet Crime Complaint Center (IC3) by going to www.ic3.gov.

Defend Your Digital Domain
This latest phishing scam is just one of numerous threats that your company faces when it comes to digital security. In addition to scams involving stolen funds, your business is also susceptible to data breaches, hacking, network failures, and other malicious actions targeting your sensitive client and business data.

What’s more, you are also required to stay in strict compliance with an ever-evolving set of federal and state laws governing data privacy. If you fail to comply with these mandates, your business risks fines and other penalties that can seriously impact your bottom line. On top of all that, there is also the risk of getting hit with a costly lawsuit from a client whose data was stolen from your business.

From installing the proper digital security systems and working with the most secure web hosting service to investing in cyber insurance, there are a number of steps you can take to protect your company’s digital domain. That said, the safeguards your company requires will depend on a number of different factors, including the size of your business, the type of data you collect, the market sector your business serves, among other factors, so there’s no one-size-fits-all cybersecurity strategy that works for all businesses.

With this in mind, your best bet is to consult with us, as your Family Business Lawyer™, to implement a comprehensive digital protection plan. As your Family Business Lawyer™, we can advise you on the specific protections you should have in place and keep you updated on the ever-changing legal landscape governing data privacy. And if you’re ever hacked, we can defend you in court against any lawsuits or other liabilities that might result. Contact us, your Family Business Lawyer™ today to learn more.

This article is a service of Sahmra A. Stevenson, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

If you are a single parent, life for you right now probably couldn’t get any busier. You are likely being pulled between work, school activities, and home – and the inevitable emergencies that fill the lives of single parents everywhere.

Being a single parent is a huge responsibility, even if you do share time with a parenting partner, and especially so if you don’t. Regardless, as a single parent, your children’s lives are now largely in your hands.  So what would happen to them if something happened to you?  Who would take care of them?  Who would pay for their housing and food?  Who would pay for their education?  These are questions you need to get answered, and the best way to do that is through estate planning.

Having an estate plan that covers the care of your children in case you should be in a severe accident, fall ill, or die welcomes peace of mind for the single parent knowing everything and everyone they love is taken care of.  Here are the must-haves that can protect your children if something were to ever happen to you:

Will

A will lets you name the person responsible for your estate and belongings as well as who will inherit your assets. Most importantly this is the legal vehicle you use to name a guardian for your children,  without a will, the state will decide their fate. The greatest risk you leave behind when ignoring this piece of your estate plan is that your children could be taken into the care of strangers at any time.

Revocable Living Trust

There are so many benefits of a living trust for single parents.  First, a trust enables you to still control your money and property while you’re able, but if you die or become incapacitated, it transitions that decision-making authority immediately to the person you have named as your trustee (obviously someone you can trust and count on to do what you would have wanted).  If your children are still minors or even young adults their inheritance can be handled for them until the time comes when they are capable (and you decide that time).  Plus, if you have a trust, your estate doesn’t have to go through probate, which can be costly and time-consuming. Without trust, you risk draining your hard-earned money on probate costs. This is not ideal if your children need to continue living in their homes and having their expenses paid. 

Durable Power of Attorney

As a single parent, you are likely the only signatory on your mortgage, your bank accounts, and other financial instruments.  What would happen if you became incapacitated and there was no one to pay the mortgage or the bills?  That is why it is important to have a durable power of attorney in place. When choosing your power of attorney, it should be someone you trust managing your financial affairs, while also make legal decisions on your behalf if you are unable to do so.

Advance Medical Directive 

An advanced medical directive gives you the legal power to the person you choose to make your health care decisions in case you are not capable of doing so yourself.  This is especially important if you are not remarried or do not have immediate family members nearby.

Beneficiary Forms

Your life insurance policy, retirement accounts, and brokerage accounts all require beneficiary designations.  Those you designate to receive the assets in these accounts will only receive them if you execute the proper beneficiary forms!  They cannot pass to your heirs via a will or trust. And minor children should never be named as beneficiaries as they are not legally able to own assets. Talk with us today, your Personal Family Lawyer® about strategies to leave these assets to your children without court intervention.

Kids Protection Planning Kit®

Developed by a nationally recognized attorney who is a single mom herself, the Kids Protection Planning Kit® provides single parents with the legal planning tools they need to make sure there is never a question about who will take care of your kids if you are in an accident. The kit includes legal documents to name short- and long-term guardians, instructions for those guardians, medical powers of attorney for your minor children, and more.  

You can name your guardians right now with my Kids Protection Plan Tool, It only takes minutes, and it’s absolutely free. 

One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning. Call our office or schedule online today to schedule your free Family Wealth Planning Session™  for us to review how to protect what matters most, during this time together we can identify the best strategies for you and your family.

This article is a service of Sahmra A. Stevenson, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Employers should be on the lookout for a new email phishing scam that targets employee paychecks. The latest wave of attacks is a new version of wire fraud scams, which have recently hit businesses across the country.

Known as “business email compromise” or “business email spoofing” (BEC/BES), these scams target businesses of all industry types and sizes, according to the IRS. And the fraud is growing quickly, as it bypasses many existing security protocols, and the amount of funds stolen are often small enough that many companies chalk the loss up to the cost of doing business, which allows the scammers to stay under the radar of authorities.

How The Scam Works

The emails typically impersonate a high-level company employee, like the CFO or CEO, and the messages are sent to payroll or human resources (HR) staff. The email from the scammer asks the payroll or HR staff to change his or her direct deposit information for payroll. The scammer then provides a new bank account and routing number used to have paychecks direct-deposited, but the account is actually controlled by the scammer.

Once the funds are routed to the criminal’s account, the company is on the hook for replacing the stolen funds, and the employee whose email was impersonated faces the inconvenience of a late paycheck. The scam is generally discovered fairly quickly, but not before the victim misses one or two direct deposits.

In another version of the scam, the emails impersonate a company executive and are sent to the employee in charge of making wire transfers. The email asks for a wire transfer to be made to an account controlled by the scammer. Companies that are hit with this scam have lost tens of thousands of dollars.

In addition to having to replace the stolen funds, the scam creates a data breach for the employer, which sets in motion a legal requirement for the company to notify all affected parties. If the employer fails to respond quickly enough, the business can be hit with fines and other penalties.

