Olympia Estate Planning

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Thursday, July 17, 2014

Should online accounts die when you die?

Should your emails, web albums and other online accounts die when you do? Or should you be able to pass them down to a family member much as you would a house or a box of letters?
Associated Press
WASHINGTON - 

Should your emails, web albums and other online accounts die when you do? Or should you be able to pass them down to a family member much as you would a house or a box of letters?
A leading group of lawyers says that families should immediately get access to everything online unless otherwise specified in a will. They are urging state lawmakers to enact their proposal so loved ones don't get shut out as American lives move increasingly online.
"Our email accounts are our filing cabinets these days," said Suzanne Brown Walsh, a Cummings & Lockwood attorney who led the effort. But "if you need access to an email account, in most states you wouldn't get it."
The Uniform Law Commission, whose members are appointed by state governments to help standardize state laws, on Wednesday endorsed the plan for "digital assets." It would give loved ones access to -- but not control of -- the deceased's digital accounts unless a will says otherwise.
To become law, the legislation would have to be adopted by each state's legislature. It would trump "terms of service" agreements by tech companies that prohibit people from accessing an account that isn't theirs.
"This is something most people don't think of until they are faced with it. They have no idea what is about to be lost," said Karen Williams of Beaverton, Oregon, who sued Facebook for access to her 22-year-old son Loren's account after he died in a 2005 motorcycle accident.
Facebook and other tech companies have been reluctant to hand over their customers' private data, and many people say they wouldn't want their families to have unfettered access to their life online. But when confronted with death, families say they need access to settle financial details or simply for sentimental reasons.
What's more, certain online accounts can be worth real money, such as a popular cooking blog or a gaming avatar that has acquired certain status online.
Privacy activists are skeptical of the proposal. Ginger McCall, associate director of the Electronic Privacy Information Center in Washington, said a judge's approval should be needed for access, to protect the privacy of both the owners of accounts and the people who communicate with them.
"The digital world is a different world" from offline, McCall said. "No one would keep 10 years of every communication they ever had with dozens or even hundreds of other people under their bed."
Many people assume they can decide what happens by sharing certain passwords with a trusted family member, or even making those passwords part of their will. But in addition to potentially exposing passwords when a will becomes public record, anti-hacking laws and the terms of service agreements prohibit that.
Several tech providers have come up with their own solutions. Facebook, for example, will "memorialize" accounts by allowing already confirmed friends to continue to view photos and old posts. Google, which runs Gmail, YouTube and Picasa Web Albums, offers its own version: If people don't log on after a while, their accounts can be deleted or shared with a designated person. Yahoo users agree when signing up that their accounts expire when they do.
But the courts aren't convinced that a company supplying the technology should get to decide what happens to a person's digital assets. In 2005, a Michigan probate judge ordered Yahoo to hand over the emails of a Marine killed in Iraq after his parents argued that their son would have wanted to share them. Likewise, a court eventually granted Williams, the Oregon mother, access to her son's Facebook account, although she says the communications appeared to be redacted.
Williams said she supports letting people decide in their wills whether accounts should be kept from family members.
"I could understand where some people don't want to share everything," she said in a phone interview this week. "But to us, losing him (our son) unexpectedly, anything he touched became so valuable to us." And "if we were still in the era of keeping a shoebox full of letters, that would have been part of the estate, and we wouldn't have thought anything of it."
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Follow Anne Flaherty on Twitter: https://twitter.com/annekflaherty

Tuesday, July 1, 2014

HOW NOT TO INVEST YOUR IRA IN REAL ESTATE

From the Slott Report, America’s IRA Experts.
TUESDAY, JUNE 17, 2014

Real estate is an allowable investment inside an IRA, but you’re going to have to find an IRA custodian willing to do it. A recent Tax Court case showed how not to invest IRA money in real estate.
An individual wanted his IRA to directly buy a piece of undeveloped land, but the problem was his brokerage firm (the IRA custodian) had a policy of not allowing clients to invest in "alternative investments" which included real estate. 



Instead of moving his IRA money to a different IRA custodian who would allow real estate as an investment, his idea was to have the money wired from his current IRA directly to the seller and have the property titled in the name of his existing IRA. He was essentially trying to get around his current IRA custodian’s policy of prohibiting real estate as an investment. The IRS found out and said he took a taxable IRA distribution because his IRA never actually bought the land. He disagreed and they ended up in court.



The Tax Court ruled that he owed income tax on the IRA distribution. The Court said the IRA custodian didn’t have to offer real estate as an investment, even though the law allows it. As a result, the individual was not acting as an agent for the custodian when he bought a property with his IRA money and tried to title it in the IRA custodian’s name. 



The case highlights that if you want to have your IRA buy a piece of real estate directly, you first have to find an IRA custodian who will allow it. Even then, you should work with an advisor and custodian who have experience with all the issues involved in IRA owned real estate. 



Maybe a safer way to invest IRA money in real estate is to do it indirectly by investing in either a limited partnership or limited liability company that invests in real estate (that you don’t control or use personally). A better idea might be to invest in a Real Estate Investment Trust (REIT), which is publicly traded and has a readily ascertainable value. Always work with an experienced advisor before having your IRA make the investment.

- By Joe Cicchinelli and Jared Trexler


Link to article: http://www.theslottreport.com/2014/06/how-not-to-invest-your-ira-in-real.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+theslottreport%2FjgTs+%28The+Slott+Report%29