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What Happens to My “Digital Assets” If Something Happens to Me?

What Happens to My “Digital Assets” If Something Happens to Me? In the last 20 years, the concept of “digital assets” has emerged as our world has been taken over by the likes of web domains, e-mails, Facebook, and Twitter. The term “digital assets” can include many different things: your ownership and intellectual property rights in social media accounts, your access to online bill payments or money processing, your rights to use software or listen to music, and your ability to view e-mails and other similar information. These digital assets primarily take on these different forms: (1) information stored on computers, tablets, and smart phones, such as photographs, videos, e-mails, and music; (2) online accounts and social media, such bank accounts, bill pay, accounts with Amazon.com, Pay Pal, or e-Bay, and subscriptions to online magazines as well as Facebook, LinkedIn, and Twitter; and (3) storing files in “the cloud”. This has created a whole new area in our laws, and with technology ever changing, our legal system is frankly struggling to keep up. These “digital assets” impact almost everyone in our modern society. As a result, there have been several cases in recent years about who has access to these digital assets when someone passes away. This blog discusses a recent Arizona statute that addresses these issues and also gives the readers some practical advice about how to handle their own digital assets. Arizona’s New Digital Assets Statute In an effort to address these concerns, Arizona legislators passed a new law dealing with digital assets that went into effect in May, 2016 (“Act”). Although the Act also deals with the ability of trustees, conservators, and agents under a financial power of attorney to access digital assets, this blog focuses on the sections of the Act that deal with a personal representative’s right to access such assets. First, some comments by the drafters of the Act are helpful in understanding the framework of the Act.  The Act creates in “three-tier priority system”. First, the Act “gives top priority to a user’s wishes as expressed using an online tool.” Second, if there is no online tool in effect, then the Act “gives legal effect to the user’s directions” in a will or trust.  Third, if no such directions exist, then “the terms of service governing the account will apply.” In general, when a personal representative is making a request for disclosure from Outlook or Facebook, Twitter, he or she must follow the terms of the Act. Under the Act, “if a...

Three Ways to Transfer Your Business

Three Ways to Transfer Your Business Let me paint the picture. You are in your 60’s or early 70’s after having working the last 20-30 years building up a successful family business and you are trying to figure out a way to slow down and enjoy some of the fruits of your labor. Some of your family members work in the business, and others do not want to have anything to do with it. In addition, some of your children have the ability to run the business, but you are not quite ready to turn it over to them yet. As you sip on your Corona on the beach in San Diego, you wonder: How do I this? Where do I start? For most business owners, their family business is a huge part of the value of their estate. Yet, so many business owners fail to properly plan for the transfer of their business as part of their estate plan. However, this type of planning is crucial for the success of your business. If you have not already drafted your business succession plan as part of your overall estate plan, then I strongly recommend that you start the process when you get back from the beach in August. With proper planning, you can probably get the documents drafted and in place by the end of 2017 if you start when you get back. But don’t delay, as these business succession plans have a way of working their way back onto the “back burner” when things start to pick up again in late August or early September. Although there are other options, the three most common options are discussed below.  Sell Your Business Outright One way to transfer the business to your children is to sell them your interest, outright, during your life. If you sell it to them, then you will need to sell for fair market value, or else the transfer may be considered a part sale – part gift, which could trigger gift taxes with the IRS. The terms of the sale are also important. For an outright sale, there are essentially two options. First, there can be a cash sale where the children pay the full purchase price at the time of closing, typically with the assistance of bank financing. Second, the buyer pays off a seller carry-back note over time. For either option, it is important that the cash flow of the business be able to support the bank note payment or the seller-carryback note...

Should My College Student Have a Power of Attorney?

Should My College Student Have a Power of Attorney? Recently, my son graduated from high school, and, after a few trips with his friends this summer, he will be heading off to college in the fall. In addition to getting him all up to date with his dental work and eyeglass prescription and purchasing some new clothes and other items for his college dorm room, I am preparing certain legal documents for him in case of an emergency. This blog discusses the legal documents that I recommend that parents obtain for their college-age students before they head off to college. I recommend these documents because, without them, you, as parents, may not have any legal rights for your children over 18 years of age, even if they are covered under your insurance and you are supporting them financially. Recommended Documents for Your College Student The following is a list of the documents that I recommend for college-aged students: Durable General Powers of Attorney. This financial power of attorney gives the student’s parents the authority to sign legal documents on behalf of the student and also gives the parents access to direct transactions for the student’s financial accounts. In general, I recommend that the student sign a durable general power of attorney to cover all financial matters. In addition, in some cases, I also recommend that the student sign the form provided by the financial institution for the student’s accounts. Having this legal authorization in place will give you authorization to assist your student. This is particularly important if your student is studying abroad for a semester or two. Health Care Powers of Attorney and Living Wills. These documents allow you, as the parent, to make medical decisions for your student if he or she cannot make them. In case they are ever needed, make sure that these medical powers of attorney also have mental health care powers within them. Without a health care power of attorney, you may be precluded from making medical decisions for your student in an emergency situation. A Living Will, or a similar document, is the student’s wishes for his or her end of life decisions. HIPAA Forms. HIPAA is the acronym for the Health Insurance Portability and Accountability Act, which provides that your student’s medical records and information is protected from third parties. This is generally a good thing, except when the third party is the parent. This form authorizes medical care providers to release and share medical information about the students with their...

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