Flying Under The Radar

According to reporting from CNBC, this latest scam appears to be growing in part because it bypasses some email control protocols, and also because it gets around the usual warnings companies have issued to employees about traditional wire fraud, since the scammers aren’t actually asking for money or an invoice transfer—they are simply asking to change their bank account information for direct deposit.

What’s more, the scam doesn’t require the criminal to hack into an employee’s email account; scammers generate fake email accounts with free services like Gmail and Yahoo. To create a fake email account, the scammer uses the employee’s real name, which lets the scammer avoid security measures designed to detect hacked employee email.

The email messages are typically quite short, polite, and free from the spelling and grammar errors typical of past phishing scams. The emails often start with something innocuous-sounding, such as “‘Hey, do you have a second? I need to update my direct deposit information,” and if that target responds, the scammer will reply in real-time and go from there.

The emails can also sound urgent, often requesting that the HR staff change the bank account information quickly, many times asking to switch the account “before the next paycheck.” Other times, the email will try to discourage the HR staff from calling them back by noting, “I’m going into a meeting now.”

While the funds stolen in the scam are typically relatively low—thousands of dollars versus hundreds of thousands involved with a typical wire fraud case—because the scam is so simple and inexpensive to pull off, it’s becoming more popular with fraudsters. Plus, CNBC noted that criminals have found ways to automate the scam, so the scheme can be scaled, and a single company may get dozens or more hits at the time, which makes the scam even more lucrative—and attractive.

How Employers Can Safeguard Their Operation
According to the IT security firm KnowBe4, employers can combat this new scam and others like it by immediately taking the following actions:

• Alert your workforce to the new scam and explain how it works.
• Direct employees to forward any suspicious requests to the IT or HR departments, rather than replying to the email.
• Instruct employees to refrain from supplying log-in credentials or personally-identifying information in response to any email.
• Ensure that log-in credentials used for payroll purposes differ from those used for other purposes, such as employee surveys.
• Enforce (or, where necessary, establish) multi-factor authentication requirements.
• Review and update the physical, technical, and personnel-related measures taken to protect your sensitive information and data.

If your company does get hit by this email scam or another internet related-scam, you should report the incident to the FBI’s Internet Crime Complaint Center (IC3) by going to www.ic3.gov.

Defend Your Digital Domain
This latest phishing scam is just one of numerous threats that your company faces when it comes to digital security. In addition to scams involving stolen funds, your business is also susceptible to data breaches, hacking, network failures, and other malicious actions targeting your sensitive client and business data.

What’s more, you are also required to stay in strict compliance with an ever-evolving set of federal and state laws governing data privacy. If you fail to comply with these mandates, your business risks fines and other penalties that can seriously impact your bottom line. On top of all that, there is also the risk of getting hit with a costly lawsuit from a client whose data was stolen from your business.

From installing the proper digital security systems and working with the most secure web hosting service to investing in cyber insurance, there are a number of steps you can take to protect your company’s digital domain. That said, the safeguards your company requires will depend on a number of different factors, including the size of your business, the type of data you collect, the market sector your business serves, among other factors, so there’s no one-size-fits-all cybersecurity strategy that works for all businesses.

With this in mind, your best bet is to consult with us, as your Family Business Lawyer™, to implement a comprehensive digital protection plan. As your Family Business Lawyer™, we can advise you on the specific protections you should have in place and keep you updated on the ever-changing legal landscape governing data privacy. And if you’re ever hacked, we can defend you in court against any lawsuits or other liabilities that might result. Contact us, your Family Business Lawyer™ today to learn more.

This article is a service of Sahmra A. Stevenson, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

Wills and trusts are two of the most commonly used estate planning documents, and they form the foundation of most estate plans. While both documents are legal vehicles designed to distribute your assets to your loved ones upon your death, the way in which they work is quite different.

From when they take effect and the property they cover to how they are administered, wills and trusts have some key differences that you need to consider when creating your estate plan. That said, when comparing the two documents, you won’t necessarily be choosing between one or the other—most plans include both.

In fact, a will is a foundational part of nearly every person’s estate plan. Yet, you may want to combine your will with a living trust to avoid the blind spots inherent in plans that rely solely on a will. As you’ll learn below, the biggest of these blind spots is the fact that if your estate plan only consists of a will, you are guaranteeing your family has to go to court if you become incapacitated or when you die.

To determine the right solution for your family, you should meet with us, your Personal Family Lawyer® for a Family Wealth Planning Session™. We offer a comprehensive process for helping you feel confident that you’ve chosen the right planning tools at the right fees for yourself and the people you love.

In the meantime, here are some of the key differences between wills and trusts that you should be aware of. 

When They Take Effect

A will only will go into effect when you die, while a trust takes effect as soon as it’s signed and your assets are transferred into the name of the trust, known as “funding” the trust. To this end, a will directs who will receive your assets upon your death, while a trust specifies how your assets will be distributed before your death, at your death, or at a specified time after death. This is what keeps your family out of court in the event of your incapacity or death.

Furthermore, because a will only goes into effect when you die, it offers no protection if you become incapacitated and are no longer able to make decisions about your financial, legal, and healthcare needs. If you do become incapacitated, your family will have to petition the court to appoint a conservator or guardian to handle your affairs, which can be costly, time-consuming, and stressful.

And there’s always the possibility that the court could appoint a family member as a guardian that you’d never want making such critical decisions on your behalf. Or the court might select a professional guardian, putting a total stranger in control of just about every aspect of your life and leaving you open to potential fraud and abuse by crooked guardians.

With a trust, however, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you’re unable to do so. When combined with a well-drafted medical power of attorney and living will, a trust can keep your family out of court and out of conflict in the event of your incapacity, while ensuring your wishes regarding your medical treatment and end-of-life care are carried out exactly as you intended.

The Assets They Cover

A will covers any asset solely owned in your name. A will does not cover property co-owned by you with others listed as joint tenants, nor does your will cover assets that pass directly to your loved ones via a beneficiary designation, such as life insurance, IRAs, 401(k)s, and payable-on-death bank accounts.

Trusts, on the other hand, cover any asset that has been transferred, or “funded,” to the trust or where the trust is the named beneficiary of an account or policy. That said, if an asset hasn’t been properly funded to the trust, it won’t be covered, so it’s critical to work with your Personal Family Lawyer® to ensure your trust works as intended.

