What happens to my Facebook, Email, Website when I die?

When we think about estate planning, we immediately think about how our wills and trusts will protect our physical possessions, our home and our money. But what about your Facebook account, your email, your twitter accounts or even your web site? (For those Facebook addicts.... who will make sure your Farmville crops get harvested when you are no longer able to tend your farm?) But seriously, even if you are not hip with the latest social media, almost everyone has some forms of online account such as email, bill pay, maybe even a dating site membership. All of these accounts have user i.d.'s and passwords. Does anyone else know this information or at least where you store this information in the event that something happens to you?
It is not always easy for someone to just call up Yahoo and ask them to close out an email account. Many internet providers consider this information to be private and will not just send you the passwords without legal authority. Google mail requires a copy of a death certificate, copy of a power of attorney or birth certificate and an email sent front the account you are trying to close. With MySpace, the account dies with the person.

So what is the solution? Keep a file of all your log in information on a flash drive or stored on your computer somewhere but name the file something unique... not "passwords". Give a copy of this to a trusted individual, your agent, successor trustee, executor, family member, etc. When you add log in information or change passwords, be sure to update that file as well. If you prefer not to give this file to anyone else, keep it in a safe or safe deposit box, but be sure to let someone know it exists, and where to find it.

Having a Power of Attorney is a great tool as well, but most powers do not specifically provide for the power to access internet and/or email accounts. Therefore proper drafting is important. I have created a provision specifically for just such a situation for my clients.

There are also companies out there, such as Legacy Locker, which acts like a safe deposit box for your log-ins, account information, etc. They also provide personalized instructions to survivors as to how you want your online identity handled.

Websites are another issue you may have to consider. If you have a website, what happens to it when you die? You can actually leave your website to a beneficiary - especially if your website provides you passive income, this could be a valuable asset you will want to protect with your estate planning.

So as you can see, estate planning has a variety of new issues to consider when planning, so meeting with a trust and estate attorney who is current on the latest web based media will put your estate plan one step ahead of the rest.


When we think about estate planning, we immediately think about how our wills and trusts will protect our
So as you can see, estate planning has a variety of new issues to consider when planning, so meeting with a trust and estate attorney who is current on the lastest web based media will put your estate plan one step ahead of the rest.

For more information, call Amy Alvis, Esq. at Alvis Frantz and Associates A Professional Law Firm (925) 516-1617, email at info@alvisfrantzlaw.com

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Are you moving? Don't forget to pack your estate plan... or should you?

One question people ask me when getting ready to set up their estate plan (trust(s), wills, powers of attorney, etc) is what happens if they move. It is really a good question.

States typically have different laws. Some states in the U.S. have adopted (either in its entirety or with some modifications) what is known as the "Uniform Probate Code" which basically means they all have the same laws with respect to wills, trusts, probates, etc. California is not one of them. But don't despair, this does not necessarily mean that if you move out of California (or have just moved to CA) you will have to start all over again with your estate plan documents.

A trust is esentially a contract, and contracts that are deemed valid in the state and at the time in which they were created, are enforceable in other states. So your trust for example, is still a valid document if you move out of the State. Wills are also treated the same. However, the real issue is that a trust is used to hold property by a trustee for the benefit of the beneficiaries.... so if you move, what property is the trust protecting now? If you no longer hold any assets in California, what you really need to do is to update your trust to ensure it holds all of your newly acquired assets and reflects the disposal of previously held assets.

It would also be advisable to check with an attorney in your new home state to see if any amendments are required to provide you with further protection in that state. For example, one state may have different STATE inheritance taxes than another and therefore added protections may need to be included in your trust.

Additionally, you may have named someone as a successor trustee/executor in your original trusts/wills and now they live 3000 miles away and the reality of it, is that it may no longer be a practical choice. In this case, amendments will need to be made to re-name a new successor trustee/executor.

Then there is the question of your Powers of Attorney both for your finances and for your health care. As mentioned above, the person you have previously named may logistically no longer be the best choice for your agent(s). For example, say your brother is named as your health care agent and lives back in California and you now live in Texas. You get in a terrible car accident and are in a coma and your leg is severly injured and may need to be amputated right away to save your life. Your brother can not get to you in time to be able to tell the doctors that, because you are a professional dancer and it is your passion above everything else in the world, you would rather risk your life than lose a leg, so with no agent available to act on your behalf, they chose to ampute.

And what about your children? In your will, you are able to name someone who will be their guardians if both parents die. If you really start to get settled in your new hometown, do you want your children to have to move to live with who had named as guardians? Maybe, maybe not. It is just one more thing to consider when you move and decide what part of your estate plan documents needs updating.

