Creating an Effective Digital Estate Plan

Creating an Effective Digital Estate Plan

The term “estate planning” generally includes documents such as a Last Will & Testament, financial power of attorney, health care power of attorney and maybe a trust. However, to address the growing online presence of individuals from young to old, estate planning has grown to include planning of an individual’s digital assets on their death or disability as well. In fact, recent articles suggest that the average user possesses upwards of 90 online accounts. What exactly happens to those accounts when your clients die?

Many people assume that an executor or a family member will gain access to the accounts, but for many states, that is not currently the case. The laws in most states do not grant an executor or family member access to online accounts at the time the owner passes away. The Model Uniform Fiduciary Access to Digital Assets Act (UFADAA) was drafted to provide states with consistent rules and procedures for accessing digital information, however, many digital access providers have vigorously fought to stop states from passing legislation similar to the UFADAA. In an effort to take a step forward, some states have passed slimmed down legislation to allow limited access to certain accounts, such as email. In addition to state laws, each individual digital access provider has their own rules and requirements for gaining access to personal information.

Because access to digital accounts following the death of a family member can be daunting, it is important that clients implement an effective digital estate plan. The principles which guide traditional estate planning are also applicable to digital estate planning. Keeping important documents updated and in a place where family members and/or an executor can access the information is especially important with digital accounts. Most people have a myriad of email addresses, passwords, pin numbers, reset questions, thumbprints, secret knocks and code phrases that grant us access to our accounts. However, how many of those access keys are accessible by a family member and/or executor?

There are currently four methods to transfer access upon death: written instructions, access through specific digital providers, password managers and digital legacy services.

Written Instructions

Many digital users record their passwords and access information and store the instructions in a secure place, such as a personal safe or safe deposit box. If the information is updated regularly and stored in a safe location, this can be the cheapest and simplest method to transfer access to a surviving family member or executor. However, because passwords and other login information change regularly, it is important that the written instructions be updated regularly as well. The necessary upkeep of recording and storing this information can require a significant time investment.

Digital Providers

Many digital account providers are beginning to provide solutions to this issue. For example, Facebook now allows users to designate a profile executor who can access the account upon the death of the account creator. Twitter allows the person authorized to act on behalf of the deceased person to request an account to be deactivated. Email providers, like Google and Yahoo, will consider granting access to an account (or certain limited information) by the authorized person following a review of a written request, and a Gmail user can designate an Inactive Account Manager who may access certain information if the account is inactive for a designated period. While these individual solutions are helpful, it is difficult to prepare each account to be accessed by a surviving family member or executor, since each provider has different rules.

Password Managers

Third party password managers, like LastPass, KeePass and Dashlane, all provide methods to send access information to certain designated individuals on the death of the user. Generally, all password managers have the ability to share stored information with others; however, some password managers provide springing access. For example, LastPass allows users to choose one or more accounts to which they want to grant access and send an advance email to any individual. The email contains a link, which once activated, begins a countdown clock. During the designated timeframe, the original sender has the ability to reject access. In the event that the original sender does…

What Makes up Your Digital Estate?

Estate Planning To Protect Client Digital Assets In North Carolina

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Estate planning documents are designed to protect clients’ wishes both during life and after death. In a durable power of attorney document, a client may pick an agent to help him manage his finances and legal affairs should he become mentally incapacitated during life. And in both will and trust documents, the client may determine how he wants his assets used or distributed after death.

But in the Internet age, it can be difficult to separate certain assets such as financial accounts from the computers, websites, and software used to operate, manage, manipulate, and convey information about those accounts. Thus without proper estate planning incorporating the client’s digital assets, it is a mistake to assume that client fiduciaries such as agents, guardians, executors, and trustees will have the tools they need to perform their obligations.

Existing Laws Do Not Provide Automatic Fiduciary Access To Digital Accounts And Digital Information

In North Carolina, statutory law does not support automatic fiduciary access to digital accounts and digital assets. An NC proposal addressing estate planning and digital accounts was removed from the statute S.L. 2013-91 (N.C. Gen. Stat. 30-3.1) before the Governor signed on March 12, 2013. A few other states have passed digital assets legislation.

