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hello everyone thanks for taking time out of your day to join us for today's webinar on estate planning and digital assets my name is caitlin aiken and i'm of spring water wealth management uh before we get things started i just want to remind everyone that your cameras and is are off and your microphones have been muted if you'd like to ask a question at any time feel free to use the chat function at the bottom and then we'll answer questions at the end this webinar is also being recorded so that way if you want to come back to it later it can be viewed on our youtube channel when this is over we'll send out a link with that once it gets uploaded to our channel as mentioned earlier we're going to be talking about digital assets and estate planning and our guest today is michael walker of the samuels yolen kanter he's an estate planning tax and business attorney who has worked with individuals and businesses for over 30 years he graduated from lewis and clark law school in the college of idaho he's conducted several seminar presentations about complex estate planning issues surrounding digital assets and as an active member in the portland community also joining us today is jim corbeau for from spring water wealth management and spring water is an independent fee only financial advisory practice with offices here in portland and in santa cruz california that being said gentlemen take it away thanks caitlin really appreciate the introduction um i'm really excited to have michael walker here today to talk on this very important and topical subject michael um why don't we get right into it and maybe start off by having you tell us a little bit about your practice well jim first of all thank uh you for allowing me the time to uh spend a little discussion time on digital assets today my practice is estate planning business uh tax advising in really both of those areas uh and uh you know work uh you know all facets of estate planning wills trust powers of attorney healthcare directives and on on the business side business formations business transactions mergers and acquisitions and really all the tax issues that weave through those areas great and now you mentioned in your in the description of your practice estate planning could you take a couple minutes and just kind of share with the audience what the basic components are of a of an estate plan well the the starting point jim is is to really look at the individual look at their look at their family look at their where they are in life what their objectives are and get a very good sense of what their assets are in terms of value but also what those assets are because different assets are treated differently in the estate planning process the the components typically are a will sometimes we do a revocable living trust don't want to get too deep in the weeds there that helps avoid probate [Music] general powers of attorney generally that's a disability planning tool advanced directives which typically appoint a healthcare representative to make decisions if and only if you're not able to make those health care decisions yourself and and really other ancillary documents that are particular to the the particular individual it's it's not a one size at least the way our firm practices is not a one size fits all process it really begins with getting to know the folks and their family situation and understanding their assets um and so we can do a good job for them great is is it fair to say that there are sort of core components to an estate plan but that the plan can become more complex or broader depending on the particular circumstances of the client well it it can get very complex we we strive to not make it that way if it if if the situation uh if there's a simpler route to meet the client's objectives we you know we we want to take that we don't want to overly complicate things uh like to write documents that folks folks can understand uh we typically do a nice summary letter when we send out draft documents so folks can use that as a roadmap to understand their documents and you know so if we can keep things on the simpler side we do but some folks have you know complex family situations complex asset situations they have particular objectives uh maybe for their family maybe charitable giving that it's really those objectives that are sort of the the leading indicator of what the estate plan is going to be sure excellent um i have another question on my list but i think i want to save this one for the end because it's uh it's always one of the more challenging ones to answer but maybe we can get into the heart of the the conversation now and talk about you know what what digital assets actually are and then secondly why they're important so maybe you can chat a little bit about that sure well um most of us do have digital assets we may not recognize them as such from from a legal standpoint there's a statute that we'll talk about today but from a legal standpoint a digital asset is an electronic record in which you have a right or an interest so that's some legalese so what is what exactly does that include well certainly email accounts social media accounts digital photos wherever they may be stored online or on personal computers electronically stored music and books online banking information uh cryptocurrencies like bitcoin uh reward points uh with with airlines and other other travel companies um it could be intellectual property that is actually stored in some digital format and so for most of this you look at that list it's like well i i have all of those and so for most of us it's a significant facet of our financial and and personal lives and when the dilemma comes that if we die or if we become incapacitated what happens uh because in an earlier era when someone was administering an estate or taking care of an incapacitated person you would look at the mailbox the postal mailbox and statements and lots of information about the parents person's finances would arrive in that mailbox well today the mailbox can be very digital we were all encouraged to have paperless statements so there's so much of this financial information that may never be reduced to paper it's all in a digital format it may be arriving by email account and so when you're administering someone's estate or taking care of an incapacitated person just being able to get to that information can pose a real dilemma and so that's that's why it's important