Tag Archives: Social Media

Facebook Beneficiary Designations

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When was your last Facebook post?  Maybe more importantly, when did you update your Facebook beneficiary designation? Facebook, the world’s most popular social network, recently changed its policy to allow users to designate a “legacy contact.” The legacy contact will be permitted to manage portions of the users’ account posthumously.

Facebook initially froze deceased users’ accounts upon receiving notice of the death.  This original, hard-line policy angered many users’ family members, heirs and other users who wanted to edit the deceased’s account or provide information to friends.  Google, traditionally at the forefront, became the first Internet company to permit users to select digital heir for its Gmail email service and other services.  Facebook has followed Google’s lead and finally welcomed legacy contacts.

The legacy contacts will be able to post to users’ pages, change the profile picture, and even respond to friend requests.  There are numerous settings and levels of permission which can be granted, including access to the decedents’ posts and photos. The legacy contact cannot edit the decedent’s posts or what his or her friends post.  The legacy contact will not have access to the decedent’s messages nor will the contact be allowed to delete the account.  Facebook users may still choose to have their entire account deleted at death.

To designate your legacy contact, go to ‘Settings’ and selected ‘Security’ and then click ‘Legacy Contact’ at the bottom of the page.  From there you can designate an existing Facebook friend and give that friend permission to download an archive of your data or choose to have your account deleted at death.  As with most initial policies, Facebook’s current offerings are not optimal.  You must name an existing Facebook user and you can only select one legacy contact.  So spouses who travel extensively together may consider naming another individual. If you do not name a legacy contact, Facebook will honor digital designations made in a traditional, legal will.  For assistance with these and any other beneficiary designations, please contact our experienced estate planning attorneys.

Billion Dollar Tax Bill for Facebook CEO Zuckerberg

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Facebook CEO Mark Zuckerberg will soon become a billionaire when the social media giant completes its initial public offering (IPO).   Despite the enormous benefit to his personal wealth, he will face some severe tax consequences from his proposed exercise of millions of stock options.

Zuckerberg currently owns almost 414 million shares of Facebook, but he also holds options to buy another 120 million shares at the bargain price of 6 cents a piece. Facebook said in its IPO paperwork that Zuckerberg plans to exercise those options and will sell some of his shares during Facebook’s initial offering to cover the tax bill.

Zuckerberg will pay ordinary income tax on the spread between the fair market value of Facebook shares when he exercise his options and the price he pays for the shares  – 6 cents.  Private analysts estimate the shares will go for $40 per share during the IPO.  At such an elevated price, Zuckerberg will owe roughly $1.5 to $2 billion in taxes.

Needless to say, Zuckerberg will pay tax at the highest marginal federal income tax rate of 35% .  In addition, as a California resident, Zuckerberg will pay state income tax at a 10.3% rate.  Why is Zuckerberg willing to shell out billions in tax?  Control.  The 27-year old CEO wants to retain as much control as possible over the continually growing Facebook empire.

Only in the twisted world of taxes could one go from paying what many believe to be the largest tax bill ever to paying no tax at all.  Zuckerberg may not pay any federal income taxes in 2013.  The Facebook Board of Directors, at Zuckerberg’s urging, has reduced his salary to $1 for 2012.