As technology becomes a bigger part of our lives, so too do digital assets. What are digital assets? Almost anything that is stored online, on a computer, on a phone or really almost anything that has a login and a password can be considered a digital asset. Social media accounts, digital music, digital photos, email accounts, cell phone apps, crypto currency, subscription services, loyalty programs (frequent flyer miles, hotel points, credit card perks, etc.), domain names for websites, online betting accounts, blog content, etc. Some of these can be financial in nature, but some can be as simple as being sentimental to loved ones.
Many of us have thought about how our physical and financial assets will pass to our heirs through the use of beneficiary designations, wills, trusts, etc., but what have we done about our digital assets and why should you care? First, getting access to someone’s digital assets isn’t as easy as you might think, there are federal data privacy laws in place that prohibit online service providers from giving access to digital assets to someone other than the primary account owner. This includes access to a phone, a computer and even “joint” email accounts.
Many states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) which outlines three tiers for accessing digital assets:
Tier 1: If a digital service provides an online tool (similar to a beneficiary form) then this designation guides what happens to the account. iPhone users can utilize the Legacy Contact on their phone to give access to someone upon their passing (find instructions here). Google users can utilize the Inactive Account Manager to share parts or all of their account data or notify someone if they’ve been inactive for a certain period of time (find instructions here).
Tier 2: If there isn’t an online tool, then the owner’s directions in a will or legal document will determine the handling of the account or asset.
Tier 3: If neither of the first two options are available, then the terms-of-service agreement determines how the account or asset can be accessed. Often those agreements limit access to the original owner.
So what else should I do?
First of all and quite simply, make a master list of accounts and passwords and keep it in a safe location. If you use an online password keeper, make sure a loved one knows how to access it. This is a good first step, but again, laws on both state and federal levels prohibit unauthorized access to computer systems and private personal data. These laws are intended to protect individuals from fraud and identity theft but can also become a major roadblock for family members trying to gain access to a loved one’s information.
A good next step is to provide consent in legal documents. Work with an estate planning attorney to give access to your digital assets to a trusted heir. When your family knows how to access and how your digital assets should be managed, it can certainly help to make their lives easier when the time comes. Some of your information you may want saved, but certain items you may want erased completely – it’s important to outline this in your document. It’s also important to keep your digital estate plan separate from your will for two reasons. First, your will becomes public information upon your passing, and you don’t want to have usernames and passwords in a public document. Secondly, as you add new digital assets or delete old accounts you can update your digital estate plan instead of updating your will. Be sure to leave specific instructions and permissions as to who can access your accounts.
Our world is constantly changing, and digital assets are just another example of other items you need to be thinking about to pass along to your heirs. Take the time now to activate the settings in your online accounts and talk to your estate planning attorney about providing access to your digital property.
If we can be of assistance, please contact your Client Advisor or Wealth Advisory Associate with questions.
Written by Dave Suchland, Client Advisor and Team Leader