um and uh we can we can break that down a little bit more as we go along here sure so so what does you mentioned the law around digital assets what does the law say about digital assets well there there are both federal and state statutes that affect digital assets probably the key federal statute is one frankly out of the mid 1980s called the stored communications act and it it really prevents parties like online providers someone that you have an online account with prevents those providers from disclosing your the content of your digital information unless they receive the required consent and this is where it gets key when we look at the state law required consent of the owner so that can be problematic and we'll break that down as to what it means now the state law statute is really what when you get down to the practical aspects that affect all of us and how say a fiduciary can access our information so what do i mean by fiduciary a fiduciary is a personal representative a trustee an individual appointed under your power of attorney anyone that you've appointed in those kind of legal documents to act on your behalf typically if you're in in the case of a will or trust you're a deceased um revocable trust uh can apply to an incapacitated disabled person uh a power of attorney typically that's coming into play if you're incapacitated um and the state law statute is a is a uniform statute that has been now adopted by 44 states including oregon and washington and it's this is a mouthful the revised uniform fiduciary access to digital assets act i'll only say that once we'll go by the acronym rifata so if if you hear that funny word rafata it means that state statute that controls digital assets and it really has three tiers that you look at to determine if your fiduciary can go to somebody like google and say i want access to this individual's gmail account because they are now deceased when you look at rafata's structure if there's an online tool that that provider provides then you have to access those digital assets by using that online tool actually most people don't um a lot of providers don't even have an online tool so most people don't have that so if there's no online tool what comes into play next well the second level is your own will trust or power of attorney okay but that those documents need to be explicit not just sort of vague that i'm giving this this person all the things that i could do if i were doing it myself but it needs to give explicit consent that that person has the ability to access your digital assets because if it doesn't have some of those magic words then uh your fiduciary won't be able to go to someone like google and say i want access to the gmail account so if you do not have those kinds of provisions in your will or trust or power of attorney then you're down to the third level and i can tell you that's not where you want to be because the third level is that providers term service agreement and generally those term service agreements don't provide that a fiduciary can have access to your account it's it's only if you've given some explicit consent for that fiduciary to access so that's that's really where the dilemma is in the estate planning process is we want those documents to be up to date and clearly state personal representative trustee power of attorney you do have my clear explicit access permission to access my digital assets uh because then we're if we have that the person just the same as if they were looking at your postal mailbox they can now look at your email box and so let me let me pause there and see if maybe i'll let you ask uh maybe yeah well i certainly have a question and and i think i'm gonna um i think i already know the answer but if i'm like most people and the extent of my planning so far for digital assets is to have a post-it note at home with my password for my google account and maybe for my bank account that my spouse or partner can use if something happens to me i've really put myself and that and that person that spouse or partner in a precarious situation is that is that the right thing yeah they are in a precarious situation because if from a legal standpoint we want um we want it clear that your fiduciary has the ability to use the information on your post-it note jim and so it's it's a situation where they probably don't have that legal authority under refata unless there's a clear indication in the estate planning documents now probably a lot of administration of a decedent's estate or a a disabled person there's probably a lot of business that actually still gets done from the basis of that post-it note but it's you know if we're saying okay what's best practice you know we'll dig into that a little bit more but but probably the post-it note is is not best practice uh that we want to be thinking about yeah that's excellent um so it so if we're um as financial advisors talking with our clients about periodically at least reviewing if not updating their estate plan um taking now into account the fact that they they should really have a conversation with their estate planning attorney about including provisions for digital assets how often should they look to review or update that that revised or expanded estate plan well generally for for most clients we recommend every five years at least taking a look at the documents maybe getting in touch with us uh these these kind of documents are impacted externally by what happens um in changes in the law changes in state law changes in the tax law well that never happens um and when when those changes come about uh the ground is really moved under under your feet those external changes um where the law may shift what the result of your estate planning documents actually are i mean it may have been a great fit five years ago but but now it's uh you're out of sync certainly internal changes if you have a change in your health situation changing your family situation changing your asset situation a lot of times those are internal changes that necessitate getting your documents uh backed up to date great um now i i don't know um how your firm handles this but should a should a client of ours should uh uh someone participating in this conversation reasonably expect the person who drafted their estate planning documents to reach out to them if there's been a change as you said in the underlying landscape the law or should they really follow some other resource so that they can proactively reach out to their