The Virtual Vault

What to do with your filed tax returns

The IRS recommends that you keep copies of filed tax returns and related documents for seven years. The IRS could review your filed returns at any time during this period. Most tax software keeps your returns in electronic format so these will be easy to backup. Supporting paper records should also be scanned and stored electronically. A virtual safe deposit box (VSDB) is the perfect place to store your tax returns and supporting records. Ideally your VSDB software should allow tax professional to store your returns directly into your VSDB.

James Bell

Arranging Your Final Affairs

Without proper preparation the courts will make decisions about your life and estate based on local and federal laws. You and your family are not directly involved in the decision making process. Your children could become wards of the state. Your family could be permanently divided without direction about the decision making process. Your final wishes may not be carried out.

Making Your Arrangements

Prepare your estate documents. Seek out a professional advisor who specializes in estate planning. Your advisor should be certified by an accredited organization. At minimum you will need a will. It is also advisable to have a financial and health care power of attorney in case you are incapacitated. Your estate planner will be able to determine the appropriate set of documents for your estate.

Make advanced arrangements for your death or incapacity. There are many advantages to arranging your funeral, cremation or cemetery services in advance. Not only do you make your wishes known but you also protect your family from having to make such decisions at a difficult time. Making your own decisions about the type of service, merchandise and price prevents emotional overspending by family members who can only guess what you might have wanted. Many individuals also choose to purchase homes in retirement communities that have direct access to assisted living and nursing homes.

Select a set of trustworthy individuals to carry out your last affairs. They should have frequent enough contact with you so that your absence would be noticed in a relatively short period of time. Candidates might include family members, friends, or co-workers.  After confirming that these persons are willing to carry out your final wishes you need to leave them with a written set of instructions designating what duties need to be fulfilled.

Create a list of persons whom you want notified in case of death or incapacity, along with their contact information. The list of can include family members, friends, attorneys, financial advisors, tax advisors, executors, guardians, health care agents, attorneys-in-fact, trustees, and representative payees.

Document what needs to be done to take care of your affairs. These affairs might include taking care of your pets and plants, picking up your mail and newspapers, and paying your bills as they come due. You should also write out a short description of what tasks you assigned and who you assigned them to. You should record details about credit cards, loans, subscriptions, At Home Care by health care professionals, lawn care, maid services, pet care, home security, pest control, private schools, home owner associations, places of worship, bequests, and final wishes.

Document your legacy. You may want to keep a record of your personal notes as an everlasting gift to future generations, including diaries, memoirs, goals, accomplishments, achievements, values, childhood memories, family history, genealogy and ancestry information, recipes, memorable letters, and Child growth charts.

Inventory your belongings. List your assets (personal, business, and investment), liabilities, and insurance coverage. Include model and serial numbers. You should record details about real estate, personal property, vehicles, insurance policies, bank accounts, financial assets, award programs, benefits, and pensions. This inventory should also include:

• The location of original financial and family documents including birth certifications, marriage licenses, wills, trusts, deeds, powers of attorney, tax returns, insurance policies, stock and bond certificates, and personal notes.
• Photographs of your home that include any landscaping and improvements.
• Photographs of cars, boats, and recreational vehicles.
• Appraisals of jewelry, artwork, collectibles, and other property that is difficult to value.
• Copies of receipts and cancelled checks for more valuable items.
• Copies of contracts with assisted living centers, nursing homes, funeral homes, and cemeteries.

Make your estate documents available to the appropriate persons or institutions. If your estate documents can not be found when needed then it is as if these documents never existed. Overlooking this most important task can cause your estate plan to fail. Your final wishes may not be carried out as planned.

Summarize your arrangements into a single document. Once you have completed these steps you should write out a short description of what tasks you assigned and who you assigned them to. This document will help you recall what needs to be done and who will do it.

Periodically review and revise your plans. In the event that one of the persons whom you delegated a task to is no longer able to, or you no longer want them to, carry out their task then you will need to revise your plans. Reminding persons who you assigned tasks to periodically would probably also be advisable.

Consider using technology to organize your final affairs. A virtual safe deposit box is an Internet based service that stores your information in a secure, remote location. Your information is always available, through natural disaster, theft, even death and incapacity. Your information can also be shared with trusted parties such as family members, advisors, and medical professionals so that it's available when it’s needed most.

James Bell

Reduce the Risk of Unauthorized Computer Access

Authentication is the act of confirming the identity of a person. On most computers, this involves logging in with a userid and a password. The weakness in this system is that passwords can often be stolen, accidentally revealed, or forgotten. For this reason, Internet based transactions require a stricter authentication process.

Two factor authentication is an authentication mechanism which requires more than one thing to authenticate a user. Typically, the two components of two factor authentication are "something you know" and "something you have".

