There’s an upcoming Supreme Court vacancy – what does that mean for the future? Also, technology is advancing at a breakneck speed. What can you do to make sure your estate plan is keeping pace?
Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and certified elder law attorney and Certified Financial Planner™. Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.
For more information, visit Medina Law Group or Private Client Capital Group.
Click below to read the full transcript..
Victor Medina: Everybody, welcome back to Make It Last. I’m your host Victor Medina. I’m glad you can join us this Saturday morning.
I have spent the last few episodes focusing on retirement planning, specifically, on financial planning. We went through our short, mid, and long‑term buckets. We talked about what should be in your mid‑term bucket.
I realized I neglected the legal side of these two hats that I wear. I figure I’d spend some time this episode covering some more of the legal issues that have come up in a most recent set of months or so since we’ve covered it.
We actually have two big things that I want to cover today. I want to cover the announced vacancy from the Supreme Court. Anthony Kennedy has announced his retirement. I want to talk a little bit about how that’s going to impact the legal world, generally speaking.
Then we’re going to talk a little bit about how to plan around digital assets and where we are in the 21st century of planning and what that means because it’s something very different that I think it might have even been 10 years ago.
Let’s first start with the personal stuff that I’ve had going on because I know a number of you have asked about that. I want to bring you up to date because we’ve got some really promising news and I do want to share a little bit about that.
I had somebody who’s very close to me be diagnosed with stage four lung cancer. If you ever experienced that in your life you know that of course, that’s a world changing diagnosis. When that happens, the world stops, and the entire family is now dealing with it.
Even one person has been diagnosed, the entire family essentially gets diagnosed with his lung cancer. It’s been quite a journey. It’s been over the last six weeks or so. I’m, first of all, very thankful to the people back in my office that have kept the business running while I have been pulled out to help deal with the family matters around this.
On the other hand, I’ve also been incredibly blessed to have the opportunity to help this family member along the way. I just have never really thought much about what it would take to be in that position and now that I was pulled in, I reflect on it as though it is an incredible honor, which it is, an incredible honor to be able to help.
There’s good news from that. One of the pieces of good news from that is, we’ve been able to discover a way of treating this that isn’t as hurtful or harmful as traditional chemotherapy.
We’re going to be able to use a pill and that pill is going have a very high degree confidence, likelihood of helping. This family member is very encouraged by that and will be able to focus on living with the lung cancer as opposed to suffering from it, which is great. We’re thinking about this in terms of buying us time and buying time for the future.
I will suggest to the purpose of sharing it with the show is not only is everything OK here at least in the short‑term, but what you do on how you reframe the things that are going on in your life is so important. We’ve had the opportunity to think about this in terms of what gifts have we been given along the way, what gifts are we continuing to be given along the way.
By refraining it that way, you’re able to focus on the things that are in the present and continue to build and plan for a future. If you get wrapped around a whirlwind as one tends to do, then it can draw you down, so it’s important.
What do we even do to get yourself in that position? I would recommend, I’ve recommended here before, this is really getting into mindfulness. If you’re interested in learning more about that, I recommend a book called “10% Happier” by a guy named Dan Harris. He’ll take you through his journey, or some follow‑up books. There’s even an app. It’s probably one of the best things you can do.
All right, enough about me. Let’s talk a little bit about most recent news. Lot has been dominating the news around the announced retirement of Justice Anthony Kennedy.
Let’s go with the Supreme Court perma real quick, which is there are nine Supreme Court Justices, and they are appointed for life. Once you’re appointed, you either retire of your own volition, or you die. That’s it.
There are no other ways of getting out. You can’t impeach them. These are lifetime appointments. I suppose if something really, really bad happened, somebody might start something to get them out. These are lifetime appointments. You can’t vote them out. There’s no terms that are associated with that.
It’s a very important role in terms of the balance of powers that are out there between the executive, judicial, and the legislative branch. One of the reasons why the Supreme Court Justices have lifetime tenure is so that they can balance the interests of the minority, because they’re not dependent on the majority to be voted into office the way the other two branches are.
