Estate Planning for Digital Assets

By Kimberly Jones

Intern, Press, Potter, Dozier, LLC

JD Candidate May 2013

Catholic University of America, Columbus School of Law 

Did you know that there are roughly 7 billion people in the world, over 2.4 billion of whom use the internet? Of those 2.4 billion internet users, 1.06 billion use Facebook (44%), 1 billion use YouTube (42%), 500 million use Twitter (21%), and 425 million use Gmail (18%). The common thread among these websites, and many more like them, is that users set up digital identities through them and then proceed to store and share personal property (e.g., photos, videos, messages, documents, etc.) within them. This personal property is often referred to as a “digital asset.” It is reasonable to assume that of the billions of internet users, a significant number have digital assets.

Presumably, when you hear “asset,” you immediately think about your estate and, subsequently, your plan for managing your assets upon your death. If that is not your first thought, not to worry, that is what your estate planning attorney is for.  Unfortunately, unlike the traditional “asset” transferred upon death, digital assets present new barriers and uncertainty to the succession of property.

Barrier #1: Identification of the Digital Asset 
Often neither your Personal Representative nor your family members are aware of all of your online accounts. How can your digital accounts and assets within these accounts be handled appropriately if no one knows they exist? Consider creating a Virtual Asset Instruction Letter (VAIL), storing it in a safe place (e.g., a safe deposit box or online storage, such as Secure Safe or Legacy Locker), notifying a trustworthy person of the document’s existence and location, and notifying the people you leave behind information regarding accounts and assets they may otherwise miss.

Barrier #2: Ownership of the Digital Asset

You may only bequeath property that you own upon your death. For example, do you “own” the media you have purchased through iTunes? As explained by CNET, when you purchase music on iTunes, you are actually purchasing the right to listen to the music, nothing more. Therefore, the media you purchase on iTunes are not digital assets that can be transferred upon death.

           

Barrier #3: Access to the Digital Asset

Many digital account providers require users to agree to their terms and conditions prior to use. Generally, the terms and conditions include reference to unauthorized use and privacy. As a result, providers such as Google are often reluctant to grant executors or beneficiaries access to the decedent’s digital account even with proof of death and authority. However, as recently as April 2013, Google created an Inactive Account Manager feature that addresses their strict access policy by allowing account holders to establish a plan for their digital assets in their Google account.

If you are concerned about the treatment of your digital assets at the time of your death, raise the issue with your attorney when planning your estate.

In Real Estate, Who Represents Whom? – Settlement Attorneys

By Nana Nyarko

Intern, Press, Potter, Dozier, LLC

Intern, Counselor’s Title, LLC

JD Candidate May 2013

Catholic University of America, Columbus School of Law

Last week, we introduced the difference between a listing agent (also known as the seller’s agent) and a buyer’s agent in a real estate transaction.  This week, we review the role of the settlement attorney and the overall settlement process in the purchase and sale of real estate.

The Settlement Process

The settlement (also called a closing) is the conclusion of the real estate transaction.  This is the point when the buyer’s and lender’s funds are put in an escrow account and the lender’s documents are signed by the buyer and seller.  At settlement, the parties sign a HUD-1, which is the settlement document used nationwide to disclose, in line-item detail, all financial adjustments, amounts due and disbursements pertaining to the transaction. Assuming final numbers are available, the parties receive a copy of the HUD-1 for review on the day before settlement.

The Settlement Attorney’s Role

Settlement attorneys oversee all closing services needed to complete a real estate sale or purchase. They are responsible for closing the transaction in accordance with the contract of sale, the lender’s loan closing instructions and state and federal laws.  In many jurisdictions, buyers have the right, by law or custom, to choose their settlement attorney.  However, in some instances, such as the purchase of a newly constructed home being purchased from the builder, the buyer receives a discount on closing costs if the seller’s settlement attorney is selected to conduct settlement.  For the seller, the settlement attorney accurately pays off the seller’s existing mortgages, prepares and records the deed and disburses funds.  

