21st Century Estate Planning: How to Cover Your Digital Assets.

Even people who have done extensive estate planning often overlook one important fact: digital assets like your social media accounts, online accounts and other digital information may be frozen upon your death making it nearly impossible for your family and other loved ones to access this information after you die.

Unless specific language is included a traditional will or trust may not always cover your digital estate.

The following is a guest post from estate planning attorney, Chris Stanton. Chris is an attorney that I have worked with and recommended to clients for over 20 years.

I hope you find this information helpful.

Estate Planning in the Digital Age, Christopher T. Stanton

During the past year or so I’ve spent considerable time learning how to make it easier for the administrator of your estate to access your assets and distribute them properly when after you die.  Recently, I attended an estate planning seminar for attorneys in Minnesota where the primary focus was on estate planning in the digital age.

The overriding message was clear: estate planning for clients’ “digital assets” is an issue that needs to be addressed as part of a comprehensive estate plan.

In the past we had only paper records and you would simply tell your family members “if anything happens, go look in the file cabinet”.  Today, most of us work with electronic devices like home computers, cellphones, laptops and other similar digital devices.  We have our financial information including our financial statements, our pictures, our email, our online store accounts, frequent flyer miles, as well as social media accounts like Facebook, Instagram and LinkedIn all stored online or on these devices.

Today’s “digital age” creates two big issues:

  1. Because much of the information stored on computers, hard drives and online accounts is password protected, it can be difficult to gain access to the account without all necessary information.  From my own experience, it has been very difficult for me to keep track of all of my user names and passwords.  I have dozens and dozens of accounts that require names and passwords.

If something were happen to me, I don’t know how my administrator would know where I have all of my digital accounts and have the passwords to access to them.

Maybe this describes you as well.

  1. Even if my administrator could find and access my information, the “digital age” creates some legal problems.  There are privacy issues associated with digital assets and laws that criminalize unauthorized access to computers and data.  For example, if your adult children or even your surviving spouse logs on to your accounts without “proper authorization”, they could be in violation of the law.

In addition, the terms of the service agreements you have with companies that maintain your digital accounts may prevent others from accessing them even in the event of your death or disability. The executor of your estate or trustee will need to overcome these obstacles after you die.

Last year, the Federal government’s Uniform Law Commission passed what is called the Uniform Fiduciary Access to Digital Assets Act (UFADAA).  The purpose of the act is to give fiduciaries (executor of a will or trustee of a trust) authority to access, control, or copy digital assets. This uniform law addresses four types of fiduciaries: (1) personal representatives (also known as executors); (2) trustees of a trust; (3) agents acting under a power of attorney and (4) guardians.

In August of 2016, the Uniform Fiduciary Access to Digital Assets Act (UFADAA) was updated and changed to what is now called the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).  It became effective in Minnesota and is codified as Minnesota Statutes §521.A.01, et seq (2016).

As a result of UFADAA and RUFADAA, I recommend that individuals who have any type of digital accounts review their will and trust documents to ensure they comply with the new regulations.

Clients with digital and electronic accounts (think FaceBook, online banking and brokerage accounts, etc.) must incorporate provisions from UFADAA and RUFADAA into their estate planning documents in order to avoid problems in the future.  Authority for your fiduciaries to access your digital accounts is not assumed.  It must be expressly granted within the terms of your Trust, Will and Powers of Attorney.

For more information regarding your digital assets or estate planning needs contact a qualified estate planning attorney.

Chris Stanton can be reached at 651.310.1400, cts@klemp-stanton.com .

Chris Stanton is not affiliated with Focus Financial or Royal Alliance.