Don't Let Your Digital Assets Die With You

Don’t Let Your Digital Assets Die With You

This is not your father’s . No, your parents never had to worry about usernames, passwords and TOSAs (terms of service agreements). Their likely focused on the disposition of traditional – a house, bank and brokerage accounts, and the like – and were likely fairly straightforward.

But, increasingly, as our lives have become more virtual, you’ll have to think about how your loved ones and your fiduciaries can legally gain access to your should you die or become incapacitated, according to Suzanne Brown Walsh, a trusts and estates attorney with Murtha Cullina LLP.

Where to begin?

Getting a handle on digital assets requires a knowledge of one, traditional estate planning and traditional estate settlement; two, digital assets; and three, the difference between traditional assets and digital assets.

Traditional estate planning and estate administration typically involves the naming of a fiduciary, an executor for your will, a trustee for your trusts and a personal agent for a power of attorney. In the world of traditional estate planning and estate administration, those fiduciaries have the ability to manage or distribute traditional assets and accounts, bank and brokerage accounts, retirement accounts, property and the like when you die or become disabled.

But that’s not the case when it comes to digital assets. A is something that exists online and is probably intangible. It might be, for instance, an asset with mere sentimental and no monetary value such as a photo or voicemail, or it might be an asset that has monetary value, according to Walsh.

 

It could be, for instance, a blog or a domain that you own; digital currencies, such as bitcoin; accounts with iTunes, Amazon, LinkedIn, Twitter, Facebook; as well as reward programs and credit card points, according to William Bissett, a certified financial planner with Pinnacle Advisory Group and founder of Principled Heart.

And the big difference between your traditional assets and your digital assets is this: there are federal and state laws that protect digital assets and may impede fiduciary access to them. What’s more, technology providers have their own privacy and terms of use policies that may govern your digital assets and make access to those assets difficult or impossible.

“There are federal privacy laws that protect the companies that provide us with emails and certain other online services from disclosing our private information to anyone else, including our families and fiduciaries,” says Walsh. “So that means if we die or become incapable, the people who are managing our assets can’t call up Google and ask for access to our email accounts.”

The federal privacy laws do, however, allow companies to provide access to online accounts to third parties with their customer’s lawful consent, Walsh says.

So what do you need to do?

Given these complications, Walsh recommends that owners of digital assets draft – with the help of an estate-planning attorney – documents that give a personal agent or representative the ability to access online accounts in the event of the owner’s death or incapacity.

 

Those would include a digital asset authorization and consent form, durable powers of attorney, and trustee authority over settlor’s digital estate. See samples here.

“We suggest that our clients sign it and give their fiduciaries and their agents under power of attorney their lawful consent to access their online accounts that might be subject to these privacy laws,” says Walsh.

Another to-do is to create an inventory of your digital assets, user names and passwords (My Digital Audit is one example of a digital asset inventory form). You should also consider using a commercial DEP service, such as those found at The Digital Beyond. One such service stores all your user names and passwords and only requires that you remember one user name and password. “That way, if (you) get hit by the beer truck, (your) family will only have to remember one user name and password,” Walsh says.

In the event of your death or incapacity, Walsh also suggests that your loved ones and fiduciaries become familiar with such websites as Mylennium.com, which contains an index of many online sites with links to information such as the TOSA, privacy policy and termination information. See Domain Information Resources. Also, consider using commercial services such as Directive Communications Systems, which will assist in identifying and managing all types of online accounts. See a resource page here.

Also consider that some online companies, chief among them Google and Facebook, have policies that give you the ability to dictate who can look after your account in the event of death, incapacity or inactivity.

 

You can appoint a legacy contact, someone you choose to look after your account if it’s memorialized, on Facebook, for instance. See “What is a legacy contact on Facebook?”

And Google has an Inactive Account Manager, which is a way for users to share parts of their account data or notify someone if they’ve been inactive for a certain period of time. See About Inactive Account Manager.

Why do you need to plan your digital afterlife?

To be fair, you might question the need to plan for your digital afterlife. But there are many reasons, according to Walsh.

One, your digital assets might be worth a lot of money, and you’ll want to make sure you there’s no financial loss to your estate, says Walsh. In 2013, for instance, McAfee noted the average U.S. consumer had digital assets they valued at $35,000.

To boot, you don’t want to lose your story, your photos and the like. “In my world, we often find that families will fight over things that have no financial value but have the greatest sentimental value,” says Walsh. “Often digital photos are the most important digital asset. You don’t want to lose the story line that we now have in our social media accounts.”

Bissett shares that point of view. “The plan for pictures used to be that they kids will get them from the shoebox in the hall closet,” he says. “That was fine, but today they aren’t only in the shoebox. They sit online with a username and a password separating your loved ones from them – if they even know about them at all.”

 

Also, you might want to protect secrets from being revealed, a mistress or child born out of wedlock, for instance.

You’ll naturally want to avoid identity theft.

And lastly, you’ll want to make things easier for your families and fiduciaries to gain access to your digital assets in the event of death or incapacity. “Many Baby Boomers grew up in a time where they lived next door to their grandparents, had Sunday dinner ‘with the family, knew the President of the only bank in town, and saw everyone at church on Sunday,” says Bissett. “When someone died, it simply meant making a few phone calls. That is no longer the case and the legal world doesn’t support that anymore. It’s your responsibility to put things together in such a manner where someone can act like they lived next door.”

The laws they are changing

You’ll also need to know that digital asset laws are changing, and for the better. Walsh and others, for instance, have worked on something called the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).

RUFADAA, which has been described by at least one expert as most important law you’ve never heard of, gives estate planners and fiduciaries greater ability to access and to manage digital assets, before and after death, according to Walsh. Read this post by Jeffrey Levine, chief retirement strategist at Ed Slott & Co., for more insight.

Eleanore

Eleanore

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