The Pitfalls of the E-Z, D-I-Y Online Will Form – From A Recent Florida Supreme Court Case

Bench along the Maigue

Bench along the Maigue

In a recent issue of the ABA Journal, under “Trusts & Estates,” Debra Cassens Weiss penned [wait – can I use that verb for an e-zine article?] “Estate Dispute Caused by ‘E-Z Legal Form’ is a ‘Cautionary Tale,’ says Justice.”  The Justice referred to would be a member of the Florida Supreme Court in the opinion rendered in Basile v. Aldrich on March 27, 2014.  The really basic problem with the “will” executed by the decedent is that it was missing a very elementary part – a residuary clause.

I often tell clients in an initial interview that since we don’t know a couple little details like . . .  when we’re going to die and what we are going to own at the time of our death, a residuary clause can be very helpful indeed.

The basic problem with the E-Z legal form will was that it wasn’t much of a will, in fact it was what might be called half-baked.  It contained a listing of specific devises (gifts) to particular people, but didn’t contain a residuary clause to cover anything and everything else not listed specifically.  So Ms. Aldrich’s will was effective for the specific devises listed and ineffective for the remainder of her estate.  As a result, there was a determination of partial intestacy due to what is known as after-acquired property because there was no residuary clause to give any unnamed property to a named person.  So what Ms. Aldrich got was some of her property going via her will and the remainder of her property passing via Florida’s law of intestacy.

What governs much of the law in this field is testator intent – what did the person making the will intend?  Unfortunately, these forms can unduly complicate this determination and can lead to a myriad of unintended consequences.  How can we tell what someone intended when there is such a mess?

While most all of us appreciate simplicity, what looks good on paper to someone who isn’t familiar with the basic components of a valid will can lead to disastrous results.  I got a call once from a prospect who told me “I want a one-page will.”  I responded “you can write it yourself.”  Colorado law recognizes that frontier relic known as the holographic will, which is

a testamentary instrument that is written entirely by the testator in his own handwriting and signed by him and that even if unattested is usually recognized as a valid will in most jurisdictions.

For research for this post, I did look at a couple online purveyors of cheap will forms.  They had nice pictures and some good tips, but really didn’t explain much about what a will is and how it works. But wait, maybe they’re relying on the conventional wisdom that “everyone knows what a will is.”  Not so fast!  The basic problem is that when it comes to writing a will, most of us may not want to use those same simple provisions that are “generally applicable” to everyone and therefore of particular value to no one.  A testimonial given for one of these document generation services described how easy the process was.  Caveat emptor: There is easy and then there is simple.  Will easy work for you as you think it will?  How will you know?  The basic problem with the document generation services is that the human element (communication) is left out.  There is no interviewer asking you questions you might never have thought of or explaining how some common things actually work. But wait, there’s more.  . . . !  I also noted a satisfaction guarantee, lifetime customer support, and a $50,000 guarantee. I read the fine print of the guarantee, typos and all, and noted that the company retains the right to change the guarantee at any time.  Hmmm….

In my 2013 April Fool’s post, I included some fairly hokey pictures of “zombies” along with a serious set of questions about these types of services, which I likened to “zombie law practice.”  I recently received a call from a prospect who asked me point blank – why should I hire you instead of going online for one of these services? So I will include just a couple points from that zombie post of mine:

  • it may not be state (Colorado) specific, but based on another state’s law (how do you know?)
  • it may be designed to apply to a one-size-fits-all category and you’re not sure what your size is. . . .
  • you might zero in on a known problem and not consider its relationship to other issues
  • you might end up “fixing” one problem only to create a difficulty in another area
  • how will you know if you’re asking the right question or getting a sound answer?
  • can you accurately consider the cost of the “downside” for doing nothing, or addressing the situation by handling it yourself?

We lawyers understand that we often bore our clients with describing the important processes we go through to arrive at a particular result.  I know I am one of them.  But we also need to explain the process so that the client can see and appreciate the value inherent in it, how that process is going to get them to where they want to be (or out of where they don’t want to be).  This is why just filling out some cheap form is often like shooting yourself in the foot (or worse).

One last thing that I don’t mention, but that several of my colleagues would respond with is – pay us now or pay us later . . .  to clean up the mess resulting from the badly drafted “planning documents.”  Sadly, some of these messes can’t effectively be cleaned up – the harm to relationships can be irreparable.

Each of us is free to have a will or no will at all, but if you decide to write your own or go online for a “cheap and easy” will, wouldn’t you rather know that you are making an informed choice among viable alternatives?  Under the Colorado Rules of Professional Conduct, attorneys must provide clients informed consent to a particular course of representation.  This means an attorney must educate the client about alternatives so that the client can make an informed decision about how the client wants to proceed.  You won’t get any of this with a “cheap and easy” will drafting service!

 ©Barbara Cashman  2014   www.DenverElderLaw.org

Baby Boomers, Longevity and . . . Marital Agreements

 

La Mia Famiglia - Gava e Fornelli

La Mia Famiglia – Gava e Fornelli

You might be puzzling over my title – but rest assured that with the divorce boom among baby boomers, there will undoubtedly be more marital agreements being written for middle class or moderate income couples.  Most marital agreements (a/k/a “prenups”) are relevant for estate planning purposes and so most of them tend to be drafted by estate planning attorneys and not so many by family law attorneys.  And in case you’re wondering, there is no “standard form” for such an arrangement as the circumstances are as varied as the couple entering into the agreement.