Most lawyers will set up a trust for you, but few will ensure your assets are properly inventoried or funded, and we believe this is the single most important aspect of estate planning—and it’s one that is almost always overlooked. As your Personal Family Lawyer®, we will not only make sure your assets are properly inventoried and titled when you initially set up your trust, we’ll also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust on an ongoing basis, with various maintenance plans to ensure your plan works when your family needs it. This keeps your assets from being lost and prevents your family from being inadvertently forced into court because your plan was never fully completed.

Finally, even with the support of a lawyer like us, it can sometimes be difficult to transfer every single one of your assets into a trust before your death. Given this, consider combining your trust with what’s known as a “pour-over” will. With a pour-over will in place, all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process.

How They Are Administered

In order for assets in a will to be transferred to a beneficiary, the will must pass through the court process known as probate. During probate, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes.

However, probate proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate. During probate, there’s also the chance that one of your family members might contest your will, especially if you have disinherited someone or plan to leave significantly more money to one relative than the others.

Bottom line: If your estate plan consists of a will alone, you are guaranteeing your family will have to go to court if you become incapacitated or when you die.

Furthermore, since probate is a public proceeding, your will becomes part of the public record upon your death. This means everyone will be able to learn the contents of your estate, who your beneficiaries are, and what they inherit, setting them up as potential targets for scam artists and frauds.

Unlike wills, trusts don’t require your family to go through probate, which can save them time, money, and the potential for conflict. Plus, when you have a trust set up, the distribution of your assets happens in the privacy of our office—not the courtroom—so the contents and terms of your trust will remain completely private.

How Much They Cost

Wills and trusts do differ in cost—not only when they’re created, but also when they’re used. The average will-based estate plan can run between $500 to $2,000, depending on the options selected. An average trust-based plan can be set up for $3,000 to $5,000, again depending on the options chosen. So at least on the front end, wills are less expensive than trusts.

However, wills must go through probate, where attorney fees and court costs can be quite pricey, especially if the will is contested. So even though a trust may cost more upfront to create than a will, the total costs once probate is factored in can actually make a trust the less expensive option in the long run.

That said, each family’s circumstances are different, and this is why as your Personal Family Lawyer® we do not create any documents until we know what you actually need, and what will be the most affordable solution for you and your family, both now and in the future, based on your family dynamics, your assets, and your desires.

With this in mind, our Family Wealth Planning Session Process™ is designed to compare the costs of will-based planning and trust-based planning with you, so you know exactly what you want and why, as well as the total costs and benefits over the long term.

Find The Option That’s Right For Your Family
The best way for you to determine whether or not your estate plan should include a will, a living trust, or some combination of the two is to meet with us as your Personal Family Lawyer® for a Family Wealth Planning Session™. During this process, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you become incapacitated or die.

Sitting down with us, your Personal Family Lawyer® will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. Schedule your appointment today to get started.This article is a service of Sahmra A. Stevenson, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $450 session at no charge.

You are likely well aware of the tax benefits that come from donating to charity during your lifetime—donations to charity are tax-deductible. But you may be surprised to learn about the numerous benefits that are available when you incorporate charitable giving into your estate plan.

As with donating to charity during your lifetime, dedicating a portion of your estate to a charitable cause can reduce the taxable value of your estate. You can also receive significant tax savings by naming your favorite charity as the beneficiary of your IRA, 401(k), or other retirement accounts.

And if you have highly appreciated assets like stock and real estate that you want to sell, you can even set up a special type of charitable trust that can not only help you avoid both income and estate taxes but also create a lifetime income stream for yourself and your family, all while supporting your most beloved charitable cause.

While as a Personal Family Lawyer®,we can help you find the most beneficial option for donating to charity via estate planning, here are three of the most popular ways to structure charitable giving into your plan.

1. Leave Money To Charity In Your Will Or Revocable Living Trust

One of the simplest ways to donate to charity in your estate plan is to name a charity as the beneficiary in either your will or revocable living trust. Just make certain when you leave money via your will or living trust that you use the correct legal name of the charity, as many charities have very similar names, and if you aren’t specific, the charity may have difficulty accessing the funds.

In either your will or living trust, you can also state the purpose for which you’d like the charity to use the funds, or you can make the donation for the charity’s “general purpose,” meaning the charity can use the funds as it sees fit. If you choose to leave money for a specific purpose, make sure that the charity can actually fulfill that purpose or the charity might have to refuse the gift. To this end, if your request is really specific, you may want to contact the charity before making the request to see if the organization will be able to fulfill your objective.

Keep in mind that if you leave money to charity in your will, your will must first go through the court process of probate, which can be time-consuming, before the organization can access the funds following your passing. Conversely, donations to charity made via a trust would pass to the charity immediately upon your death.

Leaving money to charity in your will or living trust can reduce the taxable value of your estate, thus reducing estate taxes for your heirs. That said, the current federal estate tax exemption is $11.7 million per person, so unless you are super wealthy, you won’t see any tax benefit—at least at the federal level. However, 17 states currently have state estate taxes that kick in at lower exemption amounts, so if you live in one of those states and leave money to charity via your estate plan, your loved ones may be able to benefit from reduced estate taxes at the state level.

2. Name A Charity as the Beneficiary of Your Retirement Account

As with leaving money to charity via your will or living trust, another easy way to incorporate charitable giving into your estate plan is to name a charity as the beneficiary of all or a percentage of your tax-deferred retirement accounts (IRA, 401(k), 403(b), etc.). In addition to supporting a good cause that’s near and dear to your heart, donating your retirement account assets to charity comes with some significant tax-saving benefits.

Individuals named as beneficiaries of your retirement account will have to pay income taxes on any distributions they receive from your retirement account. But since charities are tax-exempt, charitable organizations named as beneficiaries will receive the full amount of your retirement account assets. Additionally, though you need to include the value of the retirement account assets as part of the gross value of your estate, you will receive a tax deduction for the charitable contribution, which can offset estate taxes.

Finally, under recent changes to the SECURE Act, most beneficiaries of IRAs now must withdraw all funds from the retirement account within 10 years of the account holder’s death, which eliminates the ability of most individual beneficiaries to stretch out retirement account distributions over time and compresses income tax payments into a much shorter period. Those who fail to withdraw funds within the 10-year window face a 50% tax penalty on the assets remaining in the account.

