Proper Estate Planning Can Help Safeguard Your Digital assets
An increasing number of individuals are utilizing online tools, including email, social media and other electronic applications. With a click of a keyboard, they can take care of everything from email and text messages to activities like paying bills online and managing bank and other financial accounts.
Many individuals aren’t aware that the “digital assets” on their computers may represent an important component of estate planning. One study estimated that individuals have more than $35,000 each of personal records locked away on their electronic devices; and an executor or other fiduciary may not be able to access them after an individual has passed on.
Digital Assets Need an Estate Plan
Without an estate plan that addresses digital assets upon death, they may be subject to restrictive federal or state laws, or even the “terms of service” of an online service provider. A surviving spouse who tries to use the decedent’s password to log on to his or her online bank account may be violating the Stored Communications Act of 1986 and/or the federal Computer Fraud and Abuse Act, which keep Internet service providers from disclosing the contents of a user’s information.
These kinds of restrictions can even become an issue during a person’s life, since agents for an incapacitated individual—acting under a power of attorney or as conservators and trustees—may also be barred from access.
Digital assets that may be inaccessible to fiduciaries—and potentially lost to heirs—could include login credentials for online bank accounts, email accounts, social media accounts, and Word documents, PDFs, music and other information stored on computers, tablets, or Smartphones.
Proposed Legislation May Help
A bill recently passed in NJ—the “Uniform Fiduciary Access to Digital Assets Act (UFADAA)- would enable a fiduciary to manage the digital property of a person who has passed away or has lost the ability to manage his own property.
The act covers four types of fiduciaries: executors, guardians of incapacitated persons; agents appointed under powers of attorney; and trustees. It would allow fiduciaries to manage certain digital property, including computer files, web domains, and virtual currency,
Urbach & Avraham Can Help
If Gov. Christie signs the UFADAA, it will be simpler for individuals to ensure that their digital assets are properly protected. The bill would still restrict a fiduciary’s access to email, text messages, and social media accounts—unless the original user consented to expanded access in a will, trust, power of attorney, or other record.
Urbach & Avraham, CPAs works closely with estate and elder law attorneys, and we will be pleased to work with you to address your estate planning and other needs.