Historically, marital agreements were more along the lines of blueprints for divorce. Some still retain that character, but well-drafted agreements tend to address the marital arrangement as it progresses through time, what a divorcing spouse will be entitled to after five years, ten years of marriage and of course – what those inheritance rights are.  The interesting fact about these agreements is that many couples will get them prior to the marriage or soon into their marriage and then will simply forget about the document and often draft other legal arrangements or take actions inconsistent with the agreement.  A will’s provisions can have interesting effects on the marital agreement and marital agreements that are not well-maintained can be problematic on a number of levels.

Last week Jim Bailey, a Denver attorney who litigates marital agreements, presented to the Women’s Estate Planning Council an insightful overview of the new Colorado legislation regarding marital agreements.  You can read the House Bill (13-1204) concerning the Uniform Premarital and Marital Agreement Act here.

In a nutshell, one of the more interesting details for the new law is the specificity of the waiver provision, which states:

If you sign this agreement, you may be:

  • Giving up your right to be supported by the person you are marrying or to whom you are married.
  • Giving up your right to ownership or control of money and property.
  • Agreeing to pay bills and debts of the person you are marrying or to whom you are married.
  • Giving up your right to money and property if your marriage ends or the person to whom you are married dies.
  • Giving up your right to have your legal fees paid.

Colo. Rev. Stat. Ann. § 14-2-309 (West).

Interesting to think about the focus of marital agreements on financial matters as differences over finances is often cited as a major or contributing factor to divorce.  There was also a comment by Jim Bailey about men tending to focus on the assets while women tend to focus on the relationship….

Bottom line to keep in mind is that in the dissolution of marriage context, the domestic relations court will often very carefully review a marital agreement – so if you’re thinking about one, make it good.

      And what about those pesky non-legal considerations for divorcing boomers. . . . ?

Who you gonna call? Who will a divorced person name as their health care agent or agent under a financial power of attorney after they have divorced? Divorce is a death of the marital relationship and while many of us can have amicable breakups and positive relationships, we are made “legal strangers” to a former spouse.  These decisions are important but difficult to consider – who we will choose to help us out in case of emergency?  We will all die someday, but the fact is with increasing longevity, a majority of people – including those youth-glorifying baby boomers – will be disabled or incapacitated for some period during life.  This is one of the biggest reasons to have durable powers of attorney in place – in case you need them.  Estate planning for blended families can be complicated – not the least of which is figuring out what are your individual and common goals and values.  Sometimes the finances are the easy part!

When older adults merge households, there can be a fruitful mix of traditions, with a few challenges mixed in.  If we think of later life as a time of harvest in the autumn, this can assist in imagining what the harvest may hold for us.  I quote from Anam Cara, the late John O’Donohue’s beautiful book:

when it is autumn in your life, the things that happened in the past, or the experiences that were sown in the clay of your heart, almost unknown to you, now yield their fruit.  Autumntime in a person’s life can be a time of great gathering.  It is a time for harvesting the fruits of your experiences.

Anam Cara: A Book of Celtic Wisdom (2008: HarperCollins) at 167.  Bringing in the fruits of harvest, the intended and unintended, the sweet and perhaps the less sweet, can help us understand the aging process not just as the wearing down of the physical being but as the ripening of the soul, as O’Donohue describes so poetically.  Marital agreements and other important documents can help blended families forge a path toward better understanding and maintaining peace.

 ©Barbara Cashman  2014   www.DenverElderLaw.org

More About Colorado’s New Law on Mandatory Reporting of Elder Abuse

Maggie in Marble Snow

Maggie in Marble Snow

To resist the frigidity of old age, one must combine the body, the mind, and the heart.

And to keep these in parallel vigor one must exercise, study, and love.
Alan Bleasdale

I’ll take a look at two questions answered in the new law.  First – who is an “at risk adult” subject to this law, and second – who are the mandatory reporters? Here’s the link from my previous post about the new law.  Our system of anonymous reporting will come to an end as law enforcement agencies will be collecting information and making these reports.  Okay – very briefly, while we’re on the topic of the reports – these will contain the names and contact information of the at-risk elder and the reporter, the identity of any caretaker/caregiver, the name of the alleged perpetrator, along with the nature and the extent of the injuries.  Within twenty-four hours of receiving the report, law enforcement must notify the county Adult Protective Services (APS) or the District Attorney’s office where the abuse or neglect occurred.

To reiterate, the law defines an at-risk adult as “any person who is seventy years of age or older or any person who is eighteen years of age or older and is a person with a disability.”  Colo. Rev. Stat. §18-6.5.102(2).  Person with a disability is defined in  §18-6.5.102(11) as: any person who is impaired because of the loss of or permanent loss of use of a hand or foot or because of blindness or the permanent impairment of vision of both eyes to such a degree as to constitute virtual blindness; is unable to walk, see, hear, or speak; is unable to breathe without mechanical assistance; is developmentally disabled as defined in section 27-65-102(11),C.R.S.; is a person with a mental illness as the term is defined in section 27-65-102(14), C.R.S.; is mentally impaired as the term is defined in section 24-34-301(2.5)(b)(III), C.R.S.; is blind as that term is defined in section 26-2-103(3), C.R.S.; or is receiving care and treatment for a developmental disability under article 10.5 of title 27, C.R.S.

