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Probate and Trust Law Section Newsletter Published by the Section on Probate and Trust Law of the Philadelphia Bar Association SEPTEMBER 2014 | NO. 137 IN THIS ISSUE 03 The Uniform Fiduciary REPORT OF THE CHAIR Access to Digital Assets Act: The Information BY KAREN M. STOCKMAL, ESQUIRE | KMS LAW Superhighway Now Has I remember the advice I was a chance to meet new people, HOV Lanes for Fiduciaries given as a second year associate many of whom have become as I attended my first Education mentors, referral sources, colleagues 12 Tax Update Committee meeting. “Just keep and friends. The annual meeting 16 Recent U.S. Supreme showing up and pretty soon you’ll has become a sort of family reunion Court Decision on be running things,” someone told for me, with an opportunity to see Inherited IRAs in me. Funny, I thought, but not likely. friends that I would not otherwise Bankruptcy Fourteen years later, I am finishing see, but with whom I remain close my final year as an officer and while and a phone call away, if needed. 19 The Frank Aragona I have never felt like I was “running These people are a part of my life, Trust Case: Material things” due to the incredible team- not just my work. Participation by Estates work we employ, I’ve given others and Trusts the same advice that I received Many attorneys have told me that 21 Practice Points many times. Stick around, it’s an they don’t have time to spend amazing place to be. 22 Ethics Column working in the Section, because they have to spend their nonbillable 23 Case Summary from the As I wind down the four year officer work time on marketing. I can only Orphans’ Court Litigation rotation, it occurs to me what a comment on my own experience, Committee tremendous privilege it is to be but my practice would not exist a part of this Section. Several without the support and referrals NEWSLETTER years after joining the Education from those I met in the Section. ARTICLES Committee I became a committee Indeed, for every three referrals co-Chair, then the committee Chair, that brought me new clients in Would you like to see something then a member of the Executive 2014, two came from Section in future issues of the Probate Committee and then an officer. members. So, I’m letting you in on and Trust Law Section In that time I had my children, a secret. Time spent working in the Newsletter? Then, why don’t you left a large firm and started my Section provides the best return on write it? If you are interested, own. Each new opportunity in the investment (ROI for you marketing please contact the Editor: Section afforded a deeper level types) I could possibly hope for. Heike K. Sullivan of understanding about how this email: sullivanh@ballardspahr. amazing organization functions and continued on page 3 com 1 Probate and Trust Law Section Newsletter | NO. 137 Probate and Trust Law Section Newsletter | NO. 137 2 THE UNIFORM FIDUCIARY ACCESS TO DIGITAL ASSETS ACT: THE INFORMATION SUPERHIGHWAY NOW HAS HOV LANES FOR FIDUCIARIES BY SCOTT S. SMALL, SENIOR VICE PRESIDENT AND SENIOR REGIONAL FIDUCIARY MANAGER | WELLS FARGO PRIVATE BANK1 INTRODUCTION shared on SnapChat, 278,000 tweets value must be included in state are sent on Twitter, 2 million searches and federal inheritance and estate Did you hear the one about the occur on Google, 20 million photos tax returns, and in the inventory person who sold virtual real estate are viewed on Flickr, and 204 and accountings of guardianships, in a multiplayer universe online million e-mails are sent.4 Every sixty conservatorships, decedents’ estates game for over $600,000 of very real seconds! or trust administration. Separate 2 dollars? Or the one about the and apart from intellectual property decedent who owned a domain Overlooking a client’s digital rights such as trademark and name that was sold for over assets can lead to financial loss copyrights, forms of digital property 3 $13 million dollars? A steadily for beneficiaries and fiduciary risk such as domain names, advertising increasing number of clients for executors and trustees, but revenue from Web pages or blogs or are involved in online banking, gaining information and access social media have financial value. investing, bill paying and tax filing, to those assets is a challenge. This as well as engaging in gaming and presentation is intended to discuss business social networking sites. current legislation attempting to 1 The opinions and views expressed in this At the end of July, 2013, an online deal with digital assets and provide material are those of Mr. Small and do service known as Qmee reported helpful hints on how to incorporate not constitute any representation of the that the following transactions the access rights and distribution of opinions or views of his employer, Wells Fargo Bank, N.A.. occur on the Internet every 60 digital assets into estate planning. 