Don’t Overlook This In Your Planning

When many of us think of estate planning, we think of the management and distribution of traditional forms of tangible property, like personal belongings or someone’s home. Less forethought is often given to items that are now integral to all of our lives: digital assets. Not having a plan in place for these can cause a lot of heartache and difficulty for your loved ones.

Digital assets are electronic records a user owns or has a right or interest in that are accessed through digital devices. These include online bank accounts, email, social media, digital photos, music, domain names and websites, loyalty reward points, and cryptocurrency to name a few. Some of these have significant monetary value while others carry a significant sentimental value.

When someone dies or becomes incapacitated, the laws that protect privacy may make it difficult for their loved ones to access and manage their digital assets. To provide a process for fiduciaries (personal representatives, trustees, agents, and guardians) to manage digital assets, many states, including the District of Columbia, Maryland, and Virginia, have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The RUFADAA provides legal authority for fiduciaries to manage digital assets in accordance with the user’s estate plan, while also providing privacy protections.

There is a hierarchy of ways that one can grant a fiduciary authority to manage digital assets under this law.

1.      Online tools - Some custodians of digital assets, like Apple, Google, and Facebook, have online tools where you can designate a legacy contact. This process authorizes the person you designate to manage your data when you die. If you have used such an online tool, that designation for that digital asset governs.

2.      Estate Plan Documents – If someone has not used an online tool for a digital asset, their estate planning documents can authorize their fiduciary (a personal representative, trustee, or agent under a power of attorney) to manage their digital assets.

3.      Service agreement terms – If someone has not used an online tool or authorized a fiduciary through estate planning documents to manage digital assets, the custodian’s terms of service for the user’s account determine whether the fiduciary may access the digital assets. Service agreement terms can frequently lead to loved ones not having access to those digital assets.

Given how integral digital assets are to our lives, it is important to take the time now to plan for their management upon your death or if you become incapacitated. Planning for digital assets is part of the estate planning process at Ozdeger Law. If you would like to put your estate plan in place, reach out for a consultation!