Read articles about finances, saving and community news.
Access all the commercial banking resources your business needs to succeed.
by Bob Carlson
June 01, 2020
by Bob Carlson
June 01, 2020
Most people have a broader and more robust digital life than they realize, and that digital life has to be integrated into their estate plans. If it isn’t, your heirs are likely to face a lot of inconvenience, anxiety and unnecessary costs. It’s possible part of your estate and legacy will be lost.
It took a long time, but estate planning laws have almost caught up to technology. Now, your estate plan is incomplete if it doesn’t have arrangements for your digital life, including accounts, files, transactions, and more.
Digital assets include any online account or service protected by log-in security, such as identification and passwords, such as email, social media, message board accounts, and subscriptions. Your computer, computer files, files you store on “cloud accounts” and any web domains you own are digital assets. Online financial accounts of course are digital assets. A smart phone and all the apps and other items on it are digital assets. Medical records are being digitized and accessible online, making them part of your digital estate.
First, develop an inventory of your digital assets. This includes all the items listed above and any others you can think of. You also should include what might be called digital liabilities. These are any automatic payments, whether they are automatically issued from your accounts or charged to credit or debit cards.
Hybrid assets are also important. These are a standard financial account or IRA that allows online access and management.
List the name and web address of each account or asset, and any account number. Include the full name on the account, whether it is your name, your spouse’s name, both names, or a business name.
Include all the information needed to access the account or item. Typical information includes a username or personal ID and a password. If a second authentification step sends a pass code to a cell phone or other device, include details about that. Security questions and answers set up with the account need to be included.
After completing the inventory, decide who should have access to each item and how it should be handled after you pass away. Then, have those wishes included in your will and living trust.
The succession of digital assets used to be a difficult legal issue. Many providers refused to allow access to accounts and wouldn’t give passwords or other access information to executors or family members. They often cited a federal law that makes it a crime for anyone to access an online account that isn’t theirs.
The Uniform Fiduciary Access to Digital Assets Act clears up most of those difficulties. Most states have adopted a version of it. It hasn’t been enacted but is being considered in Massachusetts, Pennsylvania, and the District of Columbia. Only California, Kentucky, Louisiana, and Oklahoma haven’t enacted and aren’t considering the law, though some of those states adopted their own laws regarding digital assets.
The law allows estate executors to manage many digital financial assets without special permission, unless the will states otherwise. The executor is authorized to manage computer files, web domains, and virtual currencies. The executor doesn’t have access to email, text messages, and social media accounts without express permission in a will, trust, power of attorney, or other legal document or order.
Be clear in your will, trust, and power of attorney who should have access to and management ability over each of the digital assets and accounts.
In a typical plan, you give the executor access to financial accounts, any other valuable digital assets and any digital account needed to settle the estate. The executor will manage them and eventually transfer them to new owners as directed under your will or trust. The executor also will ensure bills are paid while the estate is being processed and eventually turn off automatic payments and cancel subscriptions.
You might want the executor to have access to all your digital assets. Or you might want someone else to see and manage email, social media accounts, and any other personal digital assets. Many of these assets aren’t needed by the executor to process the estate and are in the nature of personal possessions. Some people limit access to their email, computer hard drives, and files stored on the cloud to their spouse, their closest child, or someone else. Yet, there might be emails, for example, that are relevant to managing and processing your estate. You could have someone review all your incoming email and forward to the executor any related to financial matters or managing the estate.
You might have incomplete creative work on the computer or in cloud storage. Some people want most of such items to be deleted or destroyed after they pass while others have someone in mind to handle the items.
When you give different people access to different assets, you might want to prepare separate inventories of digital assets and leave each person the appropriate inventory with the access information.
Keep in mind that digital asset providers often have their own policies. Google, for example, lets you designate in your account profile who can access your account after you pass. Other providers have other policies.