King & Wood, P.A.

FinCEN Reporting Requirements for Certain Small Businesses

The federal “Corporate Transparency Act” (“CTA”) imposes “beneficial ownership information” (“BOI”) reporting requirements on many Florida small businesses effective as of January 1, 2024.

Upon request, the lawyers of King & Wood, P.A., in Tallahassee, Florida, can help entities determine whether they are subject to the CTA’s reporting requirements and, if so, help them prepare reports of BOI for electronic filing with the Financial Crimes Enforcement Network of the Department of the Treasury (“FinCEN”).

Generally, any “reporting company” that was in existence before January 1, 2024 must file an initial report not later than January 1, 2025.  Generally, any “reporting company” formed during calendar year 2024 must file a report within 90 calendar days after formation.  Updated reporting for changes in beneficial ownership also is required.

The determination of whether an entity is covered by the CTA requires detailed examination of the definitions and exemptions in the FinCEN regulations.  “Reporting companies” include any entity that is a corporation, limited liability company, or other entity created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.  The definition includes most Florida corporations and LLCs.  The definition also includes entities formed under the laws of foreign countries that are registered to do business in any State.  Some entities are exempt from the reporting requirements.  These include most publicly traded companies, government entities, banks, credit unions, section 501(c) tax-exempt entities, certain large operating companies, and certain “inactive” entities.

Generally, “beneficial owner,” with respect to a reporting company, means any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interests of such reporting company.  Generally, “ownership interest” includes stock in a corporation and a membership interest in an LLC.

For more information, please contact:

Kimberly L. King

Edward W. Wood

King & Wood, P.A.

1701 Hermitage Blvd., Suite 203

Tallahassee, FL 32308-7796

850-580-7711

850-205-4501fax

Website:  http://www.kingandwoodlaw.com

See generally 31 U.S.C. § 5336 (Beneficial ownership information reporting requirements); 31 C.F.R. § 1010.380 (Reports of beneficial ownership information).

What’s the Age Cut-Off for a Roth IRA?

“If you’re nearing the end of your career, you may be wondering if a Roth IRA is still a wise addition to your portfolio. It is possible to open a Roth IRA later in life and start saving.”

Roth IRAs aren’t just for young people, as long as you meet the criteria regarding income, how much you may contribute and when you’re eligible for penalty-free withdrawals. A recent article, “Are You Too Old to Benefit From a Roth IRA?” from U.S. News & World Report, explains the benefits and requirements for older workers considering a Roth IRA.

Requirements for a Roth IRA

Once you meet the qualifications, you can add funds to a Roth IRA at any age. In 2024, the contribution limit Is $7,000 or $8,000 if you’re 50 or older. The account must be open for at least five years to take penalty-free withdrawals in retirement. If you take funds out early, you could face penalties, and contributions to a Roth IRA may only be made from earned income.

A single person may add funds to a Roth IRA if they earn up to $146,000. After that, the amount you may contribute is phased out until income reaches $161,000, after which you can’t add funds directly to the account. For married couples, the income threshold is less than $230,000.

Roth IRA Tax Benefits

Funds are taxed before they go into a Roth IRA account, giving the advantage of the account the tax-free distributions of contributions and earnings. In addition to the five-year rule, you’ll need to meet these eligibility requirements:

• The original owner dies, and you inherit the Roth IRA.
• The owner is at least 59 ½ years old.
• The owner meets disability requirements.
• The distribution is used for first-time homeowner expenses of up to $10,000.

Age Considerations

If you’re in your 70s and still working, there are some facts to consider before opening a Roth IRA. The tax-free growth of Roth IRAs works best as the holding period increases. The up-front tax costs may be very high if you’re in your highest income level and a higher tax bracket. This makes a Roth IRA more advantageous for younger contributors. However, if you work part-time, your lower taxable income might make the Roth IRA an excellent way to save.

Passing Funds to Heirs

With traditional IRAs or 401(k)s, Required Minimum Distributions start at a certain age, usually after celebrating your 73^rd birthday. However, there are no RMDs for Roth IRAs, and the funds remaining in the account after you die could be passed on tax-free. Beneficiaries may inherit the Roth IRA while allowing it to grow tax-deferred for up to ten years, then take the money without paying taxes.

Opening a Roth IRA later in life should be coordinated with your overall retirement and estate plan to be sure it works in concert with your overall estate plan. When reviewing your estate plan, it’s something to discuss with your estate planning attorney.

