Estate Planning for Digital Assets

woman on a laptopSince it is associated with the harsh realities of loss and death, estate planning is an unpopular topic. All too often we hear from people who do not have an estate plan that is updated with their current goals, needs and desires.

In recent years, technology has created new challenges for estate planning. With the need for estate planning for digital assets, several existing estate plans, wills and trusts in the United States, are not equipped to handle the complete range of assets owned by individuals. Below, our estate planning attorneys in Newport Beach will examine the finer points of estate planning for digital assets.

Estate Planning for Digital Assets

Digital assets are not storage devices such as smart phones and computers — but rather the information and property that is stored online. As technology has evolved, so has the way we store and access digital property. For instance, your Gmail, Facebook, Yahoo, Twitter, or Instagram accounts could contain sensitive financial information, important photos and videos, or communications. Additionally, you may also own hundreds of dollars worth of digital property like movies, music and art on apps like iTunes and Google Play. Other digital assets such as BitCoin, frequent flier miles, and blog revenue all have significant financial value – and thus need to be planned for accordingly.

What Makes Estate Planning for Digital Assets so Challenging?

The laws associated with estate planning are way behind technology, resulting in many estates not being adequately prepared to handle digital assets. These digital assets are usually secured by the use of an online login and password, which is not traditionally contained in a will or trust. In order for the estate to gain access to the accounts, the individual must record the accounts and the relevant login information. In many cases, digital assets are non-transferable upon death, so the account or property cannot be left to your heirs. This stipulation is usually included in the terms of service agreement, when the account was initially set up. Since most persons do not read the agreement, they are surprised that they do not in fact own their account, but only have a lifetime lease to use the account.

Some recent state laws which have the Revised Uniform Fiduciary Access to Digital Assets Act as their base, allow fiduciaries to gain access to these assets, once specifically stated in the trust, power of attorney document. Many estate plans treat digital assets the same as other assets, but they need to be addressed specifically in any estate planning or advanced directive document.

Most wills and trusts require updating, so that they include explicit directions about digital assets. Additionally, folks should have detailed accounting of their online accounts and access information. If there is no comprehensive list, then it will be difficult for an estate to properly manage the accounts. Some instructions that you may leave could be the closure or deletion of their credit card or banking account, memorializing of their Facebook account, or the assigning of a business website to their heirs to ensure continuity. Although there has been gradual change in the laws that provide access to digital assets, there has to be advance planning to ensure the proper management of digital assets, and their dispersing in the case of incompetency or death. Advisers are able to add value by encouraging the discussion of the topic with their clients, ensuring that the proper documents are updated by the estate planning attorney. This will allow for the proper handling of the digital assets of the client, in the case of death or incapacity.

Estate Planning Strategies With New Laws on the Horizon

man signing documentIn recent years,  Republicans have been calling for a repeal of many aspects of the Federal estate tax system. Donald J. Trump’s election and the Republican sweep of both Houses of the Congress have made the possibility of sweeping estate tax reform very high over the coming two years. All eyes are now on potential legislation that could affect the estate and gift tax system in 2017. These factors bring to the fore the significance of being flexible as you do your estate planning and proceeding.

Here are several strategies that are worth looking into while waiting for potential Congress legislative action.

Charity Gifts

Under the existing law, charity gifts are deductible as “itemized deductions.” However, the new President wants to introduce more dramatic limits on such items. If you take your gifts to charity in 2017, you stand to benefit from a much larger tax break.Generally, you may also want to have your deductions accelerated into the current year. For the same reasons, you also ought to use the lifetime gift exemption of $5.49 million.

Installment Sales

An installment sale made in favor of a grantor trust is a financial strategy that works best with real estate that is income-producing, family business interests, or other more liquid type of investments that have growth potential in the future. Because for income tax purposes the trust acts as a “grantor trust”, it doesn’t realize capital gains tax at the transfer time.
Family Limited Partnerships

In view of the legislative uncertainty, a family limited partnership (FLP) is still a viable strategy for tax minimization. A supplementary benefit of setting up or establishing a family limited partnership and getting it funded with assets is that it affords you the opportunity for getting discounts on any wealth transfers made to family members.
Upstream Gifting

Under the existing taxation, a step-up in the cost of an asset gets granted when that person passes away. This means that the recipient family members can dispose the asset without incurring any form of capital gains tax. In case the US estate tax gets repealed, this benefit will most likely be eliminated. You may consider giving your appreciated real estate assets to a trust that has been specifically designed to allow such assets to be included as part of a less affluent estate that belongs to your parents.