Now as to Justice Kennedy specifically, he’s fallen into a couple of different categories and has long been regarded as a swing vote. Why is he a swing vote? One of the reasons why he’s a swing vote is he holds a lot of Libertarian views. Libertarian views, largely, being the idea that they’re into lots of different freedoms. The freedoms go on both sides of the political aisle.
When you have a Libertarian bent, you are looking for a very liberal approach to social matters. You will be pro‑gay rights. You’ll be pro‑abortion. You’ll be pro‑these lifestyle choices that people make. You will be on the more liberal side of that because you want people to have more freedoms.
On the other side of that, when it comes to fiscal matters, you’ll also want people to have a lot more freedoms. That looks like a conservative view. What you want is less regulation, less government interference. You want to support the freedoms that come from association, employment.
Kennedy often served the role of swinging 5‑4, 5‑4 on these types of issues, because he would play conservative ‑‑ and I’m using air quotes with that ‑‑ on some of the issues, and he would play liberal on some of the other issues. We haven’t really had a justice like that for a while.
Most of the time when we have a justice that is retiring or has passed away, you tend to replace them with almost a carbon copy of the same role. What you’ll find is, over the course of the last few vacancies and replacements, they have been replaced with like‑minded justices.
If they were conservative justices, like Scalia was, he was replaced with largely a conservative justice. Similarly, if you had a liberal justice, it was replaced by a fairly liberal justice going forward. What does this mean?
As you’re aware, the current environment is one where conservatives hold the executive branch and they hold the legislative branch, even to a majority in each of the Senate.
When it comes to the ability to nominate a justice, we’re in a position where this justice will likely be somebody who is more conservative, as opposed to balanced, because it will serve the interests of the people that are nominating them. Also, it will serve what can pass in terms of the Senate, who has to confirm the President’s nominee.
When you look at that landscape, you realize there is an opportunity for the balance to shift where, both on the fiscal side, there’s still conservative majority voting, because that’s what Kennedy was doing. On the liberal side, there will now be more conservative voting majorities. That will impact the decisions that are coming out.
There’s good news on the retirement front, which is there really aren’t a lot of issues that have yet to be settled when it comes to the Supreme Court, where we know they’re out there. For instance, we’re aware of abortion rulings, where if that’s overturned, you go to state laws on the rights to abortion.
There are issues with respect to labor rights, and criminal rights. For those, those are largely settled. We don’t have a lot on the fiduciary standard, or state tax planning, or income tax rules that is really coming up before the Supreme Court.
Because we don’t have that situation, we don’t expect the changeover in the judiciary is going to filter down to what we do in retirement planning, but it sure will be an interesting journey.
Victor: We’re already at the political fervor that comes with delaying confirmation, or waiting for the mid‑term election. I’m just going to sit back and watch because I think it’s going to be quite amusing.
When we come back I’m going to talk to you a little bit about digital assets and planning in a digital age, and what you need to do in reviewing your statement to make sure that’s up to date with the changing technology. Stay with us. We’ll be right back on Make It Last.
Victor: Welcome back to Make It Last. I’m so happy you’ve joined us here today. We spent the first segment talking a lot about the retirement of Justice Kennedy and what the replacement for that vacancy is going to look like. I now want to spend some time on some planning for digital assets. The world is very, very different.
When I started college, I’d have to go down to the computer lab in order to access email. This was not something that was on any device. It certainly wasn’t in my room. Even though I had a computer in my room, I wasn’t hooked up to the Internet.
If I wanted to talk to friends using email, I had to walk all the way around campus. Let me tell you, I liked my friends in the fall, in the spring. I wasn’t too sure if I was going to walk and see them in the winter. It was cold out. Of course, after that time, technology has advanced at a breakneck speed.
The whole invention of the Internet, social media, how we access information, the dissemination and proliferation of self publishing and the ability to have your voice heard across a wide audience has completely changed the landscape. It has impacted estate planning. In estate planning, it’s impacted two different ways.
One has been in how documents are created, accessed, and used. The other way is what the documents themselves have to cover. Let’s take that topic first. I think what we’ve seen in the advancement of all, the technology has had the concept of digital assets touch a lot of different things in its definition. For instance, digital asset planning can include getting access to your bank records.