Reference: U.S. News & World Report (Dec. 29, 2023) “Are You Too Old to Benefit From a Roth IRA?”

What Is the Biggest Mistake People Make on Their Wills?

“Have you managed to avoid the eight most common estate planning mistakes? Your family will thank you.”

Making mistakes in your estate planning can torpedo every effort made to protect your family after you die, warns a recent article from Kiplinger, “Common Estate Planning Mistakes.” Everyone benefits from a professionally-made comprehensive estate plan, a process for preparing your legal and financial affairs so assets and possessions are passed on after your death to the people or charities you want.

Not having an estate plan can create a world of trouble for those you love. The biggest estate planning mistake of all is not having an estate plan. After that, there are several others.

Procrastination. Suppose you unexpectedly become incapacitated and don’t have an estate plan. In that case, your family will be left guessing what you would want your medical care to be, in addition to needing to go to court to apply for guardianship so they can pay your bills and keep your household running. Everyone should have documents like Health Care Power of Attorney, Power of Attorney, HIPAA Release Form and Living Will in place.

Trying to make an estate plan on your own. Unless you’re an experienced estate planning attorney, there’s a lot you could leave out if you attempt a DIY estate plan. If there are errors, a court could declare your will invalid and it’s as if you never had a will in the first place. The laws of your state will be used to distribute your assets. It may not be what you had in mind.

Keeping estate planning documents in a safe or safe deposit box. Documents need to be where someone can get them in an emergency or after your passing. Safety deposit boxes are often sealed on the death of the owner. Give copies of your estate plan to your appointed executor or trustee, a trusted family member and your estate planning attorney.

Missing key documents. If your estate plan lacks key documents, your heirs might find themselves battling over the estate. Make sure your estate plan includes these documents:

• Last will and testament—This document outlines all final wishes and instructions for distributing your assets and how you want your affairs managed after you die. It also is used to name a guardian for minor children and an executor to oversee the instructions in the will.
• Beneficiary designations—Any account allowing for beneficiaries, including IRAs, pension plans, investment accounts and insurance policies, will pass directly to named beneficiaries. Be sure that these are up to date.
• Durable power of attorney for medical care—Allows another person to make medical decisions for you if you become incapacitated. Depending on your jurisdiction, it may include an advanced healthcare directive, which gives your instructions on whether or not to use life support.
• Funeral instructions—Do you want a traditional burial? Cremation? Tell your family your wishes for a funeral or memorial service.
• Proof of identity—Your Social Security card, birth certificate, marriage and/or divorce certificate and any prenuptial agreements will be needed for administering the estate.
• Deeds or loan documents for large assets—Collect paperwork for homes, boats and other big assets.

Digital assets. These include websites, cloud storage, social media accounts and cryptocurrency, to name a few. By assigning a digital fiduciary and sharing key information, you help heirs avoid identity theft and lost assets.

Failing to update your plan. Your estate plan needs to reflect the changes in your life. If your estate plan is outdated, you may unintentionally disinherit beneficiaries.

Appointing the wrong person as executor or trustee. If your eldest child is a disaster with money management, don’t name them your executor. Consider a trusted person who is unbiased and able to manage money and family dynamics and talk with them about taking on this role before appointing them to this critical role.

Reference: Kiplinger (Dec. 30, 2023) “Common Estate Planning Mistakes”

How Do You Stop Family Fights over Inheritance?

“A highly successful estate-management strategy for avoiding inheritance disputes is to make a meticulously detailed and legally sound will.”

One of the many aspects of a professionally created estate plan involves employing strategies to avoid inheritance disputes. Your estate planning attorney has various tools, from creating a revocable living trust to drafting a detailed and legally sound will, as outlined in the article “6 Estate Management Strategies to Avoid Inheritance Disputes and How to Implement Them” from Legal Reader.

Creating a revocable living trust and placing assets in the trust allows those assets to be passed to heirs directly and according to the instructions you provide in the language of the trust. Assets not in the will need to pass through the probate process, where those involved in the estate plan might need to attend lengthy and stressful court proceedings. In some jurisdictions, the court may require the presence of all heirs and even estranged family members who were not properly disinherited.

In the probate process, beneficiaries can air grievances if they are unhappy with the inheritance agreement and could potentially challenge the will. By passing assets via a trust, you can completely reduce or avoid the opportunity for these disputes to occur.