In many instances, a few simple updates are sufficient. Sometimes it may be easier (but yes, a bit more costly) to do what is called a "restated amendment" to your original trust. This is basically like starting from scratch but keeping the original name and date of your first trust so that all of your assets do not need to be retitled again.

For additional questions about what to do with your estate plan if you move, call Amy Alvis at the law offices of Alvis Frantz and Associates at 925-516-1617 or email us at info@alvisfrantzlaw.com

Now What.... Estate Tax in Limbo

Okay, so it seems like there's a big hiccup in the proposed extention of the estate tax law. Basically congress failed to finalize any changes in that tax law. It is expected that they will resume after the holidays but until then, we are all in planning limbo.

What is also at issue is if/when they do enact a new tax law, will it be applied retroactively. The court have upheld a retroactive application of income tax laws, but the issues as it pertains to estate tax has not yet been faced.

Here's the rub: See, typical tax issues are "regulations" and not "statutes". They are handled differently. Courts can can "interpret" statutes to tell us how they apply. On the otherhand, the IRS can simply issue a formal "Notice" explaining that the tax consequences of a certain type of transaction that is under review and then later apply a "regulation" to apply.

Now with respect to the Federal Estate Tax issue, it is NOT a "regulation", but rather an actual "statute" so some elected officials see it as importants (like a statute) where others are much more casual about it like they are with "regulations".

For example, on December 4th, the House of Representatives passed an Estate Tax Bill which provides that the current law would remain in effect. The House did not including it in any bills to be passed by the senate by the end of the year. (Senate is busy with health care, go figure)

So, maybe people think no estate tax is a great thing if you die in 2010. The grass is not always greener though and kids, don't think that this is the perfect opportunity to wait until Jan 1 to pull the plug on the heart and lung machine.

As it stands today, we are back where we started.... no estate tax for 2010 and in 2011 it will revert back to the old rate of 55% for estates over $1 mill (all the more reason to rejoice in this horrible houseing market, no?)

For two more days at least, married couples (with proper trust planning) can shelter up to $7 million ($3.5 million for individuals). Anything over that is subject to 45% estate tax. So when heirs sell inherited property, little or no capital gains tax is due on the increase in value that occurred during the lifetime of the original owner because the inherited asset is "stepped-up" in value based on the value at the date of death.

So what does this mean if there is a new estate tax law passed later in 2010 and it is applied retroactively. Say mom and dad pass in January, you file to estate tax return, but then the law is enacted in June, now you have to go back and refile and pay taxes. What if all the money has since been dispersed, invested, spents, etc. The trustee alone may be personally liable to pay for any owed estate taxes.

So it may be a good time to plan properly to protect your heirs during this time of tax limbo.

THE FUTURE OF THE ESTATE TAX EXEMPTION

I just finished reading a a Wall Street Journal article by Laura Saunders on the issue of what will happen to the Estate Tax next year the and consequences thereof. The current Federal Estate Tax exemption ($3.5 million) is set to "disappear" next year. (The current law is expiring). Most people would say "Great! So it doesn't matter how much I own, if I die next year there will be no estate tax due for my kids." Unfortunately, there may be much bigger problems to consider.

The current estate tax law was enacted by Congress back in 2000. It increaed every year and it is currently at $3.5 million per person ($7 million per couple). In otherwords, if you and your spouse own $7 million in assets and died in 2009, you can pass all the assets to your heirs and they wont owe any estate tax - which is at 45%.

Under the current law, the will be no federal estate tax at all for 2010 and in 2011 it will follow the current lifetime gift tax exemption of $1 million per individual ($2 million for a couple). In the above situation, if the above couple died in 2011 with an estate of $7 million, $5 million would be taxed - if the rates stays at 45% - then the heirs would owe $2.25 million on their inheritance.

It is believed among most in the industry that Congress will step in very soon and extend the current exemption because of the collateral tax damage this "lapse" can cause. It is really an issue of what is called a "step-up in cost basis". This means that when someone inherits an asset, the value of that asset is "stepped up" to the current value at the time of inheritance (date of death). Without a "step-up", the asset would retain the original value from when the original owner acquired it. If the estate tax goes away, so will this "step-up in cost basis".

