A High Tech Reason To Update Your Estate Plan

photo-1432741826919-baadebff52aaIf you own a computer, smart phone or other digital device, your estate plan may be in need of a serious update. Here’s why.

The complexities of today’s digital information have created two major problems (well, way more than two but we’ll focus on just these two for now).

First, passwords and log in credentials are out of control. According to some sources the average person has over 20 different on-line accounts. I think those estimates are low. Between my professional and personal life I have over 50 active on-line accounts. If something were to happen to me I don’t know how my wife, the executor of my estate or anyone else would be able to find those accounts and access them. Logging in to access these accounts or even to pay bills that might be due would be virtually impossible.

Even if they could access my online accounts, I am not sure they could do so legally. To make matters worse, some service agreements – you know, those 2,500 word fine print, online, legal documents that you never read but always click “I Agree” to – well, they may state that upon death there is “no right of survivorship and non-transferability”, and that any content you may have on that site terminates and will be deleted upon your death.

Not all service agreements are that restrictive, but unless you read them you will never know. Click this link if you would like to learn how to quickly read a Terms of Service agreement.

Second, unauthorized access to your digital accounts is now a Federal crime. I am not exaggerating. Recently the U.S. Ninth Court of Appeals ruled that sharing of online passwords was a violation of the Computer Fraud and Abuse Act – an anti-hacking law that’s also been referred to as “the worst law in technology”.

In a dissenting opinion in the case of United States v Nosel (9th U. S. Circuit Court of Appeals, no. 14-10037), Judge Stephen Reinhardt stated that the sharing of passwords for personal electronic devices like smart phones, tablets and computers could turn “millions of people who engage in this ubiquitous, useful, and generally harmless conduct into unwitting federal criminals”.

Now the simple act of sharing your Netflix password with your husband or children could make you a felon.

Fortunately, both Netflix and HBO (and I imagine others in the future) have publicly stated that they will not prosecute people for sharing their login information. If we are smart, maybe we should start looking for that clause in future Terms of Service agreements.

Enter RUFADAA. The Revised Uniform Fiduciary Access to Digital Assets Act or RUFADAA makes it possible for a fiduciary such as the executor of your estate to manage and access your digital assets.

In plain English, this means that a person designated by you will be able to access your email, social media accounts, your various devices, etc. But they can only do this if they have the proper legal documents in place – documents created by you, during your lifetime.

While RUFADAA may help solve many of the problems related to your digital estate it is not a Federal law. It is a template law that each state must adopt individually. So far, 19 states including Minnesota and Wisconsin have enacted RUFADAA. For more about RUFADAA and to see whether your state has enacted this law, click here.

Update your will and trust documents. RUFADAA makes it possible to appoint someone to manage your digital estate, but you still need to meet with your estate planning attorney to update your documents. According to attorney Chris Stanton,  “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”.

It’s always a good idea to review your estate plan every few years. However, in light of today’s growing dependence on technology it may be smart to talk to your attorney about including your digital assets as well.