The foundation of a successful estate plan is a will created with an experienced estate planning attorney. A will is a legally binding document outlining how the decedent wanted their assets and property distributed upon death. The estate planning attorney will work with you to ensure the language in the will is extremely specific and leaves no room for interpretation.

Some assets pass through beneficiary designations, including life insurance policies, retirement, investment, and bank accounts. To avoid problems with these financial assets, regularly review and update beneficiary designations to avoid giving someone no longer in your life a generous gift. These should be reviewed anytime a significant life event occurs, like marriage, divorce, birth or death, changes in financial circumstances, or when you acquire new assets.

A prenuptial agreement can mitigate the risk of inheritance disputes by establishing specific terms and conditions in the event of a divorce. They are particularly important in states where the courts can divide property acquired during the marriage regardless of where the assets came from. By drafting documents explicitly declaring intentions about the treatment of inherited assets, you provide an additional layer of protection to assets in case of divorce. The process also fosters communication between parties to assist in clarifying expectations for the future.

A well-drafted no-contest clause can diminish the likelihood of legal battles among heirs and challengers. It helps dissuade disgruntled beneficiaries from pursuing costly litigation by putting any inheritance at risk if they should decide to pursue what they feel are unfair distributions. It is imperative to engage an experienced estate planning attorney licensed to practice law in your state to have an effective no-contest clause in a will or a trust.

In some situations, liquidating non-cash assets like real estate makes the most sense. It’s far easier to divide cash than proportions of real estate. However, a buyout arrangement can be implemented if one sibling wants to purchase the property. Beneficiaries could buy out each other’s shares if there's more than one heir, eliminating the need to sell the asset.

By working with an experienced estate planning attorney, you can ensure your will clearly articulates your wishes, prepares for unexpected scenarios, plans for taxes, and minimizes ambiguities.

Reference: Legal Reader (Dec. 4, 2023) “6 Estate Management Strategies to Avoid Inheritance Disputes and How to Implement Them”

What Is the Advantage of a Step-Up Basis for Estates?

“The adjustment in basis is a crucial tax consideration–what can it mean for you?”

The adjustment in the cost basis is sometimes overlooked in estate planning, even though it can be a tax game-changer. Under this tax provision, an inherited asset’s cost basis is determined not by what the original owner paid but by the value of the asset when it is inherited after the original owner’s death.

Since most assets appreciate over time, as explained in the article “Maximizing Inheritance With A Step Up” from Montgomery County News, this adjustment is often referred to as a “step-up” basis. A step-up can create significant tax savings when assets are sold and is a valuable way for beneficiaries to maximize their inheritance.

In most cases, assets included in the decedent’s overall estate will receive an adjustment in basis. Stocks, land, and business interests are all eligible for a basis adjustment. Others, such as Income in Respect of the Decedent (IRD), IRAs, 401(k)s, and annuities, are not eligible.

Under current tax law, the cost basis is the asset’s value on the date of the original owner’s death. The asset may technically accrue little to no gain, depending on how long they hold it before selling it and other factors regarding its valuation. The heir could face little to no capital gains tax on the asset’s sale.

Of course, it’s not as simple as this, and your estate planning attorney should review assets to determine their eligibility for a step-up. Some assets may decrease in value over time, while assets owned jointly between spouses may have different rules for basis adjustments when one of the spouses passes. The rules are state-specific, so check with a local estate planning attorney.

To determine whether the step-up basis is helpful, clarify estate planning goals. Do you own a vacation home you want to leave to your children or investments you plan to leave to grandchildren? Does your estate plan include philanthropy? Reviewing your current estate plan through the lens of a step-up in basis could lead you to make some changes.

Let’s say you bought 20,000 shares of stock ten years ago for $20 a share, with the original cost-basis being $400,000. Now, the shares are worth $40 each, for a total of $800,000. You’d like your adult children to inherit the stock.

There are several options here. You could sell the shares, pay the taxes, and give your children cash. You could directly transfer the shares, and they’d receive the same basis in your stock at $20 per share. You could also name your children as beneficiaries of the shares.

As long as the shares are in a taxable account and included in your gross estate when you die, your heirs will get an adjustment in basis based on the fair market value on the day of your passing.

If the fair market value of the shares is $50 when you die, your heirs will receive a step up in basis to $50. The gain of $30 per share will pass to your children with no tax liability.

Tax planning is part of a comprehensive estate plan, where an experienced estate planning attorney can help you and your family minimize tax liabilities.