Without clear direction from NC state law, controlling law is still mostly dictated by two 1986 Federal statutes which predate the commercial Internet. Although these Federal statutes are outdated, they still guide court decisions.

The overriding purpose of both the 1986 Stored Communications Act (SCA) and the Computer Fraud and Abuse Act (CFAA) is to protect the computer user’s privacy and to prevent unauthorized access to the user’s digital assets. As a result, the computer service providers subject to the SCA and CFAA maintain service agreements that include only one user, and strictly prohibit “unauthorized access.” Some service agreements also state that the individual user’s rights are “nontransferable.” Thus, when a user becomes mentally incompetent or dies, fiduciaries may have difficulty getting access to his online accounts.

In addition, many online services will refuse to release the password information from a deceased user, even in the face of a judicial order or civil lawsuit.

Best Practices Require Both Authorization And Transfer Of Log-on Data Including Passwords

In the absence of a modern statute controlling fiduciary access to digital assets, best estate planning practices require both 1) clear authorization from the principal, grantor, or testator in the estate documents authorizing the fiduciary to access the digital accounts; 2) the actual transfer of account information including log-on information and passwords.

Although these preparations may not work forever and may not work with every digital account, these steps may be the best that NC estate planners can do until controlling laws are modernized. Some digital providers have revised their rules to permit fiduciaries to access online accounts when the proper authorization is included in the primary user’s estate planning documents.

Authorization Language and Definition

Estate planner Jean Gordon Carter and colleagues provide sample authorization language, which may be included in a will:

“Digital Assets. My executor shall have the power to access, handle, distribute and dispose of my digital assets.”

They also advocate including a broad definition of “Digital Assets” in the will.

Proper authorization to use digital assets language should additionally be included in the durable power of attorney document, in order for the agent to be fully able to conduct an incapacitated grantor’s business and legal affairs.

Transfer of Account Administrative Information

In addition to the digital assets authorization language needed in the estate documents, the grantor must also physically transfer to the proper fiduciaries the administrative information required for using the digital assets. This includes account information, log-on information, and passwords.

Randy Siller, a registered representative of Lincoln Financial Advisors Corporation, shares the following seven best practices for clients transferring digital access information to fiduciaries as part of an estate plan:

  • Digital Hardware. List all digital hardware, including desktops, laptops, smartphones, iPads, USB flash drives, and external hard drives.
  • Financial Software. List all financial-related software programs used, such as Quicken, QuickBooks, and Turbo Tax, which may include important tax and business information, as well as passwords.
  • File Organization/Passwords. Provide an outline of the file organization on digital devices so fiduciaries will know where to find important files, as well as any passwords they may need to gain file access.
  • Social Media. List all social media accounts, such as Facebook, LinkedIn, Twitter, and Cloud websites, as well as the information needed to access each one.
  • Online Accounts. Prepare a list of all online accounts including bank accounts, investment accounts, retirement accounts, e-commerce accounts (Amazon, PayPal), credit card accounts, and insurance accounts. It is critical for fiduciaries to have access to these providers.
  • Subscriptions. Ensure that a list of online subscriptions such as Netflix, Norton Anti-Virus, credit reporting/protection subscriptions, and streaming music subscription services are documented so fiduciaries can access or cancel those services.
  • Email. List all personal and business-related email accounts, and how to access them.

Social Media

It is easy for estate planners to focus on protecting monetary assets. But the control of a client’s “digital legacy” on social media may also be important.

Geoffrey Fowler, writing for the Wall Street Journal, has noted: “The digital era adds a new complexity to the human test of dealing with death. Loved ones once may have memorialized the departed with private rituals and a notice in the newspaper. Today, as family and friends gather publicly to write and share photos online, the obituary may never be complete.”

To deal with the desire for users to allow their loved ones to memorialize them through their Facebook accounts at death, Facebook recently decided to allow members to designate a “legacy contact” to manage parts of their accounts posthumously. Members may now also choose to have their presence deleted entirely at death.

