New York Digital Assets Legislation
On September 29, 2016, New York enacted its version of the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). This is significant legislation for clients who own digital books and music (for example, i-Tunes and e-books), or have email, or social media (i.e. Facebook, Twitter, etc.) accounts.
In short, clients can now designate who can obtain post-mortem access to their digital records. Conversely, clients also have the freedom to prohibit access to their digital records after their death.
Clients may have already granted someone power over specific digital assets in a provider’s “terms of service agreement”. These agreements need to be reviewed. Under RUFADAA, direction in a Will, Trust, or Power of Attorney can override such a person’s grant.
Clients should amend their Wills, Trusts and Powers of Attorney to account for this new legislation. In addition, clients should be sure that necessary identifying information (including passwords) is available to the newly designated individuals. Otherwise, it may be impossible to access the accounts post mortem.
New Jersey Estate Tax
As part of the legislation that increases the New Jersey gas tax by 23 cents per gallon (but you still can’t pump it yourself), New Jersey repealed its estate tax. The New Jersey exclusion will increase from $675,000 to $2 million on January 1, 2017, and the tax will be eliminated for those dying on or after January 1, 2018.
New Jersey’s estate tax has been equal to the Federal credit for state death tax. Since estates valued at less than $5,450,000 pay no Federal tax, no benefit can be claimed for the New Jersey tax.
New Jersey will continue to impose its inheritance tax. Spouses, (including survivors of a civil union and domestic partners), parents, grandparents and descendants are exempt. In-laws pay at rates of 11% to 16% with a $25,000 exclusion and other beneficiaries pay 15% on the first $700,000 and 16% on the excess. (Gifts are added back to inheritance taxes)
Some non-domiciliaries of New Jersey may own real property in New Jersey. This will continue to be subject to New Jersey estate tax.
Clients in the tri-state area with several homes may wish to reconsider domicile. New Jersey may now be beneficial when compared to Connecticut (with a $2 million exclusion) and New York (with an exclusion increasing to the Federal exclusion).
Connecticut Power of Attorney
Connecticut enacted the Connecticut Uniform Power of Attorney Act (“CT UPOAA”) that became effective October 1, 2016.
The new law requires banks and other financial institutions to honor the power of attorney document and grants new authority to the Connecticut Probate Courts to compel these institutions to accept powers of attorney. Additionally, the new law creates a statutory form which includes new estate planning powers that the principal may affirmatively grant to an agent such as making gifts, changing beneficiary designations and creating and terminating trusts.
The new law applies retroactively to existing valid powers of attorney, but clients should consider updating their powers of attorney to the new statutory form to avoid delay in the acceptance of the power of attorney by banking and financial institutions.
Please call if you wish to discuss any of these items.