A password or personal question provides the "something you know" component. The "something you have" component can be provided by a small token card or your cell phone. In order to complete the authentication process you must enter information sent to the token. The information displayed changes frequently and expires within a short period of time (usually every 60 to 90 seconds).

Two factor authentication could drastically reduce the incidence of online fraud, because the victim's password would no longer be enough to give a thief access to their information. However, it is not fool proof. While it increases the amount of work that an attacker has to do, hopefully until there is no longer an economic incentive to continue, computer users still need to:

• Be aware of phishing attacks and how to avoid them
• Install and use anti-virus and anti-spyware software
• Only install software obtained from trusted sources

James Bell

Your Passport to Safety

In 2004, Congress decided to change procedures in border security that had allowed Americans to present various types of identification, such as driver's licenses, birth certificates or sometimes nothing, when re-entering the U.S. from certain neighbor countries. The Western Hemisphere Travel Initiative requires all travelers to present a passport or other document that denotes identity and citizenship when entering the U.S.

On June 1, 2009, the U.S. government will implement the full requirements of the land and sea phase of this initiative. All U.S. residents will need passports for land and sea travel between the U.S. and Canada, Mexico, the Caribbean region, and Bermuda. 

A new wallet-size passport card is now available. Approximately the size of a credit card, the passport card is a convenient and less expensive than the passport book. However, the U.S. Passport Card cannot be used for international air travel. This new travel document can be used to enter the United States from Canada, Mexico, the Caribbean, and Bermuda at land border crossings or sea ports-of-entry. A passport book is required for all air travel. See http://travel.state.gov/passport for details.

If you're traveling outside the U.S. this year, here is a bit of advice:

• Renew your passport now...These new policy changes will increase passport demand and wait times.
• Think twice before planning a car trip to Mexico or Canada...A passport is will be required on June 1, 2009. It could be a long and painful process to be turned away at the border.
• Protect yourself from identity theft...it is important to report a lost passport immediately, especially when traveling internationally! If your passport is lost or stolen in a foreign country, contact the nearest U.S. Embassy or Consulate. If you have access to an Internet connected computer please visit the U.S. Department of State website for details. By keeping a copy of your passport in a virtual vault, you can download or print a copy of your passport enabling you to quickly get a replacement. See http://travel.state.gov/passport/lost.html for details.

James Bell

Is your information in harm's way?

In October 2007 wildfires consumed the Southern California town of Ramona, a suburb of San Diego. Residents quickly fled as flames engulfed their homes leaving only time to grab some clothes, photos, and pets. For many, even those who stored valuable documents on a computer, it was a total loss. Rebuilding their lives seemed like an almost impossible task.

Even now there seems like no end to it. Last year there were over 2,000 wildfires. Starting in 2008, the active California wildfire season has increased by more than 60 days. Individual fires are burning, on average, more than five weeks. California is hotter and drier than ever with Los Angeles now 5°F warmer than in 1920.

Having an emergency kit containing important family documents and emergency contact information is advisable in case you have to evacuate quickly. Some people have even started keeping this kit in the trunk of their cars at all times. Even if this kit is destroyed most important family documents can be replaced. The US Federal Government web site has a page dedicated to replacing your vital documents. However, replacing many legal documents such as your will and revocable living trust may not be so easy. You may have to have them recreated by an attorney, which can be costly and time consuming.

To help prevent the loss of valuable documents use a virtual safe deposit box (VSDB) to store them in a secure, remote location.

James Bell

Sources:
California Department of Forestry and Fire Protection
http://www.fire.ca.gov/index_incidents.php
California Wildfires and Global Warming by Dan Shapley
http://www.thedailygreen.com/environmental-news/latest/Global-Warming-California-Wildfire-47102305
Cool surfaces and shade trees to reduce energy use and improve air quality in urban areas by H. Akbari, M. Pomerantz and H. Taha
http://dx.doi.org/10.1016/S0038-092X(00)00089-X
Wild Fire Disaster Preparation by Fire Finance
http://firefinance.blogspot.com/2007/10/wildfire-disaster-preparation-part-1.html

The Truth about Unlimited Storage

Many service providers today offer unlimited online storage. Some are free. Some are cheap. Few mention any details about security, data integrity, or privacy outside of the fine print buried deep within the Terms of Service.

Are you getting your money’s worth? When a service provider charges a fixed yearly or monthly amount for unlimited online storage, it’s quite likely that most people are over paying for the service. It’s like cell phone minutes; you often pay for minutes that you never use. With a “pay as you go” billing model, you only pay for services that actually use.