Here's an example:

Let's say your mother leaves your son a stock that she bought in 1970. She paid $5 for the stock but tody it is valued at $75. Under the current tax law, if mom died today, when your son inherits the stock, the value is $75. So if next year your son sells the stock and it sells for $80, he will only have to pay capital gains tax on the $5 profit. Without the "step up", the original cost of $5 for the stock would transfer to your son (called a "carry-over basis"), so when he sold the stock at $80, he would now have to pay capital gains tax on $75 profit. Now if you apply that same principal to something larger, like a home purchased for $50k in 1970 and is valued at $750k today, it is clear how much of a tax burden this will place on your son. This is also why gifting an asset versus allowing it to pass through inheritance is not always the best option.

There are many possible solutions being proposed in congress right now. Something may be passed by the end of the year, something may happen later and be applied retroactively, it is definately an area to be aware of and if you haven't developed your estate plan, yet, it is definately a time to get things done and protect your estate not only from probate, but also to attempt to minimize the tax burdens on your heirs while we still have the ability to do so.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.


Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including attachments, was not written to be used and cannot be used for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. If you would like a written opinion upon which you can rely for the purposes of avoiding penalties, please contact us.

Mediation: What is it & what Is It good for?

I spent 40 hours last week in a training program, the Essentials of Mediation & Divoce Mediation in Novato, CA and came away with some amazing tools to branch out into the field of Mediation. Now this is not to be confused with Meditation at all, but I realize that meditation prior to a mediation is probably not such a bad idea.

As a Mediator, it is imperative to maintain neutrality throughout the process in order to effectively facilitate a collaborative dispute resolution (i.o. help people come up with a solution to conflict).

Mediation has been defined as "a cooperative dispute resolution process in which an impartial third person facilitates communication between the parties to help them reach a mutually accceptable resolution that is better than their alternatives"

Mediation is an alternative form of dispute resolution. It is alternative to:

• Litigation
• Arbritration
• Direct negotional between two parties alone
• Settlement conferences with attorneys
• Special Masters
• Private Adjudication
• Self-help
• Doing nothing.

Mediation is not theraphy or relationship coaching but here's what it provides:

Mediation is:

• Voluntary
• Informal
• Private
• Confidential
• Decision making is done by the parties (not the mediator)
• Focus is on the parties needs and interests (not necessarily the law)
• Emphasized mutual problem solving
• Tends to be more efficient and less costly than litigation
• Parties work towards a mutual gain rather than a win/lose (as in litigation)

When is Mediaton appropriate:

• When there are multiple issues
• When the parties want to control the outcome (not a court or arbitrator)
• When the conflict involves communication problems
• When the parties have or had a relationship
• When the parties want to save time, money and stress (avoid litigation)
• When resolution is possible without necessarily assigning "fault" or "liability"
• When personal/emotional issues exist
• When the parties perceive the facts differently
• When there are creativve possibilities for resolution

When may Mediation not be appropriate:

• When one or more parties want a definite ruling on the issues in a conflict - vindication.
• When one or more parties will only be satisfied if the other parties suffer - revenge.
• When the parties have "nothing to lose" by going forward to litigation or some other process - or "little to gain" by going to mediation.
• When one or more parties is not participating in the process in good faith
• When distrust is so hight that the parties have no faith in the viability of a potential agreement.
• When a significant power imbalance exists and connot be addressed constructively
• When a party is unable to effectively participate in the process due to physical, mental or emotional incapacity.

Here are just a few types of matters that mediation can help resolve conflicts:

• Divorce (property, custody, visitation, support, etc.)
• Probate
• Trust administration conflicts
• Employment
• Discrimination
• Community issues (neighbor disputes, etc.)
• Business transactions
• Business/Partnership dissolutions
• Real Estate transactions
• Administrative agency conflicts

To find out more visit http://www.eastcountymediation.com/ or call the Law Office of Amy L. Alvis at 925-478-6435

Chosing Guardians

During one of my recent client consultations we discussed the difficulty for them to chose their guardian(s) for their children. Whether or not to include a spouse, who should be alternates, what if one of the couples chosen get's divorced, etc. Choosing guardians is probably the hardest decision for parents to make in the estate planning process.

In my research about a way to help "simplify" this process for my clients, I found a great article written by an attorney in Thousand Oaks, CA. I don't want to improperly reproduce her article without her permission, but I would like to recap some of her wise and helpful ideas.

First, she wanted to remind parents that when naming guardians, we are not just choosing who will take care of your children when you die, but who will take care of your children if you become incapacitated or incompetent.

It was noted that parents should really provide as much detail as they desire about not just who will raise their children, but how. Basically what this will allow for example, is if college education is very important to you then you can express that the guardians strive to ensure that your children go to college. If your family religion is very important to you, you can express that your child continue to be exposed to and participate in their religion. You can be as detailed as you want to ensure that your children continue to be raised with the same morals and values you would instill in them if you were still there to raise them.

