The issue of Digital Asset Estate Planning is not coming up in the future, this issue is real and needed right NOW! A lot of people think that this type of asset protection planning does not apply to them, but take a look at your smart phone; how many apps do YOU have that are related to money? Acorns, banking apps, stock trading accounts, hotel points, etc.,.
Our firm has taken a proactive approach and have a strategic partnership in place with Final Security who work in conjunction with us so that together we can design a plan that offers end-of-life services that cleans up your digital footprint left during your lifetime, and helps you pass on your most important digital information and ease the burden of your loved ones! Stay tuned for more information on this to be covered in future blog articles soon!
If the first rule of estate planning is to have an estate plan including a last will & testament, durable power of attorney, healthcare power of attorney and living will, then, the second rule is to plan for your digital assets. A recent article from Forbes titled “New Estate Planning Rule: Don’t Leave an Electronic Mess” makes it clear: this new part of estate planning is here to stay.
Much of our lives is conducted online today. However, few people realize the full extent until they begin making an inventory of their digital assets. Estate planning law has caught up to these new developments and it is now up to us to do our part, so our loved ones aren’t left to clean up a digital mess.
Almost all states have enacted some form of the Uniform Fiduciary Access to Digital Assets Act, which generally gives an executor the right to manage computer files, web domains and cryptocurrency, unless the decedent’s will prohibits this access. In theory, all the executor needs to do is show proof they are authorized to act as executor. However, in practice, it’s not really so simple.
The new law does not address emails, text messages, social media accounts and other digital assets without express permission being given in a will, trust, power of attorney or other legal document or court order. Recent years have seen many headlines about families trying to access their loved one’s digital lives. Few families have the financial resources available to engage in a court battle with Big Tech companies.
Executors and heirs will need a complete list of all digital assets and accounts, including everything from cell phone to GoDaddy accounts, bank accounts and online subscriptions. You should also provide your executor with information about any credit cards used to pay for these services, so they can shut down recurring payments once the assets have been accessed and safely downloaded from the platform.
Start by listing all the ways you access your smart phone. If you use facial recognition, be sure your phone has another way of accessing it, such as a password, or a code sent to your email which can be received on a laptop or desktop. You should also provide access information for these devices.
Apple, Google and Facebook now permit users to name legacy contacts who can designate another person to access your accounts after death. Use these and add them to your digital assets inventory.
You may be surprised to learn you don’t actually own many of the online assets! Most platforms sell a license to use books, music, movies and other assets. The rights are described in the Terms of Service Agreement you clicked on when you signed up for the platform, that most of us do not take the time to read through. You don’t own them, so you can’t leave them to heirs.
Many people are starting to use password managers. However, you’ll need to update these whenever a password changes and be sure to provide your executor with a master password to the account.
Your estate planning attorney will tell you not to put any specific account information into your will, since this becomes a public document during probate. It would be the equivalent of putting your Social Security number, date of birth and a list of investment accounts in your will. Imagine the potential consequences of putting a cryptocurrency password key in your will: Anyone could have access to that information once the Will is recorded!
Speak with your estate planning attorney about how they are preparing estate plans for digital assets and be sure to follow through on the necessary steps. While it may seem like an arduous task for you, it’s better for you to take care of this and plan ahead during your lifetime than to simply leave it to heirs. Your family will thank you.
Reference: Forbes (July 27, 2022) “New Estate Planning Rule: Don’t Leave an Electronic Mess”