We are currently living in a digital age as we are increasingly dependent on digitalization of everything like online payment of a bill, recharge, shopping, document conservation, etc. to make our life comfortable and thus our assets in digital forms are also increasing day by day. While talking about estate planning and doing it, people often neglect these digital assets while talking about the tactile properties making their loved ones suffer after their demise. Your internet accounts and anything that is stored online is also your property which needs to be protected like your other tangible and intangible properties.
Estate Planning in Digital Age-
Digital assets consist of personal devices like phone, laptop, etc., social media platforms like Facebook, Instagram, etc., internet banking, payment accounts like PayPal, etc., e-mail, photo library, cloud storage, digital currencies, etc. Thus, if you will determine in what way and which person of your choice can access and handle the aforementioned type of digital assets, it would be very comfortable and stress-free for your survivors to do so.
According to the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) of 2015, there is a particular procedure to access your digital estate following the demise or inability of a person. The RUFADAA guidelines provide the authorization of login to fiduciary of their choice whom you don’t want to be responsible for your accounts, instead, you may want some specific people of your choice to handle your accounts.
However, without proper planning, the courts may distribute this access to people you never want to. Additionally, unauthorized access to digital assets involves various privacy issues and is a crime. Hence, proper documentation of authority and appropriate distribution of the digital assets assures you that your digital properties aren’t lost and your survivors don’t have to go through a legal battle.
Considering the increasing digitalization, many states in the U.S. have adopted the Uniform Fiduciary Access to Digital Assets Act and while some others are in the process of doing so. This can be favourable to you if this law has been implemented in the state you are residing in as it provides set guidelines for a representative to manage the digital assets after the owner’s demise. Now while planning your estate, you must ensure that your digital wealth is involved as well. Below are some points you need to keep in mind:
- Make a record of your digital assets: Make a detailed list of your digital assets, including hardware like phone, tablet, etc., computer files, documents and all online accounts.
- Secure a list of login details for online accounts: After creating the list, list down the login details of online accounts. However, ensure to keep this list securely with you either in a safe deposit box or a password management application such as LastPass, 1passwor, etc. and discuss with your trusted advisor about the location of this list. Also ensure that as you change the password of your account, do update it in this list as well.
- Authorize a person: You need to authorize a person responsible for the management of your digital assets in your estate planning documents like your trust, will, etc.
- Letter of instruction: You must pen down the instructions clearly in your legal documents or a letter of instruction regarding your wishes and permission like you want to limit the access only to the online accounts and not to the communication.
However, digital planning is not that much simple as writing the details of your digital assets along with the passwords in your will. As we are aware that the will is admitted to probate, it becomes public and thus there would be no privacy and your online financial and social accounts would be at risk. Instead, it would be advised that you must put this information in a separate document and refer it to your will. You can either authorize your executor or select a separate digital executor to serve the purpose of accessing and disposing of your digital assets.
Another way is to check if your accounts offer an inactivity feature which means that if the user is inactive in the account for a specified time period then the authority will send the credentials to the chosen person by the user. However, you must ensure that this feature is activated with a timeline of 6 months or 1 year and the person you chose is trustworthy.
The world is becoming more and more digital day by day and thus we are spending more and more of our lives online only. So digital estate planning is a must in order to allow your heirs to manage your digital assets after your demise.