Here’s a quick list of the mandatory reporters according to Colo. Rev. Stat. § 18-6.5-108(1)(a)-(1)(b) who must report such suspected abuse on and after July 1, 2014:

  • Health care providers and other medical personnel including: Physicians, surgeons, physicians’ assistants, osteopaths, physicians in training, podiatrists, occupational therapists, and physical therapists; medical examiners and coroners; registered nurses, licensed practical nurses, and nurse practitioners; Emergency medical service providers; chiropractors; dentists; pharmacists
  • Health care facility and mental health: hospital and long-term care facility personnel engaged in the admission, care, or treatment of patients; psychologists and other mental health professionals; social work practitioners;
  • Clergy members (with exceptions);
  • Law enforcement officials and personnel;
  • Court-appointed guardians and conservators;
  • Fire protection personnel;
  • Community-centered board staff (think senior center or the like);
  • Financial Institutions including: personnel of banks, savings and loan associations, credit unions, and other lending or financial institutions;
  • Care Providers including: a caretaker, staff member, employee, or consultant for a licensed or certified care facility, agency, home, or governing board, including but not limited to home health providers; and a caretaker, staff member, employee of, or a consultant for, a home care placement agency, as defined in Colo. Rev. Stat. § 25-27.5-102(5).

The statute also provides for immunity from prosecution for a reporter (unless the reporter is the perpetrator, co-conspirator or complicitor.

So what happens after a report is made? This will be the subject of law enforcement training and will be interesting to see how the system works.  At this point, it looks like Adult Protective Services and law enforcement agencies will share responsibility for reporting and investigation.  Based on this new law, it is reasonable to assume that the APS reporting will be shifted more to law enforcement in accordance with the goals of the new statute.  It is also worth noting that the definition of “abuse” in 18-6.5-102 is broad and interpreted expansively.

One last point I’d like to share. . . .  An interesting and often overlooked question is what happens to the civil rights of older adults, when as a matter of chronological age and sometimes other circumstances, a person is categorized as an elder and entitled to protections based on their potential status as victim.  Here’s a link to an article by Nina Kohn from 2009 entitled “Outliving Civil Rights.”  Kohn is a law professor and discusses the intersection of constitutional rights and mandatory reporting.  Whether one views these laws designed to protect elders as helpful or paternalistic is a matter of perspective, but she raises interesting questions about the swinging pendulum leaning toward more protections and the dark side of that movement which can involve curtailment of civil rights.

Stay tuned for more on this topic.

©Barbara Cashman 2014   www.DenverElderLaw.org

The Durable Power of Attorney and Financial Abuse of Elders

Four Generations of Family

Four Generations of Family

I’d like to start at the beginning with some terms. I’ve written about them before. . . .

A general durable power of attorney (POA) is an arrangement where one person (the principal) appoints another person (the agent) to act on behalf of the principal regarding matters specified within the scope of the POA.   Under The Uniform Power of Attorney Act, which is Colorado law, powers of attorney executed after Jan. 1, 2010 are by default “durable”  meaning it can survive the disability or incapacity of a principal.  A POA is an important tool people can use to allow others to assist them in the event they need help managing finances.  Another important detail of note is that the POA is also by default a “standing” power.  “Standing” means that the POA can be used as soon as the document is executed by the principal.  This doesn’t mean people rush out to use them.  I usually tell my clients that I hope they never have to use these documents (or more accurately, that their agents will never have to use them) but they are ready to go if needed.  Remember that one of the primary purposes for a durable POA is to keep people out of having to go to probate court for a protective proceeding like a conservatorship. One of my more important questions to a client when considering the use of a POA and who to name as agent concerns trust and accountability.

What is financial abuse of elders?  It can occur on different levels, including; Inadvertent or careless behavior; negligent misuse of a position of responsibility (like agent under a POA); and intentional misuse or conversion of an elder’s money or property.  Colorado’s new law will soon require certain persons to be mandatory reporters of elder abuse.  In Colorado we have AARP ElderWatch, which is a partnership between the Colorado Attorney General’s office and the AARP foundation.  You can get more information about that here.

What are Some Steps toward Prevention?

The National Criminal Justice Reference Service has a good and fairly up to date listing of resources about fraud and financial abuse of the elderly.

It is important to distinguish between types of elder financial abuse: by those scammers who are strangers looking  for easy prey in the form of isolated, lonely, physically or mentally challenged or disabled elders; by adult children, grandchildren or other family members or friends who may be “impatient heirs” who may not be willing to wait until the elder dies to inherit from them.  Temptation is simply too much for many people!

Transparency is another important safeguard for a principal and to help the agent understand there is both assistance and oversight available when needed.  If the agent knows there is likely to be someone “looking over their shoulder” – whether it is another sibling, a professional, or a reporting requirement, this can encourage good habits on the part of the agent that benefit the principal. Other considerations include:

having another set of eyes watching bank and investment accounts

using a professional fiduciary as agent or for bill paying purposes

What makes financial abuse or exploitation of elders difficult to detect?

  • Shame or embarrassment on the part of the elder, particularly when the abuser is a child;
  • Elders often feel a loss of autonomy and have discomfort with vulnerability;
  • Manipulation and Domestic violence type behaviors by person in control of the money; and
  • The fragility of elder’s emotional and physical health.