She went out to list out four basic steps for parents to chose a guardian.

The first step was to "Make a List"

It was recommended that the list be long, including anyone who you think might be a good guardian. This would mean, people you would chose over the foster system basically. In doing this, also list those you would absolutely NEVER want to raise your children. You can specifically exclude someone if you want. If you are having trouble making a long list, be sure to come up with at least 3-4 though. This list can include family members, friends, colleagues, etc. especially if they have similar values to you. Remember, the person(s) who takes over as guardian for your children does NOT need to be the same person who acts as trustee over their money, so don't limit your list because of financial considerations.

The article also discussed the difference between Temporary & Permanent Guardians and your ability to chose both if that feels better for you.

Temporary guardians are basically for a certain defined time period. They may be appointed to care for your children if you become temporarily disabled or even for a short time to finish the school year out before having to move to a new city, state or country even.

Permanent guardians would be the ones to care for your children until the age of majority when you pass away. (You don't need to have separate Temporary and Permanent Guardians named, but in some situations, you may feel it would be best)

A new concept she discussed was a "Guardianship Panel" which is basically a collection of people you name (friends, family, maybe even a doctor) who will decide who would be the best caretaker for your children. Personally, I don't think this is the best "first" option as it can lead to a lot of disagreements. I think as a last resort if all named guardians are not able to serve or chose not to serve, it might be okay.

The second step was to write down "What Matters Most". Factors she states to consider about a prospective guardian are:

• maturity
• patience
• stamina
• age
• child-rearing philosophy
• presence of children in the home already
• interest in and relationship with your children
• stability
• ability to meet the physical demands of child care
• presence of enough "free" time to raise children
• religion or spirituality
• integrity pets
• potential conflicts of interest with your children
• willingness to serve
• social and moral habits and values
• marital or family status
• willingness to adopt your children

I would write these in order of importance, then see how each potential guardian measures up.

Once again, don't let money issues guide you. For example, let's say you have been a stay-at-home mom and want to be certain your children continue to haven a parent at home full time if you should die. But what if your top choice for a guardian works full-time and her children are in day care? What you can do is properly prepare financially with life insurance and investments to be able to provide adequate financial support so that the guardian you want to raise your children is able to stay at home and raise your children.

The third step was to "Match People to Priorities"

After you measured everyone up based on the above factors, narrow your list down to 3-4. Rank those in order, and there you go!

Now that you have your list, as I would ask my clients, ask yourself: what if that couple you name first should get divorced, what if one of them dies? Are you willing for either of the two to raise them on their own, or would you rather move down the list to your next choice of guardian? In some cases, it may be best to only name one person than that person and their spouse.

The final/fourth step "Make it Positive"

This will be an opportunity for parents to really share their thoughts, hopes, and fears with each other. Hopefully the two of you can grow from the process. Remember as well, when you make your wishes know, and detail them out, and share them with your intended guardians for your children:

• The relationship between all parties may increase
• As parents, you have a mutually focused idea of what you want for your children and can share this with your named guardians.
• You will know what you want to achieve with your children while you are still there for them.

So once it is all said and done, you will have "secured your peace of mind" and will rest easier at night knowing your children will be cared for according to YOUR wishes, whatever may come your way.


Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

So what is "Estate Planning"?

Estate planning involves people and your assets. It addresses your future needs in case you ever become unable to care for yourself as well as when you pass away.

Estate planning is actually very broad and does not just include preparing a trust and/or a will. It is really part of comprehensive financial life planning which should include: investment and retirement planning, mortgage planning, long-term care and other related medical planning, tax planning, and insurance planning.

When planning your estate it is highly recommended that you work with a network of professionals (legal, financial, insurance, tax) that will work together on you behalf so that your plan is cohesive.

Through estate planning, some things you can determine are:

• How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
• When and under what circumstances it makes sense to distribute your assets during your lifetime.
• How and to whom your assets will be distributed after your death.
• How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
• How will care for your minor children and who will manage their finances.
• How to reduce or eliminate estate taxes.
• How to provide financial support for your family after your death.
• How to protect your assets from liability during your lifetime.

So yes, your Trust and/or Will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.

Working with Amy Alvis and Living Trusts by Amy, you will work hand in hand with professionals to help identify your specific estate planning needs, the goals and values that are important to you, and work those together to create a customized estate plan that in specific to you.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.