Reference: Montgomery County News (Dec. 20, 2023) “Maximizing Inheritance With A Step Up”

Can Grandparents Give Money to Grandchildren for College?

“As the cost of college tuition skyrockets, parents and grandparents can take advantage of tax-efficient 529 plans and higher limits on gift and estate taxes.”

Helping grandchildren prepare for long-term success and easing the financial burden of college costs is a gift for two generations, as mentioned in a recent article from Kiplinger, titled “529 Plans: Give the Gift of Education (and Compounding).”

Giving cash directly to children or parents isn’t the best long-term strategy. Once the money is given, control is surrendered, and the gift may not be used as intended by the giver. Saving for college is one of the significant financial challenges parents face, especially considering the high inflation of college tuition costs. Between 2021 and 2022, U.S. college tuition rates increased by 12%.

This is where estate planning intersects with the new year. As the current historically high estate tax exemption ends at the end of 2025, managing the size of one’s estate becomes a higher priority. The structure of 529 college savings accounts can be used for tax efficiency and to control the eventual use of the gift while taking advantage of long-term compounding.

Current gift tax rules allow individuals to gift up to $18,000 per year per person. Therefore, a married couple could gift $36,000 to each child and grandchild without it counting against their lifetime exemption or requiring them to file a gift tax return. However, the 529 is even more advantageous, allowing a five-year front-loading of such gifts per recipient.

If your state has a plan, funding 529 plans offers deductions on state income taxes. If your state doesn’t have a 529 plan, you can open an account in another state but won’t receive the tax deduction.

There have always been concerns about overfunding a 529 account or having unused funds if the beneficiary decides not to attend college. Most plans allow account owners to change beneficiaries without any tax consequences as long as the new beneficiary is a member of the current beneficiary’s family. If the new beneficiary is younger than the prior one, it may be wise to change the asset allocation to reflect the new time horizon.

Another common question regards the impact gifting may have on the student’s application for federal aid. While 529 plans owned by parents are considered, 529 plans owned by grandparents are not on the FAFSA (Free Application for Federal Student Aid) form.

Changes to the original 529 structure have rendered these accounts even more valuable. The Tax Cuts and Jobs Act expanded the eligibility of 529 accounts for private and parochial K-12 schools. Then, the SECURE Act allowed 529 funds to be used to pay down up to $10,000 in student debt.

Starting in 2024, the SECURE 2.0 Act allows 529 funds to be rolled over into a Roth IRA at the annual contribution limit up to a lifetime maximum of $35,000 for a beneficiary. The account needs to be open for at least 15 years. Still, having an account grow in a tax-free environment and removing the distribution restrictions presents a valuable new investment tool.

Speak with your estate planning attorney about how to incorporate the benefits of the 529 account into your estate plan to help family members achieve educational goals and plan for estate taxes.

Reference: Kiplinger (Dec. 20, 2023) “529 Plans: Give the Gift of Education (and Compounding)”

Can Grandparents Give Money to Grandchildren for College?

“As the cost of college tuition skyrockets, parents and grandparents can take advantage of tax-efficient 529 plans and higher limits on gift and estate taxes.”

Helping grandchildren prepare for long-term success and easing the financial burden of college costs is a gift for two generations, as mentioned in a recent article from Kiplinger, titled “529 Plans: Give the Gift of Education (and Compounding).”

Giving cash directly to children or parents isn’t the best long-term strategy. Once the money is given, control is surrendered, and the gift may not be used as intended by the giver. Saving for college is one of the significant financial challenges parents face, especially considering the high inflation of college tuition costs. Between 2021 and 2022, U.S. college tuition rates increased by 12%.

This is where estate planning intersects with the new year. As the current historically high estate tax exemption ends at the end of 2025, managing the size of one’s estate becomes a higher priority. The structure of 529 college savings accounts can be used for tax efficiency and to control the eventual use of the gift while taking advantage of long-term compounding.

Current gift tax rules allow individuals to gift up to $18,000 per year per person. Therefore, a married couple could gift $36,000 to each child and grandchild without it counting against their lifetime exemption or requiring them to file a gift tax return. However, the 529 is even more advantageous, allowing a five-year front-loading of such gifts per recipient.

If your state has a plan, funding 529 plans offers deductions on state income taxes. If your state doesn’t have a 529 plan, you can open an account in another state but won’t receive the tax deduction.