On The Horizon

Likely the most complete proposal addressing the need of clients to effectively give fiduciaries access to their digital estate has been written under the auspices of the Uniform Law Commission. The Uniform Law Commission approved the recent Uniform Fiduciary Access to Digital Assets Act (UFADAA) on July 16, 2014 in Seattle, WA.

The Commission states:

The UFADAA gives people the power to plan for the management and disposition of their digital assets in the same way they can make plans for their tangible property: by providing instructions in a will, trust, or power of attorney. If a person fails to plan, the same court-appointed fiduciary that manages the person’s tangible assets can manage the person’s digital assets, distributing those assets to heirs or disposing of them as appropriate.

Until such reforms become law, the best strategy for passing down digital assets to fiduciaries requires both including proper fiduciary authorization language in the estate documents, and the physical transfer of digital asset user information to fiduciaries.

Your Digital Legacy - What Happens To Your On-Line Stuff When You're Gone?

Your Digital Legacy – What Happens To Your On-Line Stuff When You’re Gone?

People plan, or should plan, for all types of contingencies after their demise; a living will, family trust, a last will and testament, even a durable power of attorney to express your wishes about your demise if you’re alive but not able to do so yourself. But what about your digital life? Who has the authority to deal with these properties (intellectual or otherwise) after you’re gone?

Most responsible people have left professionally drafted and approved instructions about what they want done with their money, worldly possessions, other valued assets, and even their remains. But it’s unlikely that the average person has left instructions about how they want their on-line identities and their contents handled.

Hence, your digital legacy, a.k.a. “what becomes of your on-line sites and materials?”, is becoming a major topic of discussion among estate planners and lawyers who have been charged with handling these affairs in your absence.

Since all social media sites require passwords to access them, and we’ve been admonished to death (forgive the pun) about how to protect them, no one can access your accounts to shut them down or even to advise your friends and followers that you will no longer be posting, at least not from this plane. And, because we’re taught to change our on-line passwords frequently, giving your estate’s executor a list of passwords is a cumbersome task; it would seldom be up-to-date.

As a result, it often requires a court order to access the information that you’ve created on your Facebook, Google+, Twitter, Yahoo, eBay, PayPal, Skype, etc. accounts to close them down. (Do you even know how many of these accounts you have, active or otherwise?)

But fret not; this need has created a business opportunity, a hole that’s been filled by companies that specialize in handling your digital legacy after you no longer have a need to post to your Facebook page, or any other site.

Many of these sites offer services that include granting access to your representative, posthumous email services, and on-line memorials where friends and family can share loving thoughts and photographs about you.

According to their web site: Legacy Locker is a “secure repository for your vital digital property that lets you grant access to online assets for friends and loved ones in the event of loss, death, or disability.” That’s the gist of what these web services are about.

The Digital Beyond is an on-line service where you can find a complete list of companies that offer a variety services; digital estate planning, posthumous emails, and on-line memorial. Helpfully, this site includes a chart that compares these companies to each other in terms of the services that they offer. For example, you might not want an email service posting in your absence, so why pay for it? Some sites listed here are only on-line memorial sites and wouldn’t function as an effective digital legacy service. Companies named “After Steps,” “Asset Lock,” “Chronicle of Life,” “Eternity Message,” “Great Goodbye,” “My Wonderful Life,” “Parting Wishes,” even “Dead Man’s Switch,” give you a sampling of what these sites are about.

It would behoove you to browse around and compare the services, just as you would when looking for an estate attorney to handle your other affairs, then sign on with the one that suits your needs best. Doing so before your family or attorney has to do it will take the pressure off your loved ones to figure it out while they’re adjusting to their loss.

Once you’ve hired a service, here’s hoping you won’t need to use it for a long, long time.

UPDATE: April 12, 2013

Obviously, Google is listening to the media, and perhaps my own tech blog, as they just addressed the issue of what to do with the information you’ve posted on-line through Google’s own services. It’s called “Inactive Account Manager,” which they acknowledge in their statement is an inelegant name, but it’s intent is what’s important, and it seems that they got that mostly right.