I know now my dad does his banking on his phone. He snaps a picture of the check he wants to deposit and then he rips up the check. He doesn’t visit a bank at all. It’s all done on his phone. With the newest iPhone and some of the Samsung products he can access his account by looking at his phone. His password is his face. That’s very different.
It used to be that you would keep your passwords on a list, on a sticky sheet. It would go into your desk because you would be sitting down at your computer. It was on only one location and therefore, it was OK to take the passwords down in that location.
Now your passwords have to go everywhere where you are. Sometimes your passwords, while they could be words, sometimes you’re accessing your stuff just with your face. You just look at the phone and it logs into your banking. That’s just on the financial side.
We have all of our social media accounts. Our social media accounts can range from dalliances of fancy, things with no real value. Your Snapchats, your Instagrams, and your pictures of your dinner last night, probably not a lot of value there.
If you are a writer and you’ve maintained a blog, or like me, I’m creating content that is available digitally. These are assets that I have created. They’re all of these shows that I’ve had. These are my assets. I own these. They exist largely just in a cloud or the access by a browser or a service.
If you’re somebody who creates content and if that content could be deemed valuable, then accessing that information is an important part of your estate planning. If I were to become disabled or incapacitated, it’s very difficult for somebody to step into my shoes if I haven’t done proper planning. They don’t know how to access my bank records.
They don’t know how to log in and get access to my shows. They don’t know how to get access to the books that I’ve published, the blog that I’ve maintained, my social media accounts which might have financial information associated on it. We take Facebook and for my business, we go ahead and we advertise seminars on Facebook.
There’s a credit card that’s associated with that. There’s money that’s associated with that. If I become incapacitated, I need to have a plan that gets me to access those digital assets if I need my agent to do that. Thankfully, I’m married and my wife knows how to get into our banking accounts. That’s OK, but I don’t really think that she knows my Facebook password.
I don’t think she knows my Instagram password. Not that there’s anything hidden there, but I created it and there was my password. How do I deal with that from an estate planning perspective? I need the opportunity to transfer that information over. There’s two different ways to do that.
The first way is in the documents that you create, we need to include provisions that grant these fiduciaries access to that. If you’ve got a trust‑based plan, like the majority of our clients do, you’ll know that in the section of the trustee powers include the rights to access any digital assets. It enumerates some of the social media stuff.
We haven’t tried to be inclusive about that as though we know all the time what all social media platforms are. We’ve tried to be a little bit more artful with the language. That language is also available in the power of attorney.
Within the power of attorney, we grant our agent the opportunity to access those digital media platforms. If you are somebody at any age, that’s going to become important.
My mom and my dad are on Facebook and they’re on Instagram. They’re looking at my kid, their grandkid’s photos. They’re on there and so they have access to that information. They’re retirees, at a later stage of life. We’re not talking about somebody that’s in their 20s or 30s only that needs access to the social media stuff. You should take a review over your financial powers of attorney.
Many times you don’t have a provision at all that deals with access to digital assets. If you have something, it’s probably underpowered. It probably wouldn’t work if you needed it, because it’s so old that it hasn’t kept up to speed with what the changing environment of all of these things are.
As we do with all of the powers of attorney that we draft, we encourage our clients to take that document and field test it. What that really means is, make sure that it can access what you need it to access. At a very base level, it’s going to your financial institutions and making sure that you get access to money.
At another level, we’re looking at the policies of these various social media sites and trying to get them to say, “No, it’s OK. We have this process for a fiduciary to access your information if you become incapacitated, or if you die.” You’re not going to change their policy, but you should probably be aware of that, anyway. I’m going to give you another hint, which is just going to stay between us.
You’re not going to share this with anybody else. Certainly, you’re not going to tell other people about this hint. The hint that I have is, give one person access to a service that has all of your passwords. If something happens where you become incapacitated, the computer doesn’t know that it’s not you sitting down. Of course, you’re not using your face the way my dad is to access his banking.
Just having access to the password sometimes supersedes the need for some of these documents. I don’t think that you should carry around a copy of all of your passwords. Certainly, you should practice best practices with passwords and have a different password for every site. What you need is a password manager.
Those password managers hold these passwords in a secure fashion so that you don’t have to remember them. You just have to remember one password to access it. There are really two big ones that I would recommend to you.