Yet because charities don’t pay income taxes, it may be more beneficial from a tax-saving perspective to leave your retirement assets to charity, while passing on your non-retirement assets to your loved ones. However, the SECURE ACT does offer exemptions to the mandatory 10-year withdrawal rule for certain beneficiaries, including a spouse, minor children, and disabled or chronically ill individuals. Given this, you should consult with us, as your Personal Family Lawyer, to determine the most beneficial option for passing on your retirement account assets.

3. Set Up a Charitable Remainder Trust

One final way to structure charitable giving into your estate plan is by creating a special trust known as a charitable remainder trust (CRT). If you have highly appreciated assets like stock and real estate you wish to sell, you can use a CRT to avoid income and estate taxes—all while creating a lifetime income stream for yourself or your family and supporting your favorite charity.

A CRT is a “split-interest” trust, meaning it provides financial benefits to both the charity and a non-charitable beneficiary. With CRTs, the non-charitable beneficiary—you, your child, spouse, or another heir—receives annual income from the trust, and whatever assets “remain” at the end of your lifetime (or a fixed period up to 20 years), pass to the named charity or charities.

When you set up a CRT, you name a trustee, an income beneficiary, and a charitable beneficiary. The trustee will sell, manage, and invest the trust’s assets to produce income that’s paid to you or another beneficiary. The trustee can be yourself, a charity, another person, or a third-party entity.

With the CRT set up, you transfer your appreciated assets into the trust, and the trustee sells it. Normally, this would generate capital gains taxes, but instead, you get a charitable deduction for the donation and face no capital gains when the assets are sold. Once the appreciated assets are sold, the proceeds (which haven’t been taxed) are invested to produce income.

As long as it remains in the trust, the income isn’t subject to taxes, so you’re earning even more on pre-tax dollars. And when the trust assets finally pass to the charity, that donation won’t be subject to estate or income taxes.

Because CRTs come with very specific and complex requirements surrounding their creation, operation, and the responsibilities of the trustee, it’s vital that you consult with us, your Personal Family Lawyer® if you are considering setting up a CRT. Meanwhile, review our previous post for an in-depth look at how charitable remainder trusts work and the numerous tax-saving and income benefits they offer.

Enlist Our Support

Although these three methods for structuring charitable donations into your estate plan are among the most popular, there may be other options available. Meet with us, as your Personal Family Lawyer®, to determine the best way to achieve your charitable objectives while maximizing your tax-saving and other financial benefits. Schedule an appointment with us today to learn more.

This article is a service of Sahmra A. Stevenson, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $450 session at no charge.

In April 2018, billionaire Matthew Mellon flew by private jet to Cancun Mexico to check himself into drug rehab to deal with his addiction to opioid pain pills. But the 54-year-old heir to the Mellon Bank dynasty never made it to the rehab facility and was found dead in his hotel room after suffering an apparent heart attack days before he was due to check into the clinic.

In addition to leaving behind three children, Matthew also left behind an estimated $500 million in XRP, a cryptocurrency. Problem is, at the time of his death, Mellon apparently had never bothered to share the location of the digital keys needed to access his digital fortune, and it now looks like his massive fortune is lost for good.

This tragic oversight demonstrates one of the most basic, yet often-overlooked, tenets of estate planning—in the event of your incapacity or death, if your heirs don’t know how to find or access your assets, those assets are as good as gone. In the case of cryptocurrency, it’s as if those assets never existed at all.

An American Dynasty
Matthew’s great-great-great-grandfather, Thomas Mellon, founded Mellon Bank in Pittsburgh in 1869, and he was the patriarch of one of America’s richest dynasties. When he was 19, Matthew’s own father, Karl Mellon, tragically committed suicide in 1983, a few days before Matthew graduated high school.

After graduating from the University of Pennsylvania’s Wharton School at age 21, Matthew inherited a series of trusts worth some $25 million. Matthew was reportedly introduced to cryptocurrency by the Winklevoss twins, Cameron and Tyler, and in 2012, he started out by purchasing Bitcoin and investing in several companies related to the digital currency.

Matthew eventually sold off his Bitcoin after he became more interested in Ripple’s XRP, and he reportedly started out with an initial investment of about $2 million. After the crypto market exploded, Matthew’s initial investment in XRP grew exponentially, and in early 2018 it was worth more than $1 billion.

Cold Wallets And False Names

Ironically, Matthew’s digital currency was lost in part because he used a security practice aimed at safeguarding the funds. Believing his massive windfall would make him the target of hackers and other criminals, Matthew reportedly kept his XRP locked in cold wallets in dozens of secret accounts under false names only he could identify.

A “cold wallet” is one that isn’t connected to the Internet. The use of a cold wallet is a common practice, since “hot wallets,” or those connected to the internet, are a frequent target of hackers. For an added level of security, Matthew hid the digital keys needed to access those cold wallets in bank vaults all over the country. But as with the cold wallets, Matthew never shared the location of those bank vaults with anyone either, and now, some three years later, his family has yet to locate any of his crypto holdings or passcodes.

Matthew’s story is sadly not uncommon. In fact, one estimate found that roughly 20% of all Bitcoin is considered lost, which means some $140 billion in capital has simply vanished into cyberspace. The vast majority of this lost crypto is the result of cases like Matthew’s where investors die without leaving their heirs any way to access it.

And cryptocurrency isn’t the only asset that ends up going missing. From bank accounts and life insurance policies no one knows about to safe deposit boxes and everything in between, your family must know how to find and access every asset you own, otherwise, it could be lost forever.

In fact, there’s a total of more than $58 billion of unclaimed assets from across the country held by the State Department of Unclaimed Property. Much of that massive sum got there because someone died and their family didn’t know they owned the asset.

A Comprehensive Inventory
Fortunately, losses like these are easily avoidable with proper planning. Whether your estate is worth millions or far less, it’s absolutely vital that your plan includes a comprehensive inventory of your assets. And as Matthew’s case shows, this inventory must also include detailed instructions for how your heirs can find and access all of those assets, particularly highly encrypted assets like cryptocurrency.

These components are a standard part of every estate plan your Family Business Lawyer™ creates. Your Family Business Lawyer™ will build a detailed inventory of your wealth and property—including your business—that includes the exact location of every asset. And whether it’s cryptocurrency, social media accounts, or an online payment platform like PayPal, we’ll also include detailed instructions for locating and accessing all of your company’s digital assets and their passcodes. Contact us today to get started.