There have always been concerns about overfunding a 529 account or having unused funds if the beneficiary decides not to attend college. Most plans allow account owners to change beneficiaries without any tax consequences as long as the new beneficiary is a member of the current beneficiary’s family. If the new beneficiary is younger than the prior one, it may be wise to change the asset allocation to reflect the new time horizon.

Another common question regards the impact gifting may have on the student’s application for federal aid. While 529 plans owned by parents are considered, 529 plans owned by grandparents are not on the FAFSA (Free Application for Federal Student Aid) form.

Changes to the original 529 structure have rendered these accounts even more valuable. The Tax Cuts and Jobs Act expanded the eligibility of 529 accounts for private and parochial K-12 schools. Then, the SECURE Act allowed 529 funds to be used to pay down up to $10,000 in student debt.

Starting in 2024, the SECURE 2.0 Act allows 529 funds to be rolled over into a Roth IRA at the annual contribution limit up to a lifetime maximum of $35,000 for a beneficiary. The account needs to be open for at least 15 years. Still, having an account grow in a tax-free environment and removing the distribution restrictions presents a valuable new investment tool.

Speak with your estate planning attorney about how to incorporate the benefits of the 529 account into your estate plan to help family members achieve educational goals and plan for estate taxes.

Reference: Kiplinger (Dec. 20, 2023) “529 Plans: Give the Gift of Education (and Compounding)”

What are the Federal and Gift Tax Exemptions for 2024?

“The federal gift, estate, and generation-skipping transfer (GST) tax exemptions and the annual exclusion from gift tax are historically high due to a temporary increase under the Tax Cuts and Jobs Act.”

Unless Congress acts, regulations that elevated exemptions will expire at the end of 2025, and the exemption will be cut by about half, says the article “Take Advantage Of Increased Gift And Estate Tax Exclusions in 2024” from mondaq.

Those whom the gift and estate tax may impact should speak with their estate planning attorney about using this historically high exemption. Many estate planning strategies can be used to transfer wealth and take advantage of these exemptions efficiently.

In November 2023, the IRS announced increases for gift and estate tax exemptions in 2024, including an increase in the federal gift, estate, and GST (Generation Skipping Tax) exemption and the annual exclusion from gift tax. These changes became effective on January 1, 2024.

The gift and estate tax exemption has increased to $13,610,000 per individual in 2024. Married couples can transfer up to $27,220,000 since both partners may utilize the exemption. This marks a substantial increase of $690,000 per person ($1,380,000 per married couple) from the prior year.

Generally, gift and estate taxes may be due if a person’s total wealth transfer during their lifetime and at their death exceeds the gift and estate tax exemption.

The GST tax exemption increased to $13,610,000 per person in 2024. This tax may be triggered by transfers to or in trust for family members more than one generation younger than the donor. It might also be triggered by gifts to unrelated individuals who are 37.5 years younger than the donor.

The annual gift tax exclusion increased to $18,000 per donor, per gift recipient, and $36,000 per married couple splitting gifts. The annual gift tax exclusion permits individuals to make gifts to any amount of people tax-free every year without being counted against their lifetime gift and estate tax exemption.

An experienced estate planning attorney will explain the time-sensitive opportunities presented by the increases in 2024 in conjunction with the current (yet temporary) exemptions.

Now is the time to consider funding trusts with assets expected to have high growth potential, using a portion of the gift tax exemption while removing future appreciation from the estate.

Reference: mondaq (Dec. 21, 2023) “Take Advantage Of Increased Gift And Estate Tax Exclusions in 2024”

What are the Rules for Inheriting an IRA?

“Know what to expect if you inherit an IRA and how to establish a plan for taking distributions.”

Inherited Individual Retirement Accounts (IRAs) are created when the funds in an IRA or employer-sponsored retirement plans are inherited after the original owner dies. The beneficiary may not make any additional contributions to the account and must comply with a series of rules regarding the inherited account or face an expensive tax situation. A recent article from U.S. News & World Report, “What Is the Inherited IRA 10-Year Rule?” explains the basics beneficiaries need to know.

What is the Inherited 10-Year Rule? The rule applies to those who inherit an IRA on or after January 1, 2020. In most situations, all funds must be withdrawn within ten years of the previous owner’s death, but there are exceptions depending on your age and relationship with the deceased. Spouses who inherit an IRA have options, as do beneficiaries who meet certain criteria.