Elder law attorneys typically have a network of people and both public and private resources that can assist an elder victim of exploitation or abuse.  In a follow up to this post I will talk about the agent’s “job description” and fiduciary duties, along with some ways of detecting elder financial abuse.

 ©Barbara Cashman   2014    www.DenverElderLaw.org

Digital Assets After You’re Gone – Digital Assets in Decedent’s Estates

The Call

 

Part III: This post is about digital assets after you have passed away.  What happens with your digital assets?  This question is simpler to explain (notice I did not use the term “answer”) in the decedent estate administration context, but the answer is a lawyerlike response of “it depends.”

If you would like to view a fun infographic blog post, check out Linda Rosenthal’s post about digital estate planning here.   Okay, let’s start with the basics.

  1. What is Digital Property?

Any online account you may own or any file that is storedon your computer, another device or in the cloud.

2. What might an estate planning attorney want to advise a client about digital assets in the EP context?

Many of us who practice law in this area use a “letter of instruction” as an organizational tool to help a personal representative do their job.  It is not a legal document but rather an organizational document designed to help make the job of the personal representative (PR) easier.  Many people have experience with trying to locate assets, insurance policies, investment accounts, etc., that are nowhere to be found after a person dies.  This is what the letter of instruction is designed to flesh out.  Many people assume that if they have a will or a trust, that this document alone will suffice to guide them to assets.  This is not necessarily so and is often not the case at all.  The will names the PR and describes the assets and property of the person who wrote the will and usually dictates the method of distribution of the property, but often a will or a trust will usually not give a PR any indication as to the identityor nature of many of the assets, how they can be located and accessed, along with other important details.

There are several services online to put into place if you want to make arrangements via persons other than those whom you have selected as your agent or personal representative.   I think it is crucial that a letter of instruction contain a digital access as well as digital assets listing so that the agent, PR or survivors can identify the “known universe.”  How is that universe constellated?  Look to Kipling’s six serving men to assist here: what, why, and when, and how, where and who.

  • Computer storage of information (hard drive or cloud-based)
  • Email accounts, usernames and passwords
  • Online Banking information
  • web domains and the like (internet real estate)
  • intellectual property (e.g., blogs, pictures, etc.)

For better or worse, digital assets that have value can be transferred or disposed of relatively easily via a will or trust.  Management of those assets is another story.  How can estate planners stay on top of the ever-changing landscape?!  How about a special digital asset trust?  You certainly don’t want the private information contained in your will.  I just probated a will where I had to redact the testator’s SSN.  The trust’s ownership of the assets will survive the death of a testator, and (in states outside Colorado where estates are public record) remain private.  Trusts can be amended relatively easily, and a special successor trustee (like a digital asset management company) may be named to manage the assets. This is just one idea to consider among several alternatives.

3. What are some of the difficulties to consider when devising an estate  plan which includes digital assets?

Most states do not have any law that applies particularly to digital assets in the probate context.  In our legal system case law can develop in new areas of the law but a preferable means of  a cogent legal response to this ever-changing landscape would be to devise a new “regime” for such assets by including them in each state’s probate laws.  There is of course a difficulty of the variety of each state’s probate laws, and this mobility is relevant in our mobile American culture.  This effort, a uniform state law regarding digital assets, is what the Uniform Law Commissioners (ULC) is engaged in presently.  In the meantime however, we must consider the lack of clearly applicable law, the uncertainty of existing law, the prevention of identity theft for online activities all in the context of taking steps to make sure that a person’s wishes relating to digital assets are carried out in the way  intended.  This area is a natural place for the ULC to get involved, as the need for uniformity across state lines, along with the consideration of applicable federal laws regarding the internet requires a considered approach.  In the durable power of attorney context, the issues are much more challenging than in the decedent estate context.

4. Fiduciary Access to Digital Assets

There are important distinctions between fiduciary management of digital assets when a person is alive  and the management of those same assets after a person has passed away.  The situation appears to be much more problematic as they concern management of assets while a person is alive and perhaps incapacitated.  The situation is clearer and a bit more manageable as it concerns decedents’ estates.  I previously wrote a blogpost about social media and mourning, here’s an article about a new feature on Facebook that allows people to memorialize, pay tribute to and otherwise grieve on Facebook.

I will have another post on this topic before year’s end – updating our digital accounts and assets should be on everyone’s year-end to do list!

©Barbara Cashman 2013     www.DenverElderLaw.org

Digital Assets in the Estate and Elder Law Context – Evolving Law in a State of Uncertainty: Part II

In this post, I look particularly at a couple topics that touch on issues that relate to both the agent/conservator (while a person is still living) context (what we elder law types refer to as disabled or incapacitated) as well as the post-mortem (decedent’s estate) context.

Fall Colors at DBG

After reading last week’s post, one of my readers expressed to  me that he thought it was perhaps a bit too much of the big picture and didn’t see how the post hung together.  So, with that helpful observation in mind, I write today’s post with the intent for a slightly more concrete approach. . . .

Today I will focus on two major aspects of digital assets and our thinking about them.  First, I will look at the historical distinction between tangible versus intangible property and how digital assets extend this historical distinction in a new context.  Second, I will briefly examine the intersection of laws that apply to and are involved in our online activities, specifically I’ll take a look at which law applies and in what context-  the federal law and state law sources for internet regulation.