This article is a service of Sahmra A. Stevenson, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

Legendary hip hop artist DMX—born Earl Simmons—passed away on April 9 at age 50 after suffering a massive heart attack a week earlier at his home in White Plains, New York. The heart attack was reportedly triggered by a cocaine overdose on April 2, which left the rapper hospitalized in a coma. After a week of lingering in a vegetative state, his family made the decision to remove him from life support.

As we reported last week in part one, although DMX was wildly successful in both music and movies, the rap icon experienced serious legal and financial problems, along with frequent issues with drug addiction throughout his career. Having fathered 15 children with nine different women, DMX’s money issues largely stemmed from unpaid child support, but he also failed to pay income taxes, and both of these issues would land the rapper in prison and rehab on more than one occasion.

The combination of child support payments and back income taxes also left DMX deeply in debt. In fact, some estimates put DMX’s net worth at the time of death at more than $1 million in the red. However, as with other famous musicians, DMX’s overall net worth also included extensive recording and publishing royalties—valued at an estimated $17.7 million—so even though DMX’s estate will have to pay off his massive debts, there will likely be a fairly significant sum left for the late rapper’s children to inherit.

That said, on top of his failure to manage his finances, DMX also failed to create an estate plan. And as we’ll see below, this lack of planning has already ignited a court battle among the late rapper’s many potential heirs. Even worse, the rap icon’s lack of planning will likely mean that his fiancée, Desiree Lindstrom, the mother of DMX’s 15th child, son Exodus Simmons, will most likely inherit nothing from her late fiance’s fortune.

A Family Feud Kicks Off
Although Desiree and DMX were in a relationship for seven years and raising their son together when he died, the two were never married. In an attempt to establish a claim to his estate, shortly following DMX’s death, Desiree petitioned the New York Supreme Court in an attempt to be legally declared his “common-law” spouse. But the court denied her request, which isn’t surprising given that New York hasn’t recognized common-law marriage since 1933. Had her request been approved, state law would give Desiree priority to control DMX’s estate as its administrator.

In light of the court’s ruling, Desiree will likely have zero say in how DMX’s estate is managed, and unless his other children consent, she likely won’t inherit any of his money either. And seeing that a court battle is already brewing among DMX’s oldest children over the administrator role, it’s doubtful that Desiree will be at the top of their minds when it comes to dividing up their late father’s assets.

Just a month after DMX’s death, five of his adult children petitioned the Westchester County Surrogate’s Court seeking to be named administrators of their late father’s estate. According to the New York Daily News, the first filing was made by DMX’s daughters Sasha Simmons and Jada Oden on May 10, while DMX’s three adult sons with Tashera Simmons—Xavier, Tacoma, and Sean—filed their petition to be appointed administrators on May 10.

Because DMX was unmarried and died without a will, New York law stipulates that his assets are to be equally divided among his 15 children. However, it’s unclear just how much wealth there will be to go around after all of DMX’s debts to the IRS and other creditors are paid off.

In their court filings, his daughters estimated the worth of DMX’s estate at less than $50,000, while his sons put the value at less than $1 million. Media reports of DMX’s net worth at death also vary widely, but they all show him deeply in the red. Celebrity Net Worth, for example, puts his net worth at negative $1 million, while MoneyInc estimates his total net worth was a whopping $10 million in the red.

The Fight To Control DMX’s Artistic Legacy
If DMX was so deeply in the hole, you might wonder why his children would be in such a rush to be named administrator of his estate. While each of DMX’s children stand to inherit an equal share of his assets under the law, his older kids are likely vying for the administrator role in order to gain control over the estate’s future earnings.  Upon his death, Billboard estimated that DMX’s total music and publishing royalties were worth $17.7 million, and given the rap star’s popularity and extensive catalogue, those assets are likely to steadily increase in value as the years go by.

Whoever is eventually appointed to administer DMX’s estate will not only be paid a commission, but more importantly, that person will also be in charge of making all of the estate’s future business and financial decisions. Furthermore, the administrator will also be in charge of reviewing and approving the claims of competing heirs. With such power and money on the line, it’s not surprising so many of DMX’s children are jockeying for the administrator role.

Unfortunately, as we’ve seen with both Prince and Aretha Franklin, such family disputes can last for years, tearing the family apart, costing the estate millions in legal fees, and exposing the family’s private lives to tabloid headlines. And in the end, the court may decide to avoid causing a family squabble by appointing a neutral third-party administrator to manage DMX’s estate, leaving a total stranger in control of his life’s work.

A Needless Tragedy

The saddest part of this whole situation is that virtually all of the conflict, expense, and trauma that DMX’s loved ones are likely to endure could have been easily prevented with straightforward estate planning. Using revocable living trusts, for example, DMX could have ensured that his children and fiancée would have immediate access to his assets upon his death or incapacity, avoiding the need for court involvement altogether and keeping the contents and terms of his estate totally private.

At the same time, using special asset protection trusts, DMX could have named a person, or persons, of his choice—rather than a person chosen by the court—to manage his music and publishing assets upon his death, thereby ensuring DMX’s artistic legacy is honored and preserved in the exact manner the rap legend would want. Furthermore, DMX could have used asset-protection planning to minimize his tax liability and shield his recording and publishing royalties from creditors in order to maximize his estate’s future revenue potential and guarantee his loved ones a source of income for generations to come.

The Power Over Life and Death
Finally, DMX’s story highlights the vital importance of incapacity planning. Estate planning is about more than planning for your eventual death; it’s also about planning for a potential incapacity from accident or illness.

In DMX’s case, his incapacity was brought on by a cocaine-induced heart attack, and he lingered in a coma for a week before being removed from life support. Because he didn’t have any planning in place, DMX’s mother, Arnette Simmons, was reportedly put in charge of making all of DMX’s medical decisions, including the ultimate decision to remove him from life support. And as we reported last week, this is the same woman who is said to have abused DMX when he was a child.

While DMX reportedly reconciled with his mother in recent years, he may have preferred to have someone else—like his fiancée Desiree—in charge of making life and death decisions for him. Additionally, although DMX’s mother and children were reportedly cordial with Desiree while he was hospitalized and did allow her to visit him, because they weren’t married, his family could have just as easily denied Desiree the right to see DMX during his final days. DMX could have prevented all of this with proper estate planning.

