March 2015 • Volume 103 • Number 3 • Page 48
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Best of Discussions
Lawyers as POA Agents, Estate Planning for Digital Assets
Can you serve as the agent of your client's POA for property? And how should you deal with digital artwork in an estate plan? Members of the ISBA's Trusts and Estates Section offer answers.
The questions and answers below are from the ISBA Trusts and Estates Section discussion group, which is open to section members only. Join the section at http://www.isba.org/sections/trustsestates.
Q. Can you serve as the agent of your client's POA for property?
John Ahern, Chicago. Client has no family and few friends. Client asks her attorney to be the agent on her powers of attorney and trustee on her trust and he agrees. Attorney creates the documents and discloses that he prepared them. He is not a beneficiary. Is there any specific prohibition that anyone is aware of for the attorney?
An ISBA lawyer responds
Timothy S. Midura, Wheaton. [There's no] "prohibition." Have your "eyes wide open" for
• Any estate/beneficiary disputes that [the lawyer] might become a lightning rod for.
• Even higher (or highest) standards of fiduciary conduct/capability due to [being a member of the] legal profession.
Bottom line: Be ready and able to do a superb job.
This is somewhat of a smell test. There are so many variations and circumstances that might smell "good to go" or "maybe shouldn't."
There are attorneys out there who will argue that attorneys should never act as a fiduciary because of inherent conflicts of interest (I will not discuss the inherency or obviousness). There just cannot be enough disclosure and waiver/consent to overcome all the ethical/conflicts issues, they say.
There are others who will say, "Why not? Who is better positioned to carry out the grantor's intentions? It's also just good business to have another line of business. It's a win-win."
Do make sure there is an appropriate line of succession or appointment should the first named fiduciary choose to decline or resign. Also, any exculpatory provisions that the attorney drafts for the fiduciary (himself) will probably be void as to that attorney-fiduciary.
Personally, I do not volunteer or solicit the fiduciary work and often fully explore with the client all other options. But in (perhaps similar) circumstances might accept such an appointment.
Bottom-bottom line: There's no prohibition. But there's a huge dose of common sense to accepting such a role and inherent issues of ethical conflicts and true capabilities of meeting the responsibilities and standards of conduct.
Q. How should you deal with digital artwork/assets in an estate plan?
Zisl Taub Edelson, Chicago. I have a client who is an artist and has many digital artworks (photographs, Photoshop drawings/paintings), saved either online or in her computer. Can anyone please point me to any reading materials or provide pointers on how to deal with such assets in an estate plan? She will probably end up leaving her artworks to either a fellow artist or to a charitable organization, who may make copies and sell them or use as fundraisers. There should be no estate tax issues.
An ISBA lawyer responds
Ian Holzhauer, Naperville. As far as making sure the executor/trustee has the power to access any digital accounts (and deal with companies that might lock out the account), consider a will/trust provision like this:
The executor/trustee is hereby granted the power to access, manage, and control my digital assets and rights in which I have an interest after my death. This includes the power to access or update passwords, and modify or close digital accounts. It also includes the power to sell or distribute rights to my digital assets and other intellectual property.
As far as the actual disposition instructions, I would treat the digital assets as though they were physical assets:
I hereby give the photos in the folder titled "2008 art pictures" in the Toshiba 500GB portable hard drive stored in my safe deposit box at X bank, and all accompanying intellectual property rights, to Y Charity.
While not directly related to your client's issue, I wrote a blog article about some basic digital estate planning tips: http://www.tailoredestateplanning.com/2014/12/estate-planning-re-online-accounts.html.
[Editor's Note: Facebook has recently added a feature to name a "Legacy Contact" who can access a profile owner's page after the owner is deceased. Timothy S. Midura suggests adding the issue to your estate planning questionnaire and estate administration checklist.]