I recently spoke with a colleague who has been practicing for over forty years.  He has a tax law background and I am lucky to consider him part of my “brain trust.”  I liked his comments to me about digital assets, that they are basically just intangible property of different stripes and that this management issue for the decedent estate context can be managed in a way similar to the historical use of a “literary executor” that many writers have employed over the course of history.  I plan to revisit this prospect of “digital executor” in future posts.  Okay, I promised I was going to get more literal in this post, so here goes.

Black’s Law Dictionary (my embossed office copy was published in 1979) gives three useful definitions:

It defines “intangible asset” as: Such values as accrue to a going business as goodwill, trademarks, copyrights, franchises or the like.  A nonphysical, noncurrent asset which exists only in connection with something else, as the goodwill of a business.  For “intangible property” is the following: As used chiefly in the law of taxation, this term means such property as has no intrinsic and marketable value, but is merely the representative or evidence of value, such as certificates of stock, bonds, promissory notes, and franchises.  And so if you’re still scratching your head over this legal term for je ne sais quoi, Black’s offers this final shot under “intangibles:”  property that is a “right” rather than a physical object.  . . This sounds pretty well on point so far, doesn’t it?  So, let’s take a look at the second topic – the fuss about how to regulate the internet.

The Supremacy clause, conflict of laws, etc.  One astute commentator (Jim Lamm, who edits the very astute blog digital passing) has discussed the issue of federal preemption in the digital asset context. Federal preemption derives from the Supremacy Clause of the U.S. Constitution, which makes the U.S. Constitution the supreme law of the land.  Remember that under our federal system each state has its own constitution which is free to provide and protect rights more vigorously than the US Constitution, but below which no state constitution can fall, at the  …. There are two basic types of federal preemption, express and implied.  Express is explicit, when the federal law says “this is the law or federal regulatory regime that applies to a particular are of law.  I am thinking back to a case I was familiar with from federal court.  A good example of this is the Federal Insecticide and Fungicide and Rodenticide Act (FIFRA) which confers exclusive regulatory control of labeling of pesticides on the Environmental Protection Agency.  The states have no authority to regulate labeling under this type of federal preemption.

As you might imagine, even  express preemption gets an occasional workout in the U.S. Supreme Court.  So what about this issue in the context of digital assets?  There is arguably no  federal law that states it (the federal government) is the supreme regulatory scheme for the internet, even if there are in place a number of laws, including criminal statutes, regulating use of the internet.  Here is where we look at implied preemption, and the flavor of this type applicable to the digital assets and internet context is “occupation of the field” preemption, basically where the federal law takes up so much of the “regulatory room” if you will, that there is really nothing substantive left for the states to regulate.  It is a far stretch to consider the federal statutes concerning the use of the internet use as concerning a federal interest (as opposed to state interest) that is entrenched in a federal regulatory and enforcement scheme that is all-embracing in such a way as to leave no room for the individual  states to regulate in any meaningful way.

I will forge ahead with this discussion as it develops and as the Uniform Law Commissioners hone their model act.  This will potentially apply to our probate code in Colorado in several contexts  – for agents and other fiduciaries, for guardians and conservators, trustees, as well as personal representatives.  So, once again, we are left with more questions than answers.  This is one of the primary reasons I love practicing estate and elder law – it is constantly evolving.  So, if I might cast my net out on that far shore as I close this post, let me quote a favorite poet – Rainer Maria Rilke – who had a very insightful comment about the importance of questions in a human life:

..I would like to beg you dear Sir, as well as I can, to have patience with everything unresolved in your heart and to try to love the questions themselves as if they were locked rooms or books written in a very foreign language. Don’t search for the answers, which could not be given to you now, because you would not be able to live them. And the point is to live everything. Live the questions now. Perhaps then, someday far in the future, you will gradually, without even noticing it, live your way into the answer.

       Letters to a Young Poet , by Rainer Maria Rilke, 1903.

 ©Barbara Cashman 2013     www.DenverElderLaw.org

 

 

Digital Assets in the Estate and Elder Law Context – Evolving Law in a State of Uncertainty part I

October clouds in Deer Creek Canyon

 

In this first post, I will explore some of the unsettled and unsettling legal aspects of digital assets.  I am going big picture here.  Digital assets are a new kind of property, coming into existence as such by virtue of the technological and communication advancements that are part of our networked online world.  Like any other property, digital assets – an emerging “digital divide” if you will, have both the power to unite people and to distance us from each other.  Flash mobs, crowd sourcing, playbor and lots of other connections are all new ways of collective communication and concerted action which can be used to usher in positive changes, more democratic participation in previously closed institutions, and many other efforts.  Here’s a good recent example in an 11/5/13 post on the CBA/CLE Legal Connection blogpost about “crowdfunding” securities under the federal Crowdfund Act.   The new federal statute allows crowdfunding, a previously prohibited type of sales of unregistered securities over the internet.  Here’s a link to the new proposed regulations – the SEC wants to hear from you about them!

