04 Oct Digital Assets and Your Estate Plan
In today’s digital age, many of us have more online accounts than we can keep track of. The internet has undeniably made everything we do easier, quicker, and (mostly) cheaper. It’s no wonder our society has moved more towards managing our personal, business, and financial lives through a myriad of online accounts. These online accounts as well as any other electronic record in which a person has a right or interest comprise a person’s digital assets. And just like any other asset, these assets need to be accessed by an agent or personal representative in the event of the account owner’s disability or death.
How Access is Granted
Some online accounts will allow the owner to grant permission to another individual to access the account at the owner’s death for purposes of maintaining, updating, and/or closing the account. For example, Facebook has recently added a “Legacy Contact” for this precise purpose. Any designation directly made through the account administrator will trump any other designations made in an account owner’s estate plan.
In the absence of the ability to make the designation directly with the online account provider, Illinois now has a law that allows an individual to make the designation in his or her estate plan. The Uniform Fiduciary Access to Digital Assets Act, effective August 2016, covers the procedures and requirements for guardians, executors, agents, and trustees to access digital assets of disabled or deceased individuals.
An individual who is living but incapacitated can be assured that their online accounts will continue to be managed by having a power of attorney in place that appoints an agent to do so. If a guardian is appointed for a disabled person, that guardian is also granted access under the Act. Once a person dies, their Will or Trust will control who can access their online accounts.
There may be reasons why a person may not want to grant full access to their accounts. For instance, if there are confidential communications due to a statutory or other privilege (such as attorney-client emails) or other sensitive information or photographs, a person can limit access by providing those limitations in the power of attorney, will or trust document. It’s also possible to name a separate trustee or executor just to deal with the digital assets if the initial fiduciary is not someone that you want accessing all of your digital assets.
Effectuating Digital Asset Access
Speaking with an estate planning attorney about the best way to plan for your digital assets is a great way to ensure that your wishes are carried out in the event of disability or death. Another key step is to make sure there is a list of digital assets kept with or near your estate plan. The information should include account names, logins and passwords, and answers to security questions. The list should also identify all computers, laptops, tablets, telephones, and other electronic devices and the requisite passwords to access same. Without this roadmap, there will inevitably be missed accounts or an inordinate amount of time spent tracking down accounts.
To hear more about Digital Asset planning and other estate planning topics relevant to today’s modern family, join Jennifer Guimond-Quigley on October 13, 2016 at Bennett Day School (Chicago Flagship campus) for an informative presentation in conjunction with Jessica Merino with Merino Wealth Management. Click here for event details.