The settlement attorney is a fiduciary who is a neutral third party; despite buyers’ and sellers’ impressions, the settlement attorney does not represent either of the parties to the transaction.  The settlement attorney represents the total transaction itself to guarantee a successful closing.

On behalf of the buyer, the settlement attorney ensures that the title to the property is clear before closing by conducting a title search, reviewing the title report and clearing any clouds (issues relating to clear title) on title before closing. The settlement attorney also provides the buyer with owner’s title insurance (which is optional) and lender’s title insurance, the latter of which is required by the lender.

Representing the lender’s interests, the settlement attorney makes certain that, before disbursement of the lender’s funds occurs and the deed is recorded; all of the lender’s documents and the deed are complete, signed and notarized by the appropriate parties.  The settlement attorney is also responsible for making sure the deed and mortgage (or deed of trust depending on the jurisdiction), are recorded in the land records.

The settlement attorney is the final stop in completing your real estate transaction successfully, so be sure to chose an experienced one with a committed team.

For help with all your settlement needs contact Counselors Title, LLC at bethesda@ctitle.com.

For help with other residential and commercial real estate and business needs contact the attorneys at Press, Potter & Dozier, LLC at http://www.presspotterlaw.com/

In Real Estate, Who Represents Whom? – Buyer’s Agents and Listing Agents

By Nana Nyarko

Intern, Press, Potter & Dozier, LLC
Intern, Counselors Title, LLC

JD Candidate May 2013

Catholic University of America, Columbus School of Law

In real estate transactions today it can be difficult to figure out who is really representing your interests and who is representing the other side.

Closings for the sale of real property often include buyer’s agents, listing agents, closing agents and settlement attorneys. In these transactions, there are differences among all of these people and whom they actually represent during the real estate process and at closing. These differences matter.

Buyers and sellers often are unaware of the difference between a buyer’s agent and a listing agent and whom they represent in a transaction. Buyers should be aware that when they call on a listing they see online or in the newspaper to get more information,  the agent represents the seller and has loyalty to that seller when negotiating a sales price.  This agent is known as the “listing agent.”

Because a listing agent is working on the seller’s behalf, his or her job is to get an offer at the highest price for the seller’s benefit.  This creates a natural conflict of interest with a buyer’s goal of purchasing the house at the lowest and best price they can. 

For example, a colleague and his wife, while purchasing their first house, were discussing the price they were willing to pay with the listing agent. His wife told the agent that their offer was not the most they would pay; that if the seller did not accept the initial price, they were prepared to increase their offer and by how much. 

Surprise!

The seller rejected the initial offer and countered, offering to sell for the exact amount they had told the agent.  The listing agent did the correct thing by sharing this information with the seller since his or her duty of loyalty lies with the seller. The agent had no duty to keep the price discussion confidential and used that information to enable the seller to obtain a higher price.

When preparing to purchase a home, it is in the best interest of the buyer to find and work with an experienced buyer’s agent who will not only have the buyer’s best interests in mind, but who also has a duty to be loyal to the buyer when negotiating the purchase price.

It is best to make sure you are working with a dedicated buyer’s agent by signing an Exclusive Buyer Agency Agreement that binds your agent to work on your behalf and not the sellers.  This is a huge benefit to the buyer because it helps to avoid paying more than necessary to purchase the perfect home.

The real estate agents are there to assist you.  An agent who is representing your interests is your closest ally in the transaction.

For more information on who really represents whom, you can read this article written by John Adams for Realtor.com

http://www.realtor.com/home-finance/mortgages/who-represents-you.aspx?source=web

For help with all your settlement needs contact Counselors Title, LLC at bethesda@ctitle.com.

For help with other residential and commercial real estate and business needs contact the attorneys at Press, Potter & Dozier, LLC at http://www.presspotterlaw.com/

 Next week’s blog will discuss the role of the settlement attorney in real estate transactions.