Servers, disk drives, and bandwidth all cost money. Service providers that offer “free” storage are engaged in an unsustainable business model. Once all venture capital is exhausted, your “free” storage will start costing you money and you will have no control over the price. Of course, this assumes that your service provider is still in business once the money runs out.

What happens to your files once they are placed on your service provider’s server? Your files should be encrypted while in transit to the server (https) and encrypted a second time before they are stored on the server. To prevent tampering a digital signature should be taken when a file is uploaded. A second digital signature should be taken when a file download is requested. If the digital signatures don’t match the file should not be downloaded.

Your service provider should protect your files from loss by either backing them up on a regular basis or by storing multiple copies of your files on physically separate servers. If this is not done, your files may be lost forever.

And most important of all, only you should have access to the information stored in your files. Your service provider’s customer service representatives should not be able to view, move, upload, download, add, update, or delete any of your information. Your service provider can see the contents of your files if they can provide copies of your files on CD or if they can release your files to third parties.

In many cases, you may be surprised how little is done by your service provider to protect you or your files. Your service provider should also publish a Security Policy that outlines how your files are secured.

James Bell

Virtual Vaulting for Estate Planners

Lawyers and law firms are not immune to the current downturn. Law firm layoffs, de-equitization of partners, depressed revenues and profits, law firms closing, increased competition, and commoditization of legal services are all putting increased demands on firms and hitting the profession like never before.

Besides cutting costs, the only thing that will help is to be able to continue to get and keep profitable clients.

What Can Your Firm Do?

Market On The Internet Marketing your law practice on the Internet allows you to connect with people who are actively looking for your services. You might be surprised to learn just how many people that is.

CONSIDER THE FOLLOWING MARKETPLACE FACTS:

• Over 100,000 searches a month are made for estate planning, probate and & elder law-related terms on the Yahoo! network alone. When factoring searches on the other major search engines, it's estimated that people make over 300,000 searches a month for estate planning & related searches.
• Online search has surpassed the Yellow Pages as the primary method used by Americans for researching and finding goods and services.
• 90% of Americans online are researching products & services.
• 81% of those say that they made a choice based on the information they obtained from websites.

           * Data compiled from Yahoo! Search Marketing services

Attorneys learn the basics of marketing strategy and rely on guidance from marketing experts in order to structure effective programs to educate the public on will drafting services. By integrating both law and business, estate planning lawyers can better serve current and future clients. Marketing can be fun, profitable, educational, ethical and effective --in short-- a win-win for lawyer and client.

You can cut costs, shed unprofitable practice areas, or take other measures to compensate for the slowdown. However, in many ways the current climate represents a huge opportunity for you. Research proves that firms that held the line or even increased their marketing and client retention activities during recessions achieved significant gains in revenue and market share.

A recent Hildebrandt Client Advisory summed it up accurately when they said: "The competition to win and keep clients is intensifying notwithstanding the downturn". And the only way to win and keep clients is to consistently anticipate and exceed their expectations.

Studies confirm that service satisfaction is the key factor that influences whether clients stay loyal to a particular firm or attorney. Yet, according to the December 2008 issue of The American Lawyer magazine, only 2% of the responding firms made the effort in 2008 to meet with their top 20 clients to discuss their firms' performance and the client's needs.

Whether it's due to billable hour demands, lack of training, or outdated organizational structures at many law firms, the fact is that while many lawyers may be good legal technicians, many fail at delivering exceptional client service.

Did you know that up to 93% of dissatisfied clients will not return to you and won't tell you why! Studies also show that 80% of your business will come from existing clients and that having one person accountable for client satisfaction can increase your profits over 40%!

Get More Business in a Down Market

If you want to distinguish yourself from the competition for a sustainable advantage, you need a plan to increase client acquisition, retention and profitability.

Technology can help...Virtual vaulting is the latest in technology for estate planning professionals.  With virtual vaulting, important client information is stored in an online safe deposit. Information is preserved in a secure, remote location, so that it can be retrieved when needed. Client data is organized for easy access. Advanced security techniques make this the safest solution for storing personal data.

Virtual vaulting can also be used as a comprehensive, cost-effective marketing and client retention tool. By helping your clients take a proactive approach to their future, you help them to avoid the unnecessary pain and anguish that comes from not being prepared.

A virtual vaulting service can be offered, at a mark-up, to your client’s heirs, beneficiaries, family members, and friends. The referral aspect of this service is priceless because it encompasses the entire family circle. This personal touch conveys a powerful message, effectively saying "We care about your future".

Several companies currently provide this type of service. Wells Fargo offers online banking customers fee-based subscriptions to its vSafe product. Vaulting Systems International sells subscriptions to its Estate++ product, which is available to corporate partners, as well as, individual subscribers. Similar products are also offered by The E-Safe, Keep You Safe.com, and Box.net.

