Estate Planning in the Digital Age


Estate Plans for the Modern World

The main purpose of having an estate plan in a digital age, is to leave a legal record of how you want your property transferred, should you die. For years, we've had what appears to be an ever expanding life expectancy, the average life expectancy in the U.S. is now into your late 70s. And it looked like it was going to go on forever. Recently, COVID has shined a light on preparing for anything, and taking nothing for granted. Today, you can look at the fact that in this country, 40,000 to 50,000 people die each year in car accidents, COVID takes the lives of the healthy and the unhealthy, the young and the old indiscriminately. If you want to be responsible, you need an estate plan. The uncertainty of life requires that you have one. You’re never too young to get started. And no matter how parental that may seem, you really are never too young to start saving money and preparing for the future.

The Young Professionals of Today

According to cnbc a surprising statistic that came out during the last couple of years is that the average millennial (ages 25 to 40) has around $100,000 ($51,300 in personal savings and $63,000 in their retirement account) in assets. We also know that during COVID, a lot of people cashed in their savings. On one hand, there is a young, upwardly mobile generation that is gaining liquidity. On the other hand, middle aged earners, at the height of their income potential, seem to have cashed in a lot of their savings (51% based on this article.) These groups, and everyone in between, should start asking the same questions: How do I protect, manage and transfer wealth?

Remote Wills

People think that a will and trusts are complicated documents, that they require you to be dragged down to some lawyer, and they’ll have to talk at length about things that most people don’t want to talk about. What you want to talk about where you're going on vacation, what your career ambitions are, and what you are interested in pursuing. As a young person, you don't really want to talk about whether your bookshelf will go to your parents or your children. But in a digital age, we have a great opportunity: you can meet on Zoom with a lawyer, face to face and share your concerns, your goals, your interests in a very private and secure way. Remember, Zoom is about as secure as sitting in a room together. And you can have somebody draft these and review them with you online. All you have to do is sign them. In some states you will need to get them notarized, but even this step can be taken remotely thanks to programs like Docusign.

We as lawyers recommend that people have their wills, notarized, because it raises it, it prevents any question about the validity of it. The other thing that's very, very interesting now that we can offer people is a recording of a conversation about your intent. Plus you're on Zoom, and your lawyer can retain it. That way, if anybody has any questions about what your intent was, it's right there. Now let's talk about cost. The average person does not need a complicated will, what we need to do is establish relations. Friendship with a lawyer, we get a simple will going when we're starting our early earning years, and then you review it frequently. Something to keep in mind is: What happens if you die without a will? Well, you're simply opening the door for a lot of work, and a lot of expense for your family members. And your property might go to somebody that you didn't intend it to. And our next blog post will talk about what happens if you die without a will and a trust.

Will you need an Executor?

Firstly let’s define an executor: An executor or a personal representative is simply somebody who you appoint to have a legal duty to follow your intent. In typical times, you would name a family member as an executor. I would always recommend that because it's cheaper, it's more efficient. You can leave your wife as your executor. Your husband as your executor, your sister, some member of your family that you think has a reasonable expectation of outliving you. And you should always name a couple of substitutes if one is unable or unwilling to serve. The challenge we have in a modern society is that people don’t always live close to their relatives. For instance, I grew up on the East Coast. I left the East Coast years ago thus members of my family don't live in New Mexico. It’s important to think about whether you have family close to you because you need to be aware of the potential burden you might put on someone.

Who lives within the jurisdiction?

I'm not saying that you can't have a personal representative or an executor. Are they entitled to pay? Yes, reasonable compensation. Okay, reasonable is a word, we can talk about it at another time in many circumstances. But you don't want to create undue burdens on your loved ones. If you own property, or bank accounts or other stuff in New Mexico, and your executor, your personal representative lives in New York, they may well have to travel to to do their job, they have to miss their own work, they miss their own families, they have the expense of the travel, they have the inconvenience, and then they come into a situation in which they really don't know anybody. Remember, an executor or personal representative's job is to gather up all your possessions, and of course, they have to file your last taxes both for your income and for your estate. They have to dispose of your property. This is why it is important to think about what will happen if you die today. For example, I have a house full of stuff that somebody's gonna have to come in and sell or transfer or do whatever. Which is not always an easy task for somebody, and this is why I will always recommend that somebody either appoint a member of their family or a close friend that they trust who lives in the same state. Then before you appoint somebody, I would sit down and talk to them and say, This is what I own as of today. This is what I think you're going to have to do and then get their buy in or their buyout. You have to remember that a lot of people don't necessarily want to be an executor or personal representative. It is a lot of responsibility. Another thing that is important to remember when choosing an executor is that a lot of people don't understand what you want. You don't want to throw somebody into a situation that they're unprepared for and do not want to be in.