Digital Estate Planning: Are You Ready?
Do you have a digital footprint? If so, what provisions have you made in your estate documents for the recovery and use after you are no longer here? Our world is becoming more and more based on our electronic use. We can access accounts and handle transactions electronically with our banks, credit card companies, and even our health care providers. You can order almost anything from online companies around the world, including ordering groceries for pickup or delivery. But, have you given thought as to what happens to these accounts when you pass away? Who and how will your digital executor access these accounts?
Michael Kitces (financial planner, author, speaker, and former practitioner editor of the Journal of Financial Planning) describes digital assets as anything which is stored in electronic form (but separate from the physical hardware on which the electronic data lives). So, this includes things like cryptocurrencies (i.e. Bitcoin), to your login credentials to your bank, credit cards, social media, music or email accounts.
You may have addressed this challenge by simply writing down all of your usernames and passwords and made them available to a trusted family member or advisor. However, the legal profession identifies a hacker as anyone who knowingly accesses a computer or account without proper authorization. Accordingly, the Computer Fraud and Abuse Act and the Electronic Communications Privacy Act provides punishment by law for hacking. So, if someone other than yourself accesses your account, they are technically hacking and punishable by law.
The current law regarding protection of digital assets, the Revised Uniform Fiduciary Access to Digital Assets (RUFADDA) has had a rocky road since 2014. However, currently, almost 40 states have adopted RUFADDA, with another five jurisdictions introducing consideration of the digital assets legislation. South Dakota adopted RUFADDA July 1, 2017, Wyoming enacted legislation on July 1, 2016; however, neither North Dakota nor Montana have been able to enact any such legislation.
Are you aware, if your estate documents do not address and grant post-death authority to your digital executor, access to your digital accounts may be lost. For example, each of the internet browsers (Google, Microsoft, Yahoo) all have Service Agreements or Terms of Service which most of us have not read, but all marked “agreed” when we set up the account. These agreements have different positions of what happens to the account when a user passes away, and limitations on who may access the account. Google’s Inactive Account Manager will allow a “trusted contact” to be named and if desired, to share information with this contact. Or, the user can direct Google to delete certain information. Facebook’s Legacy Contact contains similar features.
Be aware, if you use these online tools, referred to above, and name someone other than your digital executor identified in your estate documents, account access will be granted to the named individual contained in the online tool, and not your digital executor. Under RUFADDA, use of the custodian’s online tool will render all other instructions (including the estate documents) irrelevant. However, if the online tool is not available or not utilized, RUFADDA will then look to the estate documents granting access to the deceased account by the digital executor.
It is imperative we correctly manage and ensure continuing access to our digital accounts at our passing. Accordingly, estate documents should contain identification and access to our digital assets and consider the appointment of a digital executor. Our individual digital footprint will continue to expand. How we and our trusted advisors plan for this inevitable outcome is definitely a conversation which must be undertaken now. The trusted advisors at Ketel Thorstenson are always available to assist you with these and other estate planning challenges.