Have You Planned for Your Digital Assets?

Have You Planned for Your Digital Assets?
Riker Danzig Tax and Trusts & Estates Update February 2015

Almost all of us, regardless of age, have managed to acquire digital assets.  We have e-mail accounts, social media accounts, personal and professional websites, domain names, photos and videos on YouTube, and an ever-increasing amount of financial data (even tax returns) for which we have only electronic copies.  If you were suddenly unable to access all of this yourself, what would happen? Could your family gain access to the accounts they need?

The growing awareness of the problem led to the Uniform Law Commission’s approval last year of the Uniform Fiduciary Access to Digital Assets Act.  The intent of the Commission is to provide a legal framework that would allow an executor, trustee, guardian or agent acting under a power of attorney to access electronic records and accounts without violating current privacy and computer fraud laws, regardless of the provisions of any term of service agreement a particular provider may have in place.  Nonetheless, these provisions will not become law unless separately enacted by a particular state’s legislature.  This has not yet happened in either New Jersey or New York.

So what should you do?

1. Prepare an inventory.  Chances are that your list will be far longer that you initially imagine, as you include not only bank, investment and credit card accounts and passwords, but tax returns, domain names, social media accounts, bitcoin accounts, photos, videos and electronic book and music collections.

2. Utilize the options offered by your providers for designating successor access to your accounts. These options are not guarantees (companies do go out of business, or change policies), but to the extent available, they can make the work of your executor or agent far easier.

3. Consider back-up.  Both downloads and paper copy may be appropriate to ensure that computer failure (which can also happen) does not destroy the inventory you have so carefully prepared.

4. Consider adding specific authorization for executor and agent assets to digital access to your estate planning documents.  While the scope of your agent or executor’s powers under existing planning documents should enable access in many circumstances (assuming they know the assets exist), explicitly authorizing appropriate access in writing in your will or trust and your durable power of attorney can only help to avoid problems for your loved ones.