Why Digital Assets Need to be Included in Your Estate Plan
Your digital assets are just as vulnerable as any other property—maybe more so!
You wouldn’t leave your checkbook at a coffee shop for anyone to see. However, your digital assets are just as vulnerable as any other property—maybe more so!
We all have an online digital life, some of us way more than others. Almost 25% of all Americans told surveyors from the Pew Research Center that they are almost constantly online. More than 75% of Americans are online at least once a day. The internet is an integral part of our daily lives.
As more and more of our personal and financial data is stored online, Forbes’ recent article advises us: “You Should Have An Estate Plan For Your Facebook Account.”
While the internet makes our lives much easier and everything is available with a mouse click, there are also some real issues for those who need to retrieve our digital assets after we’re gone. Digital assets include things like your personal e-mail accounts, online bank and brokerage accounts, frequent flier miles and social media websites. These may not seem like they have much value, but the value is in the vital data they contain—or the sentimental value of photos that are no longer kept in hard copy.
You should make special arrangements for your digital assets in advance. This allows the executor of your will to have access to this information. Provide the passwords of your computer and back-up hard drives to your executor, if you’re storing your documents this way. If you’re storing your documents in the cloud, be sure that your executor has access to these accounts.
Even if you provide your usernames and passwords to your executor or a family member, he or she may have issues with the vendor service agreement that denies him or her the ability to access, manage, distribute, copy, delete or even close accounts.
There’s a new statute, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) that addresses whether and how a family member, executor, attorney-in-fact or trustee can access digital assets. Many states have introduced or adopted RUFADAA. This law is different from state laws governing estate administration, powers of attorney, and trusts. It doesn’t presume that family members and fiduciaries can access digital assets because of their relationship with the account owner. The statute requires express authorization, before anyone is allowed to access the content of a digital asset.
It is possible to invest in a password manager, which maintains a record of your online accounts and passwords in a digital vault. These accounts can be set up in advance to provide access to a representative at a specific event, like your death or incapacity.
Make a list of your digital assets and store it in a location where your personal representative can access it. Talk to your estate planning attorney about adding language to your will that grants your executor the authority to access your non-financial digital assets and accounts. You can also ask him or her about adding terms to your power-of-attorney documents that will grant your POA agent authority to act on your behalf with your digital accounts and assets. If you have assets in a trust, consider amending the trust agreement with language that will let the trustee access digital assets and accounts.
Make it easier for your heirs. Review the procedures for each of your accounts to find out what their policies are for owners, who become disabled or die. Have your estate planning attorney include all the necessary information in your documents and be sure that it matches the requested info from the account platforms, whether they are simple social media platforms or bank-security level financial portals.
Reference: Forbes (June 3, 2018) “You Should Have An Estate Plan For Your Facebook Account”
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