Planning for Privacy in a Public World: The Ethics and Mechanics of Protecting Your Client's Privacy and Personal Security By JEFFREY D. CHADWICK Winstead PC 24 Waterway Avenue Suite 500 The Woodlands, TX 77380 600 Travis Street Suite 5200 Houston, TX 77380 281.681.5960 [email protected] Houston Business and Estate Planning Council Houston, Texas April 19, 2018 © 2017 University of Miami School of Law. This outline was originally prepared for the 51st Annual Heckerling Institute on Estate Planning sponsored by the University of Miami School of Law, and published by LexisNexis Mathew Bender. It is reprinted with the permission of the Heckerling Institute and the University of Miami. TABLE OF CONTENTS I. Introduction ..................................................................................................................................................... 1 A. In General ............................................................................................................................................ 1 B. Overview of Materials ......................................................................................................................... 1 C. Common Issues ................................................................................................................................... 2 D. Disclaimer ........................................................................................................................................... 5 II. Utilizing Revocable Trusts .............................................................................................................................. 5 A. In General ............................................................................................................................................ 5 B. Keep Estate Plan from Becoming a Public Record ............................................................................. 5 C. Prevent Public Disclosure of Assets upon Death ................................................................................ 7 D. Management Tool for Lifetime Incapacity .......................................................................................... 8 E. Facilitate Anonymous Ownership of Assets ........................................................................................ 9 III. Limiting the Disclosure of Information to Trust and Estate Beneficiaries ...................................................... 9 A. In General ............................................................................................................................................ 9 B. Silent Trusts ......................................................................................................................................... 9 C. Private Decanting .............................................................................................................................. 17 D. Basis Consistency Rules .................................................................................................................... 18 IV. Titling Real Estate, Firearms, and Other Assets ............................................................................................ 22 A. Real Estate ......................................................................................................................................... 22 B. Firearms ............................................................................................................................................. 27 C. Automobiles, Watercrafts, and Aircraft............................................................................................. 30 D. Other Assets ...................................................................................................................................... 30 V. Charitable Planning ....................................................................................................................................... 31 A. Motivations for Anonymous Giving .................................................................................................. 31 B. Methods of Anonymous Giving ........................................................................................................ 32 VI. Political Contributions ................................................................................................................................... 36 A. 501(c)(4) Organizations in General ................................................................................................... 37 B. Public Disclosure Requirements ........................................................................................................ 37 C. Tax Consequences ............................................................................................................................. 38 VII. Financial Privacy Planning ............................................................................................................................ 38 A. Financial Privacy in General ............................................................................................................. 38 B. Financial Reporting for Public Companies and Insiders ................................................................... 39 C. Privacy Planning for Lottery Winners ............................................................................................... 40 D. Privacy Planning for Investors .......................................................................................................... 41 E. Banking Disclosures and Client Due Diligence ................................................................................ 42 VIII. Medical Privacy Planning ............................................................................................................................. 46 A. HIPAA ............................................................................................................................................... 47 B. Insurance Applications ...................................................................................................................... 47 C. Ethical Duties .................................................................................................................................... 47 IX. Securing Third Party Confidentiality Through Non-Disclosure Agreements and Litigation Alternatives ................................................................................................................................................... 48 A. Non-Disclosure Agreements ............................................................................................................. 48 B. Litigation Alternatives ....................................................................................................................... 55 X. Dealing with Public Courts ........................................................................................................................... 58 A. Private Trials ..................................................................................................................................... 59 B. Sealing Civil Court Records .............................................................................................................. 59 C. Document Filing Strategies ............................................................................................................... 60 D. Making Criminal Records Confidential ............................................................................................ 61 XI. Securing a Client's Privacy at Death ............................................................................................................. 63 Chadwick-i A. The Public Nature of Death ............................................................................................................... 63 B. Funeral Arrangements and Disposition of Remains .......................................................................... 64 C. Obituaries .......................................................................................................................................... 65 D. Last Medical Records ........................................................................................................................ 66 E. Autopsy Reports, Visual Evidence, and Vital Records ..................................................................... 67 F. Family Statements and Spokespersons .............................................................................................. 68 G. Fiduciary Access to Digital Information ........................................................................................... 68 XII. Cybersecurity ................................................................................................................................................ 70 A. Cyber-Attacks on the Rise ................................................................................................................. 70 B. Cyber-Criminals and the Dark Web .................................................................................................. 71 C. Password Protection .......................................................................................................................... 73 D. Email Security ................................................................................................................................... 73 E. Social Media .....................................................................................................................................