Through a medical power of attorney, DMX could have granted an individual of his choice, such as his fiancée, Desiree, the immediate legal authority to make decisions about his medical treatment in the event of his incapacity. And with a living will, DMX could have provided detailed guidance about how his medical decisions should be made during his incapacity. Such guidance could include instructions for everything from who should be allowed to visit him in the hospital and what kind of food he would want to specifying if and when he would want life support removed.

While advance healthcare directives like medical power of attorney and a living will are the foundation of any incapacity plan, for truly comprehensive incapacity planning, your estate plan may also require other planning vehicles, such as a durable financial power of attorney and living trusts. Meet with us, your Personal Family Lawyer® for support in putting in place an incapacity plan that’s right for your particular situation.

Learn from DMX’s Mistakes
Regardless of your financial status, planning for your potential incapacity and eventual death is something you should take care of immediately, especially if you have children. As we saw with DMX, you never know when tragedy may strike, and through estate planning, you can save your family from needless disputes, expense, and embarrassing public exposure.

Beyond just passing on your material assets to your loved ones when you die, estate planning is also critical to ensure you’ll be properly cared for in the event of your incapacity from illness or injury. And when done right, estate planning doesn’t just help you plan for incapacity and death, but makes your life better as well by giving you the peace of mind of knowing you’ve made the right legal and financial decisions for yourself and those you love.

Whether you already have an estate plan created or nothing at all, meet with us, your Personal Family Lawyer®,to discuss the specific planning strategies best suited for your asset profile and family dynamics. With our guidance and support, we can ensure that your loved ones will stay out of court and out of conflict no matter what. Contact us today to schedule an appointment.

This article is a service of Sahmra A. Stevenson, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $450 session at no charge.

Legendary hip hop artist DMX—born Earl Simmons—passed away on April 9 at age 50 after suffering a massive heart attack a week earlier at his home in White Plains, New York. The heart attack was reportedly triggered by a cocaine overdose on April 2, which left the rapper hospitalized in a coma. After a week of lingering in a vegetative state, his family made the decision to remove him from life support.

Despite selling more than 74 million albums and enjoying a wildly successful career in both music and movies, DMX, who died without a will, left behind an estate that some estimates report being millions of dollars in debt. Even though DMX likely died deeply in debt, just weeks after his passing, multiple members of his family, which includes 15 children from nine different women, petitioned the court seeking to become administrators of the late rap star’s estate.

While DMX’s estate may currently be in the red, his loved ones are presumably fighting over the right to control the rap icon’s recording and publishing royalties, which will likely be a lucrative source of future income. In fact, following his death, Billboard reported that DMX’s total royalties, which include the release of a posthumous album, master recording royalties, and licensing opportunities, are worth an estimated $17.7 million.

With so much wealth at stake and so many children, DMX’s failure to create an estate plan will likely mean his loved ones will be stuck battling each other in court for years to come. And perhaps no one stands to suffer more than DMX’s fiancée, Desiree Lindstrom.

DMX and Desiree, who were engaged in 2019, had been together for seven years, and she gave birth to his 15th child, a boy named Exodus Simmons, in 2016. However, because the two were never married and DMX did not create any estate planning providing for her, Desiree will likely inherit nothing from her late fiance’s fortune.

A Common Problem
While DMX’s case is certainly tragic, the lack of estate planning is all too common among famous musicians—Prince, Jimi Hendrix, and Bob Marley all died without a will. More recently, the legendary “Queen of Soul,” Aretha Franklin, who died in 2018, left behind four different handwritten wills, and more than three years after her death, her four adult sons are still fighting each other in court over her estate.

We cover DMX’s story and others like it in hopes that they will inspire you to do right by your loved ones by creating a proper estate plan. Death comes for us all, often when we’re least expecting it. And without any planning in place, you are forcing your loved ones to endure a costly, possibly conflict-filled, and in all cases, an unnecessary legal process resulting in the loss of wealth and assets you’ve worked so hard to create.

Furthermore, estate planning is crucial even if you have far less wealth than the late rap icon. After all, given DMX’s lucrative recording and publishing royalties, his children will likely still receive an inheritance, while similar estate planning failures would almost certainly wipe out a smaller estate.

With this in mind, we’ll discuss DMX’s estate planning mistakes and how those errors have impacted his family, his fortune, and his end-of-life medical treatment. From there, we’ll explain how proper planning could have spared DMX, his kids, and his fiancée from their tragic circumstances, and then we’ll outline the steps you can take to make certain that your loved ones never have to endure such a dire outcome.

From Fame And Fortune To Debt and Prison

Emerging on the scene in the late 1990s, DMX quickly became one of rap’s biggest stars, cranking out chart-topping hits like “Party Up” and “X Gon’ Give it to Ya.” Between 1998-2003, DMX cemented his legendary status in hip hop, with an unprecedented string of five consecutive number-one albums which would earn him three Grammy Awards. From there, DMX parlayed his success in the music biz into an impressive career in movies, starring in a number of hit films, such as Romeo Must Die and Cradle 2 The Grave.

While DMX experienced amazing success in his professional life, his personal life was plagued by serious financial and legal struggles as well as substance abuse. Although his albums earned him more than $2.3 million between 2010 and 2015, DMX filed for bankruptcy in 2013, claiming to have just $50,000 in assets and owing more than $1 million in debt to numerous creditors. The bankruptcy court, however, denied DMX’s claim, leaving him on the hook for his debts.

The majority of DMX’s money problems were caused by the fact that he fathered so many children with so many different women, each of whom relied on the hip-hop icon for financial support. DMX married his childhood friend Tashera Simmons in 1999, and they had four children together and were married for nearly 15 years until their divorce in 2014. However, DMX had numerous affairs during their marriage, some of which resulted in children.

In 2004, DNA testing confirmed that DMX fathered at least one child from these extramarital affairs, and this led to the rapper being sued for unpaid child support. As a result, DMX was ordered to pay $1.5 million to the child’s mother, Monique Wayne.

But that wasn’t the end of DMX’s problems with child support. In his 2013 bankruptcy filing, DMX listed back child support as his priority debt, totaling roughly $1.24 million to multiple women. In addition to outstanding child support payments, DMX’s financial troubles were exacerbated by his failure to pay income taxes, which eventually landed the rap star in prison.