One is called 1Password by Agilebits and another one, excuse me, it’s called LastPass. LastPass and 1Password do the same thing. You only have to remember one password and it gets you access to everything else. Many times it’s the things that have been saved on your browser and what not.
Victor: Well, you should give your fiduciary that one password. That way they have access to the rest of your information.
When we come back, I’m going to talk about the other side of the digital asset world, the real estate planning world, which is how has the state of the art changed and what do you need to do with how you create your plan, not only what it includes, but how you create to keep pace with technology. We’re going to cover that when we come right back on Make It Last.
Victor: Welcome back to Make It Last. We’ve been talking today about digital assets and planning in the 21st century. Jeez, it happens so quickly. We are here in the year 2018. 21st century happened 18 years ago and the world has changed completely since that time. What we can access today and how we live is completely different.
One of the things that I do is I organize a technology conference for attorneys to try to keep them up to speed with what’s going on in technology. It’s a great conference that happens every year in Disney World and make sure it’s happening during the Food and Wine Festival because I’m a huge Food and Wine Festival fan.
I make sure I fly down early the day before so that I can just gorge all over the world at Epcot. The conference itself has been going on for 10 years, and I will tell you that what we cover this year is very different than what we’ve covered in the past. As an example, in the past, the technology was a computer that was sitting on a desk.
We really weren’t even in the world of laptops, and the laptops were underpowered. Today, or this year, the conference is going to cover how to operate your practice just on an iPad. What does that world look like, and that advancement of mobility, the ability to access and manage your life from something that’s in your pocket is a complete change to the world that it was before.
If you listened at the top of the show, I talked about my family member who was going to go into a sort of his health crisis. One of the things…because this is a close family member, I was able to do their estate plan. They trusted me to do their estate plan. I have their estate plan available and when I’m with them I have 100 percent of their estate planning documents accessible on my phone.
It’s done in a secured way. It’s got all the password protected. It’s not on a public site. It’s not on Dropbox or Box.net. It’s on a private site but we’ve got access to that information. The nature of estate planning has changed. It used to be that we would have this very fancy paper and it would have nice creamy linen and you would unfold it, this thick document.
At the end of the day, my clients, they’re working more from the thumb drive that we give them at the end of that planning than from the paper itself. Don’t get me wrong, the paper’s important and you want to guard the paper, but at the same time for that plan to really be useful, we need an electronic format.
We convert all of our plan documents to PDFs. Why do we use PDFs instead of Word documents? Well, PDFs are images, and they are universal. Somebody doesn’t have to have Word, but also has signatures on it. Those signatures are graphic and we want to be able to have the entire plan with the signatures with the notary block available on a PDF.
For my clients who are parents of younger children, they’re going to need those documents, because they’re concerned with guardianship over their minor kids. Sharing those PDFs, or having them on a form of a public site makes it easy for the people that they’ve nominated to step in and get access to them.
You can create a Dropbox or Box.net and share a folder with a fiduciary. We recommend, we put this stuff on a thumb drive. You might want to upload it to your own private site and be able to share that with other people that are important to have that information. We have a service where our actual planning documents, we can create in a folder, and that we can grant access to our clients.
If you’re on our client maintenance program, you have a login to your estate planning documents. We give people the opportunity to go ahead and upload financial documents if they want. It’s their own little private site that we’re maintaining for them. Of course, we wave some liability. We’re not going to be responsible for this as though we were a big company.
If you’d like to use this, you can go ahead and use this as a place that you can then give other people access to that as well. We want to spread that information and having the documents available digitally is an important part of that, and making sure people know how to access that.
We will give out as many thumb drives as somebody wants. If they want four thumb drives in order to spread them out to their agents and their fiduciaries and have, great. I want those people to have that information but we need to safeguard that. We want to make sure that those documents are password protected, because some of those documents are very sensitive information.
One of the things that we tout as a benefit of trust‑based planning is the idea that you are not bound by public filings. You can go ahead and have this be a private affair. We can have a private affair as long as somebody doesn’t find the PDF. You find a PDF, they’re going to access your plan. Making sure that they’re password‑protected and people know how to access that is an important part of it.
