Americans generally understand the value of an estate plan in order to distribute assets and support the family. However, one of the newest form of assets can often be overlooked. Those assets are digital, according to Think Advisor in “The Big Hole in Estate Plans: Digital Assets.”
Most people are active online, from financial accounts like online banking services to social accounts. Many people don’t realize that they have substantial digital assets with both sentimental and financial value. Without a clear plan that specifies what someone wants to be done with these digital assets, there are both federal and state laws that can block loved ones—even those named executor or power of attorney—from accessing those assets.
Digital asset planning must now be part of every comprehensive estate plan to ensure that any disposition of a person’s wishes for these assets takes place.
The concept of estate planning for digital assets actually covers a broad range of assets from email to social media to PayPal, domain names, intellectual property and cryptocurrency. Some assets may only have sentimental value but others such as domain names or business contact lists in email accounts may also have significant monetary value.
Without a clearly documented plan, data privacy laws can prevent the online service provider from allowing an executor or family member access to these accounts. The Uniform Fiduciary Access to Digital Assets Act, which has been passed in most states, provides that an owner of digital assets can specify who can access and dispose of any digital assets after death.
If there has not been any planning, the online provider’s terms of service agreement, or TOSA, will control what happens to accounts after death. In some cases, TOSA will even override directions in a will or other document, especially when the service provider has provided specifications for how account holders are expected to make their post-mortem wishes known.
Note that instructions by a person using their online provider’s tools, will supersede any instructions in the will, so include these documents in the estate plan. They should be updated regularly.
People need to create comprehensive lists of all their digital assets, including instructions on how they want these assets to be handled after they die. They should list user names, passwords and security questions. Do not include this information in the will, because it can be accessed publicly during probate. They then need to review the TOSA and follow each platform’s rules for providing post-mortem access.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and will most likely include digital assets.
Reference: Think Advisor (Oct. 4, 2018) “The Big Hole in Estate Plans: Digital Assets”