attorney and and start the conversation about a potential need to update the plan well it it never hurts to make a brief call to the uh person that put your estate plan together um i i think a proactive communication like that um a lot of us in the legal industry we have on our website blogs and things where if we see a particular item that is of critical importance to clients and we encourage clients to subscribe to that blog so that if there's a a new article they'll get some sort of a notice and so we do try to reach out um certainly if if we have uh ongoing work for a client uh we we reach out on that basis but as you might expect when when you have lots of clients so over many years it's it's very very difficult for us to reach out to everyone uh individually and so you know primarily you want uh to be looking at your documents uh every couple of years you know not more than five but but if there's those kinds of external or internal changes pick up the phone send an email reach out to your estate planner absolutely uh well the last question that i have before i turn it over to caitlin to see if we've had any questions from uh from the attendees is the one that certainly we as financial advisors always get is what can i reasonably expect to pay for your services in other words what what can someone with a fairly typical situation expect to pay for an estate plan and digital assets and i'm cognizant of the fact that every situation is unique and we don't really want to pin you down to a particular price point but perhaps you could talk about a range so that people have a sense for what it costs to put together their initial estate plan and then incorporate uh provisions for these digital assets yeah well you know it's it is a very individual uh thing for for for really basic estate plans a couple with children they just need a will power of attorney we we really strive to keep those under a thousand dollars for for individuals that have substantial assets their family situation is complicated and hence their their estate planning documents need to address those complications um it's it really runs runs the gamut in terms of what those costs can be and it's it's it's a good question it's a typical question my practice is uh to sit down with folks and talk through what we want to do and then before they commit to going forward i've given them a really solid estimate of what what the process will cost uh because as i as i said earlier i mean at least the way our firm practices it's not a one-size-fits-all process we like to get to know folks and craft the estate plan in such a way that is is specific to them um and you know i think maybe other offices uh view the process a little bit more commoditized if you will um but it's not our style excellent that's great um well caitlin um do we have any questions for michael in the chat uh we do actually so we had the first question is uh the granted the person who is granted access do they need to be an adult um certainly a fiduciary needs to be over 18 yes okay and then that's typically statutory in most most states that you need to be over 18. okay perfect and then the next question is can these provisions are regarding digital assets be handled with amendments to current wills and trusts and how complicated is it to updat the if if all we would be doing is just doing some amendments to address the digital assets those are those are really short amendments uh you know probably two pages for each document uh for for a will we'd call that a codisol for a revocable living trust that would be an amendment for powers of attorney if they're out of date uh typically powers of attorneys run about five to six pages we'd probably just do a new updated power of attorney that includes the digital assets provisions so if if that's all we're doing it it probably is a fairly short easy not expensive assignment uh but as i talked about earlier you you want to look at your if your estate plan is is maybe out of date it's been over five years maybe this is a good opportunity to to have a look uh certainly with pre-existing documents if they're not broken we don't seek to fix them um and if all we're doing is possibly adding uh some digital asset provisions that that's that's not a major overhaul by any stretch okay and then so the next question um is given the pandemic how are people signing and witnessing wills can they be notarized online and given that there's a difference in organ and how will is treated if it is notarized or not is that accurate really caitlyn really good question i appreciate that from from one of our audience here it's something we're grappling with now certainly if if we can meet in a safe manner and meet with clients with masks and proper social distancing um we we like to do that and i've had lately i've been to clients homes several meetings on the outdoor patio where we're we're able to spread out um and uh still take care of a proper signing everyone is messed up and so uh and we're we're sufficiently distant so um that's uh that's the preference and we can do in our office we have a large conference room we do a similar thing now online it gets a little bit more problematic now the oregon legislature just two weeks ago for the first time allowed online notarization so a lot of our documents like trust and powers of attorney are notarized the the secretary of state's office is still in the process of uh issuing implementing rules uh because if you're a notary you have to actually get an extra qualification to do online notarization so it's it's in the works and we should have that capability uh very soon but it was just in the the special session a few weeks ago that the oregon legislature allowed that for things like wills if if we had to we could have a client sign a a will watch them do it online and then when we were able to safely get together again with them have them verify their signature and wills require two witnesses we'd have two witnesses sign their will what would happen if the person passed away during the interim and we weren't able to do that second step well oregon has what's called a harmless error statute that if it can be shown that the person in fact signed this will um and uh us as attorneys if we watched it sign online we could do an affidavit to the court verifying that the harmless error statute would come into play and in most instances we could admit that will to probate so there are some workarounds certainly we can be creative we've done