by Karla McAlister
We live in a changing world, a seminar I attended this summer alerted me to an area I had not really encountered in estate planning because it is such a new issue. It was a wakeup call for me personally and I believe our clients will also benefit from considering these issues regarding the management and disposition of digital assets. A practical example is when I was contacted by the children of a client because they were unable to access bank accounts for their parent. The parent is now incapacitated and only used online banking, but she could not remember her password and the children could not locate a written list of passwords. They wanted to know if I had a list. Unfortunately, I did not have any information in my file.
Although there is no official definition of “digital asset” yet, you can think of it as any information stored electronically, either online or on an electronic device. This includes text, images, multimedia, travel rewards and points, domain names, games, music, digital books, home security, online storage accounts personal property stored in digital format and also includes words, passwords, characters, codes or contractual rights to access that digital content which is stored online or offline. There are online corporations such as Google, Apple, Microsoft and Facebook and blogs, personal websites, online banking and other online accounts. With the average person having twenty-five online accounts, digital inheritance has become a complex issue. They may be sensitive such as banking and medical information or shared such as social media or contacts in forums.
Two thirds of all digital content is created by individuals, not businesses or organizations. Your “digital assets” increase each time you open a new account, send an email, snap a picture, book a flight, make a purchase or post a comment. Fifty one percent of adults use their bank’s website for banking transactions and seventy-six percent of adults in the United States have a social network site. It has become normal to store data electronically in smartphones, computers and the “cloud” and to conduct transactions electronically. These assets may have monetary value and sentimental value to you and your family.
There are several ways to plan for management of digital assets upon incapacity or death. First, keep a complete list of passwords, online user accounts and other digital assets and update the list often. You should include security questions and answers to ensure fiduciary access as well. A printed copy should be kept in a safe location. You should consider including specific instructions in your estate planning documents regarding management of the digital assets at your death or incapacity. The third-party providers will want explicit provisions to allow your fiduciary to have access to your digital account.
There is a push for a Revised Uniform Fiduciary Access to Digital Assets Act (RUFADA) which has been adopted in thirty-five states, but it has not been adopted in Oklahoma. The goal of RUFADA is to respect a user’s intent reflected in online account options and dispositive documents. One of the biggest hurdles for fiduciaries is that most digital accounts are bound by terms-of-service agreements and these terms of agreement (which most people do not read) determine what happens to an account upon the death of its owner. Some terms of agreement prohibit a user from allowing anyone else to access his or her account. Facebook’s terms-of-service agreement prohibits sharing passwords with anyone. Yahoo! terms-of-service provide that accounts are non-transferable, and the account terminates upon the user’s death and the receipt of a copy of the death certificate and the content is permanently deleted, which may not be what the family or owner intends. RUFADA states that users may consent to the disclosure of their digital assets and it will override any terms-of-agreement.
However, there may be electronically stored information a client does not want to share with family members or beneficiaries and those wishes should likewise be included and addressed in your planning. Specific directions may be made to delete private data.
With new technologies and innovation comes new complexities and considerations in your estate planning. Hopefully, this article will help jump start your effort to help your loved ones by addressing these issues in your planning