The inherited IRA 10-year rule was part of the SECURE Act. Before then, a non-spouse beneficiary could take required minimum distributions (RMDs) based on the heir’s life expectancy. Following the SECURE Act, funds from an inherited IRA must be withdrawn over ten years. This eliminated the ability of the beneficiary to keep the retirement account funded for the rest of their life and gain the advantages of the long-term tax-free growth of the IRA.

Does the 10-year rule apply to you? The exceptions to the 10-year rule are:

• The IRA owner’s surviving spouse
• The IRA owner’s minor child
• An individual who is not more than 10 years younger than the IRA owner
• A disabled or chronically ill person, as determined by IRS rules.

If a minor child inherits the IRA, the 10-year clock starts ticking once they reach the legal age of adulthood.

Heirs may take the entire amount from the IRA, but it will be taxable as regular income.

For spouses, there are decisions to make. The surviving spouse may open and transfer the assets into an inherited IRA and then withdraw funds during the 10-year timeframe. If the decedent was taking RMDs from a traditional IRA at the time of their passing, the spouse would need to take the RMD during the year of death if it wasn’t already taken. Otherwise, the spouse can wait until they reach the required age to take RMDs from the account.

If funds are taken from your own IRA before 59 ½, there is a 10% penalty plus taxes on the withdrawals. However, a surviving spouse under age 59 ½ could open an inherited IRA and start taking distributions.

There are strategies to optimize the 10-year rule. One strategy is for the owner to name a Charitable Remainder Trust as a beneficiary for your IRA. A CRT is an irrevocable trust that generates an income stream for the beneficiary with the remainder of the assets after the trust term. The trust term can be longer than the 10-year inherited IRA limit, allowing the beneficiary to stretch tax benefits longer.

An estate planning attorney can help you navigate the complex rules about inherited IRAs and determine how to use traditional and Roth IRAs to manage your tax liability.

Reference: U.S. News & World Report (Dec. 18, 2023) “What Is the Inherited IRA 10-Year Rule?”

What Happens to Your Digital Assets when You Die?

“However, believe it or not, if you don’t have a ‘digital estate plan,’ your online footprint–email, social media, cloud storage, etc.–could live on forever.”

If you have a will and trust prepared by an experienced estate planning attorney, you have started the estate planning process. If your estate plan includes a plan for your digital assets, give yourself extra points—because most people don’t, especially seniors.

While many millennials have appointed a digital executor in their estate plans, according to an article from Consumer Affairs, “Your digital legacy could be exposed after you die,” almost 90% of people 65+ are unaware that they need to address their digital legacy.

If you don’t have a documented digital estate plan, your executor and heirs will face many online problems, including identity theft. Someone needs to be named as your digital executor, with clear directions on what you want to happen to your digital assets in case of incapacity or death.

That means they’ll need to be named as a legacy contact on platforms with this feature, added to accounts as contacts, or have access to your login and password information. In some cases, they’ll also need to be able to access your email accounts and/or your cell phone for those digital assets having two-factor identification.

If your login takes place using facial recognition, this is especially important to take care of while you are alive and well. It could lead to months of delays for your executor and heirs.

If digital accounts are left untended, it’s possible the information could be hacked. On some platforms, inactivity leads to accounts being shut down and, in some instances, data being deleted permanently.

If there are disagreements over your digital assets, the problems can be just as bad as disagreements over traditional assets. A digital estate plan can prevent confusion and ensure that sensitive information remains in the hands of the person you’ve chosen to manage digital assets.

You can leave your digital legacy to fate and hope someone will take on this task. However, then you risk accounts and assets going missing. Unlike traditional assets, where monitoring the mail will eventually bring a statement, digital assets are nearly impossible to identify unless someone besides you knows they exist.

An inventory needs to be taken. While this may seem onerous, imagine trying to do it for someone whose assets, passwords, etc., are a complete mystery. Even something as simple as paying a utility bill can become a challenge without having login access.

Document login credentials, passwords and security credentials for each asset. Some people use password managers, while others are more comfortable with spreadsheets. Just be sure to protect the information so it can’t be easily obtained.

Appoint a digital executor in your will. This should be someone you trust with these assets and who can navigate the online world.

Don’t include the passwords, logins, etc., in your will, as your will becomes part of the public record when your estate goes through probate. Talk with your estate planning attorney about how your state addresses digital assets.

Reference: Consumer Affairs (Dec. 18, 2024) “Your digital legacy could be exposed after you die”