With this service turned on, you’re able to predetermine what to do with the information that Google has in your account should something untoward happen to you in an untimely manner. In other words, if you don’t use your Google account within a set number of months (you decided how many), it will automatically delete your account and its content.

It also gives you the ability to notify people that you’ve specified to know that this is happening to your Google information.

The immediate flaw that I can see is that it asks for a way to contact you if your account has been inactive for a month. If I’m in some heavenly (hopefully) afterlife, trust me, my email alerts will be turned off.

Information contained herein is for guideline purposes only, is not intended as an endorsement of any product, and is no guarantee of the results.

Column: What happens (online) when we die?

Column: What happens (online) when we die?

A little over four years ago, my friend Tommy was in a car with a drunk driver and two other kids when it skidded out of a curvy road and rammed a pole about a mile away from my house. The other guys suffered only minor injuries, but the impact occurred on the back right door of the ’99 Nissan Sentra, where Tommy was sitting. He experienced irreparable head trauma and died in the hospital a few hours later. He was 17.

The way my hometown of Simsbury reacted was pretty interesting. Usually, we get the rap of being the basis for Eagleton in “Parks and Recreation” (i.e., rich and self-interested and anti-Amy Poehler), but everybody rallied around Tommy’s family to let them know they were loved and considered. It’s sad that tragedy is the catalyst for community outreach, but the results of sympathy, empathy and friendship were kind of beautiful.

How we express condolences and remember our loved ones is a little different now. Like everything else, it’s on the Internet, de-privatized for the world to see. People don’t necessarily have to go to the tombstone anymore. They can leave messages on the deceased’s social media profiles instead or in addition to. There are, to this day, Facebook statuses recalling memories with Tommy, with Tommy’s profile “tagged,” but Tommy is not there to receive the notification.

Something tells me Mark Zuckerburg never considered a social media afterlife, his own online cemetery. Quite frankly, it makes me a little squeamish. I always envisioned death as something more privately mourned.

Nevertheless, Facebook has its own “Memorial Mode” that allows relatives to take control of the deceased’s profile. Upon proof of death by someone who is in a clear position to act as an agent, Facebook will take down sensitive contact information like phone numbers and past statuses, and solely allow Facebook friends to post to their wall. Additionally, the site will add the word “Remembering” next to the name at the head of the profile.

However, nothing the deceased didn’t want shared while living is available to whoever gains access to their Facebook. There have been a handful of court cases with Facebook regarding teens who committed suicide and parents that sought more information, but were not allowed to obtain it under Facebook’s staunch privacy laws.

Facebook isn’t the only site seeking to help relatives (somewhat) connect with their loved ones posthumously. Gmail and Hotmail will allow families to order a disk of the deceased’s messages upon showing a death certificate and proof of power of attorney. Photography website Flickr is similar to Facebook in that an account will be forfeited to the family of the dead person, but anything considered private while the person was alive will not translate into accessible content afterward. And different sites such as Legacy Locker store an array of passwords to be utilized come death; each one has similar authority as the aforementioned sites.

Where it gets weirder is browsing The Digital Beyond, a site aggregating other webpages “designed to help you plan for your digital death and afterlife.” For instance, “Afternote” gives people the opportunity to “record your final wishes for your funeral and digital legacy,” essentially a digital will.

Most people are probably typing their wills on computers nowadays as it is, but what contributes to the eeriness of these places is how specialized they are, whereas sites like Facebook and Gmail are primarily utilities for the living with posthumous capacities. Above all, we have now reached a point in the digital age where we acknowledge and show legitimate concern for our material and digital lives alike.

The Internet is changing the way we shape our legacies. Our grandchildren will not refer to yearbooks, photo albums or home videos, but rather our Facebooks, Twitters and Instagrams. This is but another installment in our ongoing engulfment by the screen, another nail in the coffin to our immaterial surrender.