2 Planet Calypso Player Sells Virtual Resort for seconds: 70 new domain names $635,000 USD, PR NEWSWIRE (Nov. 12, 2010) are registered, 17,000 transactions BACKGROUND (Entropia Universe was the game). occur on Walmart.com, $83,000 Most digital property has little or no of sales transpire on Amazon.com, 3. Sex.com was sold in 2010 by Escom LLC financial value,5 but those items (then in bankruptcy) to Clover Holdings 20,000 photographs are uploaded of digital property with financial LLC. Escom LLC was the alter ego of Gary to Tumblr, 104,000 photos are Kremen, who died in 2006. 4. Online in 60 Seconds, Blog.qmee.com/ REPORT OF THE CHAIR, CONTINUED qmee-online-in-60-seconds/ (July 24, 2013). 5. But see Greene, Passing Down Digital I encourage all of you who are not Although it is only fall, the year feels Assets, WALL STREET JOURNAL (Aug. 31, yet engaged in committee work to like time is speeding up, pushing us 2012)(according to 2011 survey from McAfee, American consumers value join us. Get involved, come to our towards the winter holidays. In fact, their digital assets on average at nearly Quarterly meetings, join our initiatives the planning for this year’s events is $55,000). Determining the value of digital and meet our members. If you want largely done and the remaining 2014 property may be difficult. Comparables may be hard to find. Market conditions to learn more before you leap, call events are approaching quickly. can change quickly as technology evolves or email an officer or committee The last few months of the year are and is replaced, as fads come and go, and as lifestyles change. For a person’s member to get advice on how to taking shape nicely. Most notably Web pages and blogs that receive become active. We are a close but the annual meeting will be on advertising revenues, those cash flows can very open group we have plenty of December 4 at the Ritz Carlton and be used to establish value. However, those cash flows may fluctuate significantly from room for those with new ideas and it is free for Section members. I look one year to the next and may be worth willing hands to help. forward to seeing you all there, this little to no money if the person dies. year and for many years to come! continued on page 4 Probate and Trust Law Section Newsletter | NO. 137 3 UFADA, CONTINUED period of incapacity or transfer the person. Fiduciaries often need to person’s property to the person’s act quickly to meet federal and Even video game characters and beneficiaries after death. A person’s state tax filing requirements and the virtual weapons and currency duly-appointed fiduciary has the requirements of state courts used in multiplayer universe games powers, duties, and authority to and state fiduciary laws to promptly have value. act on the person’s behalf granted inventory and protect the person’s under a governing instrument (e.g., property. Acting quickly is especially The unique sentimental value of a last will and testament, a trust, or a important for online accounts digital assets may be very important power of attorney) and under state because some service providers to the family and friends of an law. In each case, the fiduciary will close the person’s account incapacitated or deceased person. becomes the person’s alter ego, and delete the person’s data if the Many people now store their standing in the shoes of the ward, account has not been accessed photographs, diaries and letters in decedent, settlor, beneficiary, etc. for several months. In addition, a computer instead of a shoebox federal or state criminal laws on or albums stored on a bookshelf. Traditionally, after a person became unauthorized access to computers Family trees are created and stored incapacitated or died, the duly- have a significant chilling effect on in online genealogical accounts appointed fiduciaries would go to fiduciaries who may want to use the such as Ancestry.com. Blogs have the person’s home; look through person’s username and password to replaced diaries. A decedent’s the person’s paper records; and directly access the person’s online life story could be lost if fiduciaries watch the person’s U.S. mail for accounts and retrieve the account cannot access these digital assets.6 bills, account statements, and other contents. Clear authority for On the flip side, access to digital important information needed for fiduciary access to online accounts assets may prevent the disclosure the administration process.

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