Charitable Remainder Trusts (CRTS)

In setting up Charitable Reminder Trusts, the trust creator retains the right to receive a fixed percentage or annuity of the trust assets yearly. At the expiration of the CRT term or when the creator passes on, the CRT assets balance pass to chosen charitable organizations that can also include a private family foundation. As the CRT period beneficiaries are non-profit organizations, the sale of any assets is not subject to capital gains.

Given these unfolding dynamics on the political-legal front, the US real estate sector, similar to other critical areas like health care has a dark cloud of uncertainty that hovers over it. All of the above strategies need to be implemented with care. But one thing is clear, big change is coming and you should plan your real estate accordingly. Until all the intentions of the new administration become very clear, many taxpayers are opting to adopt a wait-and-see attitude in regard to estate tax planning over the next couple of months.

Exercises for Aging Muscles

2 senior citizens riding bicyclesThe human body normally undergoes a number of changes as it ages. For instance, the body starts to produce less testosterone.
Since this is a steroid hormone responsible for muscle growth, the body gets weaker and weaker with time. People who are over 65 years old are usually less active and may start to lose both their balance and flexibility in addition to reduced strength. This means they may start to become dependent on other people. Fortunately, there is a way for elderly people to improve their fitness, and remain independent in every aspect of life for a long time. That is to exercise on a regular basis.

Exercises for the Elderly

It is important to note that older folks are not seeking bulging muscles or to bench hundreds of pounds of weights at the gym. They just want to maintain their muscle mass, improve their flexibility and endurance as well as maintain their balance. The exercises they perform, therefore, may not necessarily be high intensity. The CDC recommends a minimum of 150 minutes of exercises per week for people who are over 65 years old. The following are some great exercises for the elderly:

i) Cycling

This can be done on a stationery bike at home or at the gym, or with a normal bicycle. The exercise should be done at least twice a week for a minimum of half an hour. While cycling at a slow to moderate pace throughout the workout session is beneficial, the best results can be obtained when periods of low intensity cycling are alternated with periods of moderate to high intensity cycling. The benefits are; improved muscle strength, improved endurance, better flexibility and improved body balance. The elderly can also burn calories and lose weight through cycling.

ii) Walking

There is a common saying that movement is life; if you stop moving, you die. This statement holds true, especially when it comes to senior citizens. When you stay in bed for more than 12 hours, sit on the couch for another 12 hours and repeat the same cycle day after day, the flexibility of your joints will reduce. Furthermore, you will also lose your balance. This means that you will become dependent on other people when you want to stand up, get out of bed or go to the bathroom. To ensure you live a healthy life, it is important you go for 15-minute walks at least twice a day; in the morning and in the afternoon. This will help to maintain your balance and improve the flexibility of your joints. These walks can also improve your strength.

iii) Swimming and Zumba

Swimming is a low-intensity exercise with lots of benefits. Ideally, you should go swimming at least twice a week. If you are tired of swimming, you may want to try zumba. These exercises are great for your strength, balance and flexibility.

The elderly should avoid high intensity exercises because their cells and tissues do not regenerate as fast as they used to. Light to moderate intensity exercises for a maximum of 30 minutes daily are enough to ensure the elderly live a healthy life.

As estate planning attorneys, we like to help out the senior citizen community whenever we can. That’s why we often blog about topics like senior discounts, arthritis, senior healthcare and more! If you have a topic relating to senior citizens that you’d like us to write about, please send us an email to


Attractions for Seniors in Corona

A woman purchasing an apple at a farmers marketThe city of Corona, California is home to a diverse community of around 160,000 residents. Situated near the Santa Ana Mountain Range, just East of Disneyland, it offers an excellent escape and an opportunity to slow down. From outdoor activities to shopping and dining, there’s plenty for visitors to enjoy, whether it’s for a few hours or a few days.

Corona is an excellent place to visit at any age! Seniors can take advantage of the discounted rates for admission at some of the attractions, while others are already budget friendly for everyone. Whether you’re seeking to soak in the soothing water of the mineral spas, sip on wine, or explore the history and culture of the region, you likely won’t be disappointed by the best attractions in Corona, California.

