Consider the Importance Digital Asset Planning

Whether you realize it or not, you probably have amassed a large number of digital assets throughout your lifetime. Digital assets include anything that is created, communicated, sent, received, or stored electronically. Think about all the photos, music, movies, and e-books you have on your computer, smartphone, or in the cloud. Add to that each of the accounts you have created to access online banking, e-mail, shopping, or social media sites. These all make up your digital estate.

If something should happen to you, what happens to your digital accounts and files? Who will have access to them? If your family wants to preserve or download the content, will they be allowed to do so? Even if you provide a list of user IDs and passwords to your heirs, accessing someone else’s online accounts may violate applicable terms of service agreements or state or federal law. 

In 2015, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) was created. The purpose of the act is to give individuals the opportunity to specify how and when the executor of their estate (or agent under a power of attorney) can access their digital accounts or assets, subject to some limitations. To date, almost 45 states and the District of Columbia have enacted this legislation and more are considering it. 

If access to, and control of, your electronic files and accounts is important to you, here are a few simple things you can discuss with your attorney to help ensure your executor has the access you desire:

Compiling a list of user names and passwords. Keep the list in a safe place. Because this information becomes public record during the probate process, discuss with your attorney how to best include this information in your overall estate plan.

Checking website policies. Some sites automatically close or delete inactive accounts, while others will disable an account upon request by the family or executor. Certain websites offer an online tool that allows the user to specify how their account should be handled upon death or incapacity and name a trusted person to access the account. Consider taking advantage of these tools when available.

Leaving instructions in your estate planning documents. Leave instructions granting, or restricting, access to your digital accounts for your executor or agent in the appropriate estate planning documents such as your will or power of attorney. Talk to your attorney about whether instructions provided in a website’s online tool or those in estate planning documents will take precedence in the event of a conflict.

When creating or updating your estate plan, be sure to talk with your attorney about how you want your digital assets to be handled. Planning now may help save your loved ones significant time and frustration in the future.

Consider the Importance Digital Asset Planning (jpg)

Consider the Importance Digital Asset Planning (pdf)

 

This article is for general information and risk prevention only and should not be considered another other offer of insurance or legal, financial, tax, or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all losses. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. This information is current as of its publication date and is subject to change. Some of the services referenced herein are provided by third parties wholly independent of Federated. Federated provides access to these services with the understanding that neither Federated nor its employees provide legal or other expert advice. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances. All rights reserved.

Published Date:July 20, 2021

Categories: It's Your Life