In 2017, DMX pled guilty to $1.7 million in tax fraud, and the court ordered him to spend a year in prison. Although DMX was released from prison in 2019, at the time, he still owed $2.3 million in income taxes. In September 2020, the IRS filed a tax lien against DMX and ex-wife Tashera Simmons to collect the remaining debt, and upon his death, DMX reportedly still owed the IRS nearly $700,000, according to Radar.

A Traumatic Childhood Leads to Addiction
DMX’s troubles as an adult likely stemmed from his abusive childhood. Born to a teenage mother, the rapper was reportedly beaten by both his mother and her many boyfriends as early as age 6, according to the New York Post. At age 10, DMX was kicked out of school for fighting, and a short time later, he was ordered to spend 18 months in a home for troubled youth. By age 14, DMX was living on the streets, where he was first introduced to drugs. 

In a 2020 interview with podcaster Talib Kweli, DMX said that his issues with addiction started at age 14, when his 30-year-old rap mentor offered him a joint that DMX didn’t know was laced with crack cocaine. Following that experience, DMX said he began using drugs as a coping strategy to deal with his pain, and sadly, the habit followed him until his final days.

Over the years, DMX entered drug rehabilitation on multiple occasions (his latest rehab stint was in 2019), and the Grammy winner was even forced to cancel an entire tour due to his recurring battles with addiction—which would ultimately claim his life. Toxicology reports showed that the DMX died of a cocaine-induced heart attack that cut off circulation to his brain, leaving the rapper brain dead. Although DMX’s heart was revived at the hospital, he remained in a coma until his mother ultimately made the decision to remove him from life support a week later.

A Family Feud KIcks Off
While DMX’s mother, many of his children, his fiance, and ex-wife were able to visit him in the hospital before he passed away and were all reportedly on good terms, just a few weeks later, several of those same relatives were in court battling one another for control of the late rapper’s estate. And as we’ll see next week, with so many potential heirs and such big money on the line, the fight over DMX’s estate is likely to get quite ugly.

Don’t let what happened to DMX’s family happen to your loved ones. Whether you have no estate plan at all or have a plan that needs review—even one created by another lawyer—contact us, as your Personal Family Lawyer®, today. With our support and guidance, we can ensure that your loved ones will always be provided for and stay out of court and out of conflict no matter what happens to you.

Next week in part two of this series, we’ll discuss how DMX’s lack of estate planning created a nightmare for his family, and then we’ll outline the steps you can take to ensure your loved ones don’t suffer a similar fate.

This article is a service of [name], Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

It’s sad but true that many pets end up in shelters after their owner dies or becomes incapacitated. In fact, the Humane Society estimates that between 100,00 to 500,000 pets are placed in shelters each year for exactly this reason, and a large number of these animals are ultimately euthanized.

Unfortunately, the law considers pets to be nothing more than personal property just like cars, furniture, and electronic devices. So unless you take the proper steps to include your pet in your estate plan, your beloved companion could end up in a shelter or worse following your death or incapacity.

In light of this cold reality, here we’ll detail how you can use estate planning to ensure your pets receive the best possible care when you’re no longer able to care for them yourself. Consult with us as your Personal Family Lawyer® to put the proper legal documents in place to provide for your furry friend’s future care.

Select A Caregiver For Your Pet

Selecting a trustworthy caregiver is the first—and most important—step in protecting your pet via your estate plan. You might assume that your kids, relatives, or friends will step in and care for your pet should something happen to you, and these folks may even tell you as much in conversation. But properly caring for most pets is a major commitment of time, energy, and finances, so you shouldn’t rely on simple promises to ensure your pet’s future is secure.

It’s best to come up with a list of potential candidates, and then have a frank talk with each of them, discussing the extent of care your pet requires and whether they have any personal issues (allergies, housing, children, other pets, etc) that might prevent them from providing the proper care.

If you don’t know any suitable caregivers, charitable groups, such as the Safe Haven® Surviving Pet Care Program, can provide for your pet in the event of your death or incapacity.

Create A Detailed Care Plan

Once you’ve chosen your pet’s caregiver—along with one or two alternates in case something happens to your top choices—then you’ll need to outline all of your pet’s care requirements. At the very least, your caretaking instructions should include your pet’s basic requirements: dietary needs, exercise regimen, medications, and veterinary care. But if you are like most pet owners, you probably want your pet to receive more than just the bare necessities, so consider leaving instructions for any other special treatment you want your furry friend to receive.

From special grooming arrangements and yummy treats to weekly visits to the park and favorite toys, your care plan can provide your beloved companion with whatever lifestyle you wish for them. Finally, don’t forget to address what you want to be done at the end of your pet’s life, such as burial, cremation, and/or memorial services.

Funding For Your Pet’s Continued Care
When determining how much money to put aside for your pet’s care, you should carefully consider the pet’s age, health, and special care needs. Remember, you’re covering the cost of caring for the animal for the rest of its life, and even basic expenses can add up over time.

In addition to the bare necessities like food and vet visits, make sure you also calculate the costs for any special treatments or services you include in the care plan and leave enough money to pay for them. And if you end up leaving more money behind than needed, you can always name a remainder beneficiary, such as a family member or charity, to inherit any funds not spent on the pet.

Create A Pet Trust
Since pet care can be quite complicated and costly, the best way to ensure your wishes are properly carried out is to set up a pet trust. While it’s possible to leave care instructions and funding for your pet in a will, a will cannot guarantee the new caregiver will use the funds properly—or even that they will care for your pet at all.

In fact, a person who’s left their pet in a will can simply drop the animal off at a local shelter and keep the money for themselves.  A pet trust, on the other hand, allows you to layout legally binding rules for how the funds in the trust can be used. Additionally, pet trusts can cover multiple pets, work in cases of incapacity as well as death, and they remain in effect until the last surviving animal dies.

To ensure your wishes are accurately carried out, you should name someone other than the caregiver as a trustee. This way, the trustee can manage the funds and make sure they are used exactly as spelled out in your care instructions.

Do Right By Your Furry Family
Although leaving assets in a pet trust is fairly simple, creating a properly drafted trust that includes all of the necessary terms can be quite complex. To this end, reach out to us, as your Personal Family Lawyer,® for support in creating your pet trust.

We can make sure that your pet trust contains all of the necessary elements to guarantee that your beloved companions will continue to receive the love and care it deserves no matter what happens to you. Contact us today to schedule an appointment.