Here are some of the best budget friendly attractions that offer discounts to seniors:

Corona Heritage Park and Museum

The Corona Heritage Park and Museum celebrates the history and culture of the city, and includes the grounds of what was once the largest lemon ranch in the state. A small museum houses interesting historical and cultural artifacts, and visitors are welcome to enjoy a self-guided tour. Explore the grounds, which consist of 2,000 acres of lemon groves. The Company Store gift shop offers candies and collectibles, including plenty of lemon shaped trinkets and souvenirs. The museum is open to visitors Tuesday through Saturday, from 10 am to 2 pm, and admission is free. It is closed on holidays.

Glen Ivy Hot Springs

Relax and rejuvenate at Glen Ivy Hot Springs. This facility is a must visit for tourists in the area. It offers an array of spa treatments, wellness classes, massages, and access to mineral pools, mud baths, and more. The mineral springs that provide the soothing waters make this an ideal destination to unwind for an afternoon. Guests are encourages to make a reservation for a soothing massage or one of the many restorative spa treatments offered by the skilled and professional staff. Seniors age 65 and over can enjoy a 10% discount on the Taking the Waters Admission. This includes access to 19 different pools, lounge areas, the gardens, steam rooms, saunas, and much more.

Tom’s Farms

Perfect for the young and young at heart, Tom’s Farms offers up something fun for everyone. What started out as a roadside farm stand many years ago has become a premier family destination in the Riverside area, with a variety of activities that guests of all ages can enjoy. Take a ride on the old fashioned carousel or the miniature steam train, or kick back and relax with a cheese and wine tasting. Special events are held throughout the week including craft shows and live musical performances. Be sure to pick up  fresh foods in the farmers market, and sit down to an authentic Mexican meal at Senor Tom’s restaurant. Some of the activities at Tom’s Farms cost just a few dollars, while others are free to enjoy.

As estate planning attorneys in Corona, we take it upon ourselves to inform our clients, friends, and social media followers about all of the great attractions of Corona where seniors can get a deal! We hope you enjoyed our list, and urge you to stay tuned for more to come!

Is the New Healthcare Bill Bad for Seniors?

close up image of a doctor's lab coat and stethoscopeA nation is often defined by the way it takes care of its elderly citizens. Despite being opposed by numerous consumer’s groups,
hospitals, and doctors, last week the United States House of Representatives narrowly approved a new Health Care bill that will negatively affect the lives of millions of its most vulnerable people. The AARP, which has over 38 million members, says the results of this new bill will be catastrophic for all Americans, especially senior citizens.

According to the AARP the new American Health Care Act has several major flaws that will be detrimental to the elderly.

The first is that the new bill allows the imposition of an age tax. Insurance companies may now charge people aged 50-64 as much as five times the amount as younger people. It will also lessen the tax credits that help older people afford their annual coverage. According to the Congressional Budget Office (CBO), the age tax could boost their annual premiums to $13,000. Most elderly people exist on a meager income and can’t afford that.

The bill also allows states to rely on high risk pools with massive premiums to cover those with preexisting conditions. When this method was tried before, it put such a financial strain on states that benefits had to be limited and enrollment had to be capped at a certain number of people.

Additionally, it will allow insurers to charge higher premiums to people with preexisting conditions. Currently, there are over 25 million Americans aged 50-64 with conditions such as cancer, heart disease, diabetes, etc. Under the old law, they were protected from paying higher rates than those without preexisting conditions.

Furthermore, the new legislation will endanger crucial health benefits. In certain states, insurers could opt out of many important benefits such as hospitalization, prescription drug coverage, emergency services, mental health services, preventative care and even chronic disease care.

The cost of many prescription drugs has more than doubled since 2006. This new legislation does absolutely nothing to lower the prices. It would, however, give a $200 billion present in tax breaks to drug and insurance companies who are already making a ton of money. Right now, over 17 million low income residents with some type of disability rely on Medicaid. Millions of low income seniors will be at risk of losing all access to essential long term supports and services if this bill passes.

If this Health Care bill is allowed to go through unchallenged, millions of U.S. citizens will be without any health insurance at all. The CBO predicts that up to 24 million people could lose their health insurance coverage in just ten years. As estate planning attorneys in Orange County, we can’t help but think that there are better ways to take care of our senior citizens. Under the new legislation, premiums will rise dramatically, Medicaid will be weakened, billions of dollars will be given to insurance companies, prescription drug costs will continue to rise, and millions of sick and elderly people may lose any coverage they have.