some will witnessing through the kitchen window standing in the yard outside and so we have to look at the the particular situation if someone is is vulnerable from a health perspective to covet probably we'd be looking at more something like that to just for for extra precautions so the the law is is evolving towards more online uh verification of these kind of documents but it's it's still a bit clumsy um the law is is trying to catch up with some of these issues right i think caitlyn we have time for one or two more questions and then we'll uh we'll wrap things up all right perfect i have two more actually so uh the next one is any specific comments regarding password manager apps yeah um big picture be careful because you think about from a hacker's perspective if they were to they hack into the provider of that app it would be a gold mine for a hacker seeking to steal your identity impact your assets in a criminal way and so it's really important that you do your due diligence on the provider of those uh apps uh read their terms term of service agreement do they stand behind if there is a a security breach or does their term a service agreement say uh we're uh not liable for any of your damages should there be a security breach so what i would say is on the first tier of concern you know watch the security situation um beyond that i i think various very reputable companies are beginning to produce a password app uh that that does make sense because that is that is really a dilemma keep in mind that that that is that app in and of itself and access to this app is something that would be subject to rafata so the the the dilemma is you want to be able to get your fiduciary into that app that has your passwords and if it's something where it's stored online and you are you are the fiduciary and you're trying to get to that you you you still want to be able to use the rafata provisions which take you back to making sure that you have updated estate planning documents and so all this weaves together a bit all right that's that's very interesting um so then the last question is is there a short form authorization that can be used in lieu of putting in a will if so what of uh type of formalities are there and that are the for a will the short form would be a short console okay and like i like i said that's that's probably a two-page document that really is an amendment to your pre-existing will it's important to be very careful when you're doing a caudassal because you you don't want to do anything that upsets the the underlying provisions of your pre-existing will just because you're you're doing a quick amendment to address the digital assets um so one needs to be careful um i i would probably caution against finding uh something on the internet uh and and using that because you want to make sure that you maintain the integrity of your underlying will because that have could have some very important uh provisions in it for your family and with respect to your assets and you don't want to do anything that could somehow revoke that will um and so consoles can be a bit touchy they have to be drafted appropriately and really really the same issue if one is amending their revocable trust uh you gotta be very careful on how things are are written and worded all right excellent uh michael i have one last question for you before we wrap things up as you know spring water's been putting together uh in the form of an editable fillable pdf a digital assets inventory that we'll be sharing with our clients once they fill that out what should they do with it how should they secure that and use it as a resource rather as you said as a potential liability or weak point where someone could compromise that information yeah well jam secure is is the key word there because if a a hacker uh someone uh bent on uh criminal uh activity were to find that inventory again it's sort of the mother lode of hackable information that they would like to find so make sure that maybe if it's just on your personal computer um it's it's encrypted but the the other aspect is really the practical aspect if if a person dies or they become incapacitated you want to have the ability for your fiduciary to step into that inventory because i've read the inventory very very well done and i think it's a helpful tool sometimes what we've seen is is clients put it on a usb drive and say put that usb drive in a safe deposit box and uh update that occasionally maybe someone has a safe at home um and what you want is the ability to uh have your fiduciary gain access to that inventory when and if they need to do that but probably not before it depends on who the fiduciary is maybe it's just fine but but generally you want that information only placed into the hands of the fiduciary when when they actually are starting to take care of the administration of your estate or taking care of you if you're incapacitated so if if a person puts it in a safe deposit box for example whether it's in paper form or on a usb drive then a a personal representative of a decedent or person with a power of attorney will be able to go to the bank and gain access to that safe deposit box and you know there there could be other other means that you can talk about in terms of short of a safe deposit box to getting the giving access to that inventory to your fiduciary when and if it's it's needed but but maybe not before then so you want to talk about the the the specifics of your particular situation and see what makes sense uh again person folks have to be very careful with with security uh there absolutely well michael we really appreciate your time i know i found this very informative and and uh want to thank you again for for taking time out of your very busy day to join us and our our audience for this uh caitlyn thank you so much for moderating do you have any closing comments for our audience um the only closing comments that i have is that this again will be has been recorded and then we are going to upload it to our youtube channel so we will send out a link for this video along with actually a copy of your own digital assets inventory and then next month we'll also have another webinar with details soon to follow so again we appreciate you guys taking the time out of your afternoons to join us for this webinar so it was nice to see everyone come out and join us today thank you very much thank you michael thank you caitlyn thank you jim thank you caitlin yes thank you for everyone for coming