Planning for Your Digital Assets

Planning for Your Digital Assets

As more and more of our assets have started to shift to the online world, the need to plan for those digital assets has become a priority for pretty much every individual that owns a smartphone or laptop. The purpose of this post is to provide you insight into what digital assets are and how to manage them, so your loved ones aren’t hectically phishing (see the pun?) for your digital assets.

What are digital assets?

Any online account that you own or any file that you store on your computer or that you store in the cloud. In short, assets that exist online.

Examples:

• Social media accounts
• Personal photos stored online
• Online banking or investment account
• Credit card rewards
• Documents stored in the cloud
• Email accounts
• Digital copyrights or trademarks
• Online subscriptions
• Websites, blogs, and domain names
• Crypto/virtual currency

While not all these assets have monetary value, they may hold sentimental value for family members.

Why do you need to account for digital assets with estate planning?

• Eliminates the need to search for passwords
• Gives beneficiaries legal standing to access these assets
• Protects any income stream your digital assets may generate, including royalty rights or revenue from an online business
• Prevents identify theft of the deceased individual- yes, a deceased person’s identity can be stolen
• Makes it easier for the executor of the estate
• Prevents losses to the estate: electronic bills for loans and insurance need to be discovered quickly and paid to prevent cancellations.
• Helps avoid the loss of the deceased’s story (i.e., photos stored online)

Why create a written plan for managing digital assets?

State and federal laws make accessing computer systems or private data without permission a crime, so creating a written plan for managing digital assets provides legal protection for your loved ones.

What current law is in place?

In 2015, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) was created- this is a revised version of UFADAA. This law provided better coordination with federal privacy laws, better definition of rights and duties, and legal effect to account holder/user’s instructions.

The REFUDAA outlines the definition of a fiduciary in Section 2 of the Act, “An original, additional, or successor personal representative, conservator, agent, or trustee.

i) Agent: appointed by power of attorney

ii) Conservator: a guardian appointed by a court to manage the estate of an individual

iii) Personal Representative: administrators and executors

iv) Trustee: personal with legal title to property under a trust instrument

In Section 2, the Act goes on to discuss the definition of a Custodian, "A person or entity that engages in the transmission of, maintains, processes, receives, or stores a digital asset or electronic communication of another person.”

- Think Facebook, Google, LinkedIn. The companies that actually store your digital assets.

That brings us to the main question:

If you need access to a person’s digital asset, what do you need to do?

Step #1: Search for an Online Tool

Section 4 of the Act allows the user to employ an online tool and describes this tool as, “An electronic service provided by a custodian that allows the user, in an agreement distinct from the terms and services agreement between the custodian and user, to provide directions for disclosure or nondisclosure of digital assets to a third person.”

This tool directs the custodian to either disclose or not to disclose to a specified recipient some or all the digital assets belonging to that user. This tool overrides contrary direction in a will, trust, power of attorney.

Example: Facebook settings has a memorialization option, and Goggle has an inactive account manager option. Check these out!

Step #2: Check the Will, Trust, or Other Record

According to Section 4b of the Act, “The user may allow or prohibit in a will, trust, power of attorney, or other record, disclosure to a fiduciary of some or all of the user’s digital assets.” This overrides a contrary provision in a terms of service agreement.

So, what if there is nothing listed in the estate plan?

Step #3: Check the Terms of Service Agreement (RUFADAA Section 4c)

Section 4c of the Act allows access of a designated beneficiary or fiduciary to a user’s digital assets to, “be modified or eliminated by a user, by federal law, or by a terms of service agreement” if the user has not provided other direction.

Example: Instagram allows you to memorialize (like Facebook) or shut down the account. Twitter will shut down the account, along with Yahoo and Apple.

What do you have to present to the custodian to gain access?

According to Sections 7-14 of the Act, the personal representative of the deceased user’s estate must provide the custodian the following:

• A written disclosure in physical or electronic form
• A certified copy of death certificate
• Certified copies of letter testamentary or court order
• A copy of the Will showing user’s content to disclosure
• Number, username, address, unique traits to identify user’s account

If there is a Power of Attorney, Guardian, or Trustee:

• Written request
• Copy of the document granting authority

Conclusion

Digital estate planning is a newer area of estate planning, and it is very important to discuss your wishes with your attorney and remember to review your plan to add any new digital assets you acquire. Also note that some states have specific laws when it comes to your digital assets, so be sure to familiarize yourself with your state laws.

Resources:

FPA of GA Symposium 2021- presented by Tiffany McKenzie, Attorney at Harrison & Held, LLP

https://www.thebalance.com/online-estate-planning-managing-digital-assets-4165810

https://georgia-estatelaw.com/...