This article is a service of Sahmra A. Stevenson, Office Without Walls™, and Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized, and informed about how to make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this session at no charge.

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Recent advances in digital technology have made many aspects of our lives exponentially easier and more convenient. But at the same time, digital technology has also created some serious complications when it comes to estate planning. In fact, if you haven’t properly addressed your digital assets in your estate plan, there’s a good chance that most of those assets will be lost forever when you die.

Without the proper estate planning, just locating and accessing your digital assets can be a major headache—or even impossible—for your loved ones following your incapacity or death. And even if your loved ones can access your digital property, in some cases, doing so may violate privacy laws or the terms of service governing your accounts. Plus, you may also have certain digital assets that you don’t want your loved ones to inherit, so you’ll need to take steps to restrict or limit access to those assets.

There are a number of special considerations you should be aware of when including digital assets in your estate plan, and this series addresses each one. Last week in part one, we discussed some of the most common types of digital assets and the current legal landscape governing what happens to those assets upon your death or incapacity. Here, we offer some practical tips to ensure all of your digital assets are properly included in your estate plan, so these assets can provide the most benefit for your loved ones for generations to come.

5 Steps For Including Digital Assets In Your Estate Plan

If you’re like most people, you most likely own numerous digital assets, some of which may have significant monetary value and some which have purely sentimental value. You may also own digital assets which hold no value for anyone other than yourself or have certain digital property that you’d prefer your family and friends not access or inherit when you pass away.

To ensure all of your digital assets are properly accounted for, managed, and passed on exactly the way you want, take the following five steps:

1. Create a detailed inventory with access instructions: Start by creating a list of all the digital assets you currently own. Then, for each asset on your list, provide detailed information about where the asset is stored online and how it can be accessed, including all of the relevant login information and passwords. If you have a lot of different accounts, password management apps, such as LastPass, can help simplify this effort.

If you own cryptocurrency, prepare detailed instructions about how to access your cryptocurrency, and ensure that one or more people you trust know that you have a cryptocurrency and how to find your instructions. Because accessing cryptocurrency requires correct usernames and private keys, as well as knowledge of wallets, digital exchanges, and other storage devices, leaving a detailed “How To” guide may be essential to ensure your loved ones can access these assets.

After you’ve created your inventory and access instructions, store these documents in a secure location with your other estate planning documents, and ensure your fiduciary (executor or trustee) and your lawyer (if you have an ongoing relationship with a trusted lawyer), knows how to access these documents in the event something happens to you. Back up any digital assets stored in the cloud to a computer, flash drive, or other physical storage devices to make them easier to manage. And remember to update your digital-asset inventory regularly to account for any new digital property you acquire or accounts you close.

2. Add your digital assets to your estate plan: Once you’ve created your inventory of digital assets, you’ll need to add those assets to your estate plan. As with any other asset you own, you’ll typically pass your digital assets to your loved ones through either a will or a revocable living trust. Consult with us, your Personal Family Lawyer® about which strategy is best suited for your particular situation.

From there, specify in your will or trust the person, or persons, you want to inherit each asset and include detailed instructions for how you’d like the asset to be managed in the future if that’s an option. Additionally, some assets might be of no value to your family or be something you don’t want them to inherit or even access, so you should specify that those accounts and files be closed or deleted by your fiduciary.

Do NOT provide the specific account info, logins, or passwords in your estate planning documents, which can be easily read by others. This is especially true for wills, which become public records upon your death. Keep this information stored in a secure place, and let your fiduciary know how to find and use it. Consider using a digital asset management service, such as Directive Communication Systems, to support you with securing and managing all of your digital assets.

It’s also a good idea to include terms in your estate plan allowing your fiduciary to hire an IT consultant if necessary, especially if your fiduciary doesn’t have a lot of technical knowledge. This will help them manage and troubleshoot any technical challenges that come up, particularly with highly complex assets like cryptocurrency.

Alternatively, if your fiduciary isn’t particularly tech-savvy, you can designate a separate co-fiduciary just to manage your digital assets, known as a digital executor. A digital executor is someone who’s specifically tasked with accessing and managing your digital assets upon your death, and this might be a smart move if you have a lot of digital property or you own highly encrypted digital assets like Bitcoin.

Meet with us, your Personal Family Lawyer® to help decide if you should have a digital executor or would be better off using a different arrangement to manage your digital assets.

3. Limit access: In your estate plan, you also need to include instructions for your fiduciary about what level of access you want him or her to have. For example, do you want your executor or trustee to be able to read all of your emails, texts, and social media posts before deleting them or passing them on to your loved ones? If there are any assets you want to limit and/or restrict access to, we can help you include the necessary terms in your estate plan to ensure your privacy is fully honored.

4. Include relevant hardware: Your estate plan should also include provisions for any physical devices—smartphones, computers, tablets, flash drives—on which the digital assets are stored. Having quick access to this equipment will make it much easier for your fiduciary to access, manage, and transfer the online assets. And since the data can be wiped clean, you can even leave these devices to someone other than the person who inherits the digital property stored on it.

5. Check service providers’ access-authorization tools: Review the terms and conditions for each of your online accounts. Some service providers like Google, Facebook, and Instagram have tools that allow you to easily designate access to others in the event of your death. If such a function is offered, use it to document who you want to access and manage these accounts when you pass on.

Just make certain the people you named to inherit your digital assets using the providers’ access-authorization tools match those you’ve named in your estate plan. If not, the provider will probably give priority access to the person named with its tool, not your estate plan. 

Don’t Neglect Your Digital Assets In Your Estate Plan

As technology continues to evolve and our lives become increasingly digitized, it’s vital that you adapt your estate planning strategies to keep pace with these changes. As your  

Personal Family Lawyer®, we can assist you in updating your estate plan to include not only your traditional wealth and property but all of your digital assets as well.

As your Personal Family Lawyer®, we are keenly aware of just how valuable your digital property can be, and our estate planning strategies are designed to ensure your digital assets are preserved and passed on seamlessly to your loved ones in the event of your death or incapacity. Furthermore, we can accomplish all of this while ensuring you have the maximum level of privacy, and you stay in full compliance with the latest laws and regulations governing the ever-changing digital universe. Contact us today to get started.

This article is a service of Sahmra A. Stevenson, Office Without Walls™, and Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized, and informed about how to make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this session at no charge.

Schedule your call https://calendly.com/officewithoutwalls/15min