We want to make sure that the documents are digitized, and they want to make sure that they are available to the fiduciary. Then last element of it is we want to make sure that the planning itself is keeping pace with the change of technology.
I mentioned before that when we were doing plans, it was this fancy paper and we were doing it at a time where to access the Internet was to sit down at a computer that was locked in one part of your house. I don’t know anybody that sits down in one part of my house to access the Internet.
Everyone’s got a phone, an iPad or a laptop. They’re sitting wherever they damn please. They can be in Starbucks and they’re accessing their life. Because the landscape has changed immensely from when we started, we wanted to make sure that the planning documents themselves are keeping up to date with that.
That means being in some form of a regular updating schedule. We do that in our firm on the basis of a client care program. We don’t charge as much for that client care program as we do for initial planning. It’s a lower cost but if you’re on the program, you get a new plan every year. Many times it’s very cost‑effective for us because we’re just changing the dates on them.
You’re not making a lot of major changes but it’s important because if we’ve got form changes, if we have changes to the power of attorney form, we’ve now learned the Facebook wants particular language and we’ve incorporated that in a power of attorney,
Our clients on the client maintenance program have that updated.
They know exactly that they’re going to have a plan that works at least to the last based form. You want some form of updating and regular updating, because, again, the landscape is going to continue to change.
I don’t know what’s going to happen in the future. Maybe we’re going to have something embedded in our foreheads that’s going to access everything, and to access that you need some certain language to be able to pull it off of your head and point it onto somebody else’s. I don’t know. I’m watching this show called “Altered Carbon,” where your consciousness lives forever, and you just change bodies.
That’s frightening because sometimes they put you in a whole new body and in that show, the body you have is dependent on the amount of money that you make. I’ve got a little piggy bank started. If we’re in an Altered Carbon world, I will have at least a decently looking one. At least as good looking as I am today.
I don’t want to go backwards when we switch bodies. Again, I don’t know what that landscape in the future is going to look like. We want to make sure that we have the structure in place to keep the estate planning up to date with those changes. You know that those changes go just not on technology, but your own personal and financial circumstances.
People live, die, get divorced, move, you change your mind about who should be in charge. You open up new accounts. You buy a home. You sell a home. All of those things are moving parts.
If you are not regularly visiting with your estate planning attorney to make sure that that stuff is in line with what your current life looks like, you have as risk that when you need those documents, something bad will happen. Means, keep your estate plan up to date.
Make sure that your estate planning documents cover at bare minimum. There should be a provision in there that says, “Digital assets.” Go check that.
If you don’t have that, know that you’re at risk, especially if you have something really, really important on your medium account, on your Facebook account, on your Snapchat, whatever it is. By the way, if you didn’t know what half of those words are, we got to get you up to date. We have a technology training for you.
That’s it for the show for today. Listen, if you like the show, one of the things that you can really do to help us spread the word is let everybody know that this show is available as a podcast. They can go to iTunes. They can go to Spotify. They can go anywhere they want where podcast is available. Do a search for Make It Last and they can subscribe to the show.
Not only will they get this show, they will get every show after this, and every show before this, and we’ve done 61 of these already. We’re going to continue to do this. If you know somebody that might be interested in this, you can absolutely do that. One more thing that we do, by the way, is when we put this show up, it’s available on Facebook Live.
If you go to my law firm’s website, Medina Law Group, and you join or like it, you will get notified when we’ve posted a new video so you can watch that show and see me in my environment as I’m recording it. I’ve got a little bobblehead. Those of you who get to watch it, get to see that I’ve got a bobblehead. It’s a bobblehead of me with more hair, but it’s a bobblehead anyway.
Share that information please and spread the word so that more and more people are listening to this. One more piece of information, which is that we have a seminar that’s coming up on July 18th. I will remind you about it in the future. If you’re interested in joining us at the College in New Jersey and Ewing, send us an email at our law firm site. That’s email@example.com.
Say that you want to join that seminar. We will go ahead and invite you to it. It’s absolutely free. Vary information, about an hour and a half, two sessions 12:30 and 5:30. I am done for today. Thank you so much for joining us. We will catch you next Saturday on Make It Last where we help you keep your legal ducks in a row and your financial nest eggs secure. Bye‑bye.
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