Trudy Reilly

Estate Planning for First Responders

A police officer, on routine patrol, pulls over a suspicious vehicle. One of the passengers jumps out and starts shooting resulting in the police officer being seriously injured. Later at the hospital his wife wants to make sure that her husband is receiving the proper medical attention. The attending physician refuses to give her any medical information. Even though she is the wife of a police officer wounded in the line of duty, HIPAA regulations will prevent her from receiving any medical information without specific written authorization!

The men and women in blue who patrol our streets to keep us safe always run the risk of paying the ultimate price. So it is imperative that they have proper legal documents in case of the unthinkable. If you are a law enforcement officer, you should strongly consider having these legal documents drawn up as soon as possible:

Will...This is a legal declaration of how you wish to have your assets distributed after death. This document also names guardians for your children. Without it, your property will be distributed according to state law and not according to your wishes. In the meantime, your assets could be frozen and unavailable to your surviving family. Even worse, if your spouse also dies your children will become wards of the state and be placed in a foster home until a court decision is made.

Living Will...This advance medical directive spells out your end-of-life decisions concerning medical treatment in case you are incapacitated. Without it your family will have to petition the courts to become involved with your end-of-life decision making process. Different family members may have different views regarding politics, religion, and spiritual beliefs which can result in family conflicts and even litigation. Your family could be permanently divided without your direction about this decision making process.

Power of Attorney...This document legally authorizes another to act on your behalf. A Durable Power of Attorney allows another to act on your behalf with regards to your financial affairs. This authority can be general and broad based or limited based on time or specific authorities. Without it, your finances could be inaccessible to your family. A Health Care Power of Attorney allows another to make medical decisions on your behalf in case you become incapacitated. Without it, the courts will make decisions about your medical treatment and life-prolonging measures.

Legacy Statement...It's a statement of those qualities which can't be measured by money. It reflects the values by which you live. It contains the lessons you have learned during your lifetime. It can also contain genealogy and family history information. Without it, your valued experiences will be lost to future generations.

If your department offers life insurance make sure to sign up for it, especially if you have children.

Make sure to seek out an attorney who specializes in estate planning to assist you with these decisions. The Wills for Heroes program provides many of these services free of charge. Act now; it’s too easy to put this off. You owe it to your family. Once you're gone you won't get a second chance!

James Bell

How safe is your safe deposit box?

Safe deposit boxes are highly resistant to disastrous conditions such as fire, flood, earthquakes, and hurricanes. However, they are not indestructible and sometimes losses can occur.

As a precaution you might want to seal your belongings in an airtight container. You should have a written inventory of the safe deposit box’s contents. Take photos of expensive items and keep back up copies of important documents. If disaster strikes, this could ease the process of filing an insurance claim.

Even though a safe deposit box physically resides in a bank, it is not covered by FDIC insurance. Unless found negligent, a bank will probably not reimburse you for any damage or loss. Your bank may explicitly offer insurance coverage on your safe deposit box. If not, it’s in your best interest to contact your insurance agent about additional protection.

Despite sophisticated security devices and strict access procedures, thieves can still rob your safe deposit box. Yes, it happens, but fortunately not often.

If you need quick access to legal documents, a safe deposit box may not be the best place to store them. The IRS can seal your safe deposit box after death. Some states make it easy to remove a will and other legal documents from a deceased person's safe deposit box. But in other states it can take a court order. Make sure to check with your attorney to find out what is specifically required in the event of your death. Also make sure that you know your bank’s policies regarding these matters.

James Bell

Pet Estate Planning

Many people treat their pets like family so it's no surprise that many people want to provide for their pets in case of death or incapacity. Pets are traditionally viewed as personal property so the idea of including a pet in your will or establishing a pet trust may seem a bit out of the ordinary. But, in some states, laws have changed and it's becoming more popular.

According to Professor Gerry W. Beyer of the Texas Tech University School of Law, "A pet trust is a legal technique you may use to be sure your pet receives proper care after you die or in the event of your disability. You give enough money or other property to a trusted person or bank who is under a duty to make arrangements for the proper care of your pet according to your instructions. The trustee will deliver the pet to your designated caregiver and then use the property you transferred to the trust to pay for your pet's expenses."

To educate yourself on pet estate planning please visit The Estate Planning for Pets Foundation website. The purpose of this foundation is to provide an educational resource for pet owners regarding the ins and outs of planning for the care of their pets when they no longer can.

Make sure to contact an attorney who is familiar with pet estate planning for exact details on your specific situation.

James Bell

Sources:
Estate Planning for Pet Owners by Professor Gerry W. Beyer
http://www.professorbeyer.com/Articles/Animals.htm
The Estate Planning for Pets Foundation
http://www.estateplanningforpets.org/