So back to the people and property connection.  I think that a basic question, as Howard Rheingold writes in his excellent 2012 book “Netsmart” is a question of the degree to which each of us embraces change and participation on an individual level so as to become part of something bigger.  Rheingold’s taxonomy of online collective work includes: (1) networking, (2) coordination, (3) cooperation, and (4) collaboration.  (Netsmart at 153-54.)   Some of this work involves hanging out, messing around, geeking out, networking, collaborating, participating – these are just some of the activities that the digital commons can provide participants.  I think conceptualizing digital assets requires a whole new way of thinking about property in this regard.  This virtual message board, marketplace, library, playground or laboratory – however you characterize it – typically defines the “property” by how it is used.  This is a break from tradition, and while this may not be a time for nostalgia really, but there is a looming sense of challenge for many of us when it can become difficult to disengage.   Unless you can bring yourself to shut off your Smartphone while you are with a loved one, on vacation or the like, and otherwise resist the urge to be plugged in 24/7, it can become a huge challenge  even if you don’t “have to.”  Theories regarding the implication s of networked technologies and its implications for human interaction, our sometimes compromised ability to engage in reflective, contemplative and deep thought, and so to an extent, even human consciousness abound.  Last summer I posted on GriefLink’s blog about  the simple power of listening and simple human presence (a/k/a the heart’s ancient technology).   But wait, this post isn’t about the internet as social experiment, it is about digital assets . . . .  there is a distinction, right?

Before I abandon this foray, let me go down one last philosophical path.  What if we consider the networked society and a means to advance the evolution of humans and our civilization (and yes, I am deliberately choosing to ignore that immense sleazy side of the internet)?   Here I will openly borrow from the final post in a series I wrote for the CBA’s SOLOinCOLO  blog:   Interesting to note in this context is “The Evolution of Cooperation: Competition is Not the Only Force that Shaped Life on Earth,” from the July 2012 issue of Scientific American,  and the article by Martin Nowak, “Why We Help.”  Nowak’s article describes a public goods game (inspired by the “tragedy of the commons” of the late 1960s)  that found that people were more altruistic when: (1) they are convinced (educated) that sacrifices for the common good are needed; (2) they are allowed to make contributions publicly (to enhance reputation); and (3)  they feel they are being watched.  Sorry – but this last one sounds positively theological to me, so I have to mention Pierre Teilhard de Chardin, who also had some very forward-looking ideas about the evolution of humanity and consciousness.

Nowak’s final observation is that “the altruistic spirit always seems to rebuild itself; our moral compasses realign.”  I liked this last comment about evolutionary simulations because it looks to be consistent with Teilhard de Chardin’s observations on the drawing together of noospheric effects and offers much promise for realizing the potential of social networks within the Internet.  I love this connection between Nowak, the mathematical biologist at Harvard; Teilhard, the late Jesuit paleontologist/theologian; and … social media.   That’s a glimpse of the “special world” that is all around us today – at least from my point of view.

The power of connection, of collective action made possible by the internet is indeed a force to be reckoned with, and we need also to account for the ways in which people and relationships are subjected to harm.  This is where the networked age is like a death, the demise of the old “information society” – and we cannot ever go back, or return to who we were before it.  This new place, however, is one of wonder.  It reminds me of a favorite poem by Hafiz, the medieval Persian poet, this excerpt is from “Deepening the Wonder” and is from Daniel Ladinsky’s 1996 book “The Subject Tonight is Love,” a translation of many poems written by Hafiz:

Death is a favor to us,

but our scales have lost their balance.

The impermanence of the body

should give us great clarity,

Deepening the wonder in our senses and eyes

Of this mysterious existence we share

and are surely just traveling through.

                …..

excerpted from The Subject Tonight is Love at 55.

At this point, I will conclude with the theme for the next few posts on this topic, what is digital property, how do we use it (or how is it used by others, sometimes in ways that we do not intend) and how do we manage and protect it?  What do I consider digital property?  The only way to answer this is in the big picture context that is really the only effective way to encompass, intellectually, what is a constantly developing universe: it is any online account you may own or any file that is stored in the cloud.  To be continued . . . .

©Barbara Cashman 2013     www.DenverElderLaw.org

Free Speech and the Digital Age

Marble Daisy

You might be wondering why an estate and elder law attorney would be writing about this topic in a post.  Well, perhaps it’s my years in federal court reading about and listening to civil rights actions, but it is an ongoing interest of mine as well in that it is the evolution of our networked civil society.  Last week I presented a continuing legal education program to a Boulder County Bar Association group entitled “Lawyers on Facebook – Oh My!”  It was an update of a program I presented over a year ago at the Colorado Bar Association (my “5 minute mentor” video here), and although its title is narrowed for comedic effect, it’s really about lawyers using (and misusing) social media.

I  recently read with interest the Wall Street Journal’s post  about the recent decision by the U.S. Court of Appeals for the Fourth Circuit (Colorado is part of the U.S.C.A. for the Tenth Circuit) in Bland v. Roberts.  In that decision, the court held that a Facebook “like” was protected speech under the First Amendment.  As I recall from some previous research I did for a “Lawyers on Facebook Oh My” continuing legal education program I presented, the trial judge (from the Eastern District of Virginia) tossed out on summary judgment a deputy sheriff’s claim that a “like” on Facebook (here it was on the page of the candidate for sheriff who was running against the incumbent sheriff, for whom the deputy worked).  The trial judge entered summary against the deputy (Carter) on his claim, ruling that the “like” was not protected speech because it wasn’t sufficient to constitute speech, let alone protected speech under the First Amendment.  The Fourth Circuit decision changes this.

