Your Digital Assets – Are You Covered? Part 2
Last week I raised the legal issues faced by digital assets – specifically property rights. Who owns my Facebook account after I die? Who can access that account when I am alive but incapacitated? Courts are often wrestling with these issues for the first time. State legislatures have not, in many cases, modified the laws to keep up with technological changes. There have been a number of cases around the country in which family members of a deceased online account holder have fought to gain access to that account, some successful and others not. Many online companies have established rules regarding access. For example, Facebook allows already confirmed friends to continue to access a deceased person’s account. Yahoo’s policy is that the account expires when the accountholder dies. Google provides that accounts can be deleted if they have not been accessed for a period of time. But, is that the last word? Do the companies get to lay down the rules with regard to access and ownership? Not necessarily. One Michigan judge directed Yahoo to hand over a deceased Marine’s emails to his parents, who argued that he would have wanted them to see the emails. Some people have
Your Digital Assets – Are You Covered?
Technology has allowed us as a society to go places and do things never before imagined. But, it has created issues and problems that, likewise, we could never have imagined. Much has been written about the problem of texting while driving or “sexting” by minors. Our laws have been struggling to keep up, because they were never written with computers, cellphones and the internet in mind. Criminal laws are often the first to be modified. But, because technology allows us to create and preserve information in many different formats, property rights must be addressed as well. The term often used to refer to what technology allows us to create is “digital assets”. What exactly are digital assets? They include emails, email accounts, digital music, books, photographs and video, social network accounts, domain registrations, Domain Name System (DNS) service accounts, file-sharing accounts, blogs, listservs, financial accounts, banking accounts, web-hosting accounts and online accounts. As technology continues to advance, new digital assets are created. And unlike paper, these assets can’t simply be thrown in the trash bin. The volume of digital assets can dwarf that which is put to pen and paper. This leads to legal issues in the realm of
Turning Life Insurance into Long Term Care Insurance (Part 2)
So your parent has an insurance policy that they can no longer afford and they are in spend down mode to qualify for Medicaid. Cashing in the policy and spending the proceeds is necessary before Medicaid will kick in. But last week I mentioned another option, something called a life settlement. Here’s how it works. The parent, as the owner, sells the policy to a third party for cash. To be clear, the death benefit won’t be paid to the children any longer. The third party investor will become the owner and beneficiary. But, the senior can very often receive more money than he/she would by surrendering it for the cash value. Typical life settlement payments range from 30 to 60% of the face amount (death benefit). Term insurance policies, which have no cash value, can also be sold through life settlements. The cash received can help pay the cost of care for the senior. This might allow Mom or Dad to stay in an assisted living setting or at home longer before money runs out and a move to a nursing facility becomes necessary. It could also help get a family through a Medicaid penalty period resulting from
Turning Life Insurance into Long Term Care Insurance (Part 1)
For 20 years now, I’ve been guiding clients and their families on the spend down of assets before applying for Medicaid. Successful applicants must spend down just about everything before getting Medicaid approval, including any life insurance policies that have cash surrender value. For many seniors the cash surrender value of their policies is a fraction of the death benefit value, typically 10%. Cashing in the policy for a few thousand dollars, in some instances, causes the loss of a death benefit of $50,000 or more. Certainly, the insurance companies don’t mind. Pay them years of premiums and then cancel the policy before they ever have to pay a claim. Even where Medicaid isn’t yet a consideration, many seniors on fixed incomes let their policies lapse because they simply can’t afford them any longer. Hundreds of millions of dollars in death benefits are never claimed. When we come across these scenarios, where the “spread” between the cash surrender value and death benefit is large, we explore ways to keep the policy in force. Sometimes children or other family members with the financial means to do it, can purchase the policies for the cash value. The senior gets the cash which must then
The Aide that Moved Right in (Part 2)
Last week I was telling you about Sue, who called about her 90 year old aunt, Amelia. Amelia had hired a home health aide through what she thought was a home health agency. Sue recently learned that the aide had taken Amelia to an attorney who prepared legal documents designating the aide as her agent under power of attorney, health care representative and executor of her will. What can or should Sue do? Amelia won’t show her the documents or tell her anything more. Amelia wants Sue to leave it alone. Sue asked me about guardianship. That’s a tough call. Is Amelia incompetent or simply exercising poor judgment? Everyone has the right to make bad decisions. I told Sue that based on what I was hearing, it is very likely that an attempt to declare Amelia incompetent will fail. It probably will only serve to make Amelia angry and cause her to push Sue away. That’s not so say that in a month or 6 months or a year, that Amelia’s mental state won’t deteriorate to the point that a guardianship may then work. But, who knows whether the aide will have taken all Amelia’s money by then. Let’s go back to the
The aide that moved right in
Sue called regarding her 90 year old aunt, Amelia, who had a series of strokes. For the past 6 months she had a live in aide assisting her but it was what Sue told me about that aide which was so troubling. Amelia happened to mention that the aide took her to see an attorney who prepared legal documents for her, naming the aide as her agent under power of attorney, representative under her health care directive and executor of her estate in her will. Amelia refused to let Sue see the documents so she does not know whether the will leaves her assets to the aide. Sue called to find out what she can or should do. I asked Sue where she found the aide. She said her aunt found the aide through an agency. But, then she told me that the agency has refused to do anything about the situation. That didn’t sound right to me but then Sue told me that Amelia pays the aide directly. She paid the agency $6000. That told me what I needed to know. Amelia didn’t go through a traditional home health agency in which the aide works for the agency. She hired a