The deputy sheriffs who were the plaintiffs in this civil rights action under 42 U.S.C. §1983, alleged their former boss retaliated against them for their support of the sheriff employer’s electoral opponent.  The deputies were not reappointed to their positions after the sheriff was reelected. Bottom line for this decision though is that the sheriff defendant is entitled to qualified immunity.  Qualified immunity is an altered version of sovereign immunity, or the historical doctrine of “the king can do no wrong.”  It is a standard defense to civil rights claims asserted in federal courts against state and federal defendants.  The ACLU, Facebook and the National Association of Police Organizations each filed amicus – friends of the court – briefs.  At page 36 of their opinion, the Fourth Circuit examined the claim of the single sheriff’s deputy plaintiff (Carter) who asserted that her liking her boss’s opponent on Facebook was protected speech.   In its multi-page analysis of Facebook speech, the court cited to the amicus brief of Facebook, Inc.  The court determined that “once one understands the nature of what Carter did by liking [the sheriff’s opponent’s] Campaign Page, it becomes apparent that his conduct qualifies as speech.”  Bland v. Roberts, slip op. at 39, relying on two U.S. Supreme Court opinions and going on to determine that the Campaign Page was pure speech as well as symbolic expression.   The court held that Carter’s “liking” was, as a result, expressive conduct with a particularized message, not unlike placing a political sign in one’s front yard.  The court continued its thorough analysis of the nature of the speech and the applicable balancing test and held that Carter’s allegation is sufficient to withstand summary judgment and reversed this determination of the trial court and remanded the issue for trial.  Id at 44.  This is very interesting

The world of social media and internet communication and interaction is constantly evolving.  Apart from the legal issues that particularly interest me as an estate and elder law attorney – digital assets in the probate context – there are many aspects of our social and political discourse that are changing as a result of our interaction with social media.  Stay tuned for the next couple posts about digital assets in the estate and elder law context.

©Barbara Cashman 2013     www.DenverElderLaw.org

 

Estate Planning and other Fearsome Topics: part II

Mesa Verde NP

This post is a continuation of an earlier post about fear-based tactics that are sometimes used to “help motivate” people to plan their estate.  This type of fear based motivation does not appear to help people think clearly about their values and priorities, but rather the fear is designed to sell.  Check out this recent Denver Post article that has helpful information and also instructs people to “walk away from high-pressure tactics.”  One definition I found of “advertising” goes along these lines:

the nonpersonal communication of information usually paid for and usually persuasive in nature about products.  Another definition talks about “driving behavior” and this post will focus on those two aspects in the estate planning context.

In an earlier post I introduced the first two Myths of fear-based estate planning as follows:

   Myth #1: You Need to Avoid Probate (as in probating a will) at All Costs and

   Myth #2: Getting a Trust Will Protect Your Assets from Nursing Home Costs and Medicaid Recovery

Let’s take a look now at two more myths of fear-based estate planning.

   Myth #3: A Living Trust is the Answer to All Your “Problems”

This is where the pitch might be at its most shrill.  Once I got a call from someone who actually hung up on me when I told her that sometimes probate wasn’t a bad thing. . . . !  In my practice, I have seen the dark side of several trusts.  There are many trusts that are generic and not tailored to an individual’s situation in any meaningful way, and because they are so long and complicated, clients don’t have a decent understanding of how the trust works.  The trust may create a completely unworkable management scenario, like when the adult children appointed as trustees can’t get along.  Another important factor to consider in this regard is that the trust document doesn’t usually accomplish anything on its own.  It merely creates the trust.  Often this important detail is not adequately explained to the client or it is completely neglected.  It requires the re-titling of a person’s assets into the trust’s name.    I have opened probates in such situations, where a probate asset was not, much to the surprise of the trustee and an heir, titled in the trust’s name but rather remained in the decedent’s name.  Trusts must be established properly as well as maintained.  Some are rather high maintenance.  If someone is telling you about how much an “average” probate costs – be sure to draw a distinction between the costs of probate and the costs of a probate lawyer.  Many times the trusts that are being sold are much more expensive than the probate alternative!

   Myth #4: Selling a Solution to a Problem You May Not Have

One of the sales tactics used might be for protection against things that people didn’t even know they needed to worry about.  One of these I’m familiar with is to use a trust to protect certain assets in the event an intended beneficiary might someday divorce.  It is always a good idea to ask questions about these kinds of arrangements, which appear to be based on the potential client’s intended response of “well, of course I would want this!”  The basic premise I am getting at here is that the options presented should be based on your own unique situation, and not a one-size-fits-all package that is being sold to you.

Bottom line for this post – find legal assistance that  involves communication that is personal to you.  How else will you know whether your plan is actually designed to work for you?  A hallmark of the attorney-client relationship, enshrined in our Colorado Rules of Professional Conduct,  is the obligation of “informed consent.”  You are probably familiar with this in the medical treatment context  –  but you might not have known that lawyers in Colorado are obligated to meet informed consent requirements.  This is often a two-step process:

(1) the lawyer must relay the necessary information to the client; and

(2) the lawyer must get the client’s consent regarding the lawyer’s next course of action.

What kind of information is relayed, how much information, and when the information is communicated, will typically vary according to the sophistication and experience the client has in legal matters and in making important decisions.  When you meet with an estate planning attorney who is able to ask questions and also listen to your concerns and find out what your unique situation presents, you will be more confident that  you are in good hands and that you are, as a result of informed consent, the one in charge of the attorney-client relationship in that the choices are made by you among a range of alternative communicated by the attorney to you.

There are alternatives available for any plan, and the best way for people to know they have made the decision that is right for them is to choose among the available alternatives.   This is the nature of informed consent.  If the estate planning documents do not suit a person’s or a family’s unique situation, there may be little point of putting a plan into place.

If you have a computer with internet access or you know how to find your local library, you can get plenty of information about estate planning and probate in Colorado (including the 2013 Senior Law Handbook) from the Colorado Bar Association, at www.cobar.org

PS Happy Birthday, Weird Al (Yankovic)!

©Barbara Cashman 2013     www.DenverElderLaw.org

 

Estate Planning and other Fearsome Topics: part I

des Beaux Arbres en Marbre

You might be wondering about the topic of this post, I’ve written about estate planning in the therapeutic jurisprudence context before, so what is this one about?  It is about  . . .  the dark side, or fear-based estate planning.   Is someone or something – perhaps working together and typically referred to as “they“ – out to get you?  Perhaps to rob your heirs of the rightful proceeds of your estate . . .  !   Who is this nefarious individual or entity?

If you read some of the newspaper ads, are you surprised to learn about all the bad things that could happen to you that you didn’t know about?  “Fear based” estate planning is taking the “nightly news” gloom and doom approach to a very individual and personal situation, creating a problem that may or may not exist, but is something that strikes fear, and offering a solution in a tidy little package with a typically rather large price tag.  Estate planning is too individualized, too personalized to an individual or family’s unique circumstances to leave to a fear-based reaction mode of decision making.  Perhaps this is where I transition to myth buster mode, so let’s proceed.

Myth #1: You Need to Avoid Probate (as in probating a will) at All Costs

Many people have been trained to fear probate, but if you asked them why, it would often be difficult to get a straight answer.  Lawyers, like doctors, must obtain informed consent for their legal services. Informed consent requires that a person’s consent to be competent, voluntary, and informed.   Clients need to be informed of alternatives so that they can make their own informed decisions about how they wish their attorney to proceed.  Fear-based estate planning often threatens this basic requirement.  There may indeed be good reasons for a person or a family to avoid probate, but they ought to be considered in a calm and rational manner.

Since 1973, Colorado has had a version of the Uniform Probate Code.  Probate in Colorado is simplified and the vast majority of it requires no judicial involvement.  Our financial lives in today’s world are seldom simple. Even those of us who are certain that we have updated and appropriate beneficiary designations on our accounts (like a beneficiary designation for an IRA, or a pay-on-death provision for a bank account) can drop the ball over the course of years.

When a person dies without a will, the law that applies to the disposition of the decedent’s estate is known as the law of intestacy.  It is part of our probate code.  Intestacy is designed to approximate what most people would provide in their will, but with some important details left out.  Intestacy can apply in a fairly straightforward manner where there is a “Leave it to Beaver” style family, which is no longer the “typical” scenario.  Modern complications include: married with no children; unmarried committed couple; remarried couple with stepchildren; divorced with minor or adult children; married with assets in a community property state; and a host of other life circumstances that seem to affect the majority of us.

Another option for Colorado probate is to collect an estate via affidavit.  This affidavit can be used where there is no real property involved and (for 2013) the assets do not exceed $63,000.

If there is real property or are probate assets which may include “surprise” probate assets (nonprobate assets which they lack an effective beneficiary designation and which exceed $63,000) then a probate will generally need to be opened.  If you can’t afford an attorney, many judicial districts have assistance available at “self-help” centers.    Many of my colleagues and I assist at these clinics.

At the present time, the statutory filing fee for opening a decedent’s estate is $164.00. Colorado, unlike some other states, does not require judicial supervision of decedent estates (except where there is a will contest or other contested matters which require juridical intervention) and there is no percentage valuation of an estate that goes to either a lawyer probating the estate or the state by virtue of some appraisal of the estate’s value.  Colorado has no estate tax.  The federal estate tax is currently around $5.25 million, so this is not a concern for most people.

Myth #2: Getting a Trust Will Protect Your Assets from Nursing Home Costs and Medicaid Recovery

Medicaid is a federal program for providing health care coverage to aid to indigent persons including children, pregnant women, people with disabilities and older persons.  It is a program for which one must be eligible.  For older persons, one must be sick enough and poor enough to qualify for benefits.   Medicaid is not Medicare.

In Colorado, Medicaid is administered through the Department of Health Care Policy and Financing (HCPF).  This agency really doesn’t care for trusts that some people have created and to which they have transferred title to their residence.  For example, if someone puts their house in the trust’s name and then needs to apply for Medicaid within the five year look back period, there will likely be a penalty, a period of ineligibility based on the amount of the gift (the transfer to the trust for less than fair consideration) and the average costs of care in a nursing home.  It may be necessary for the trust to convey back the title to the person applying for Medicaid so that they can become eligible.  This is not always possible.

A reverse mortgage is another method that some individuals use to tap into equity resources of their home, and these require that the home be titled in an individual’s name, and not in a trust.  Bottom line is that trusts don’t generally work for “keeping your assets out of the hands of nursing homes” where it involves a home that is the primary residence.

I will be back soon with another myth-busting installment on this topic. . . . stay tuned.

©Barbara Cashman 2013     www.DenverElderLaw.org