Estate Planning in a Digital World
January 23, 2017
In an increasingly digital age, more and more of our most valuable assets are taking on digital forms. While most people are familiar with basic wills and trusts as management tools for bequests of tangible personal property, our digital assets are often overlooked in the context estate planning.
Digital assets can account for a significant part of an individual’s estate. A person’s digital estate consists of the digital media rights that can be inherited. Your digital estate includes data stored on personal devices (phones, tablets, laptops, etc.); social media accounts (Facebook, Twitter, Instagram, etc.); online banking and investment accounts; cloud storage accounts (Google Drive and DropBox, etc.), music purchases (Itunes, Spotify, Tidal, etc.); email accounts; eBook and audiobook collections (Kindle, Audible, etc.); and photograph libraries, to name a few.
In 2015, the Uniform Law Commission in cooperation with major internet players, including Google, Facebook, and Yahoo, developed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), to clarify and standardize the procedures for accessing digital assets following an individual’s death or incapacity. In short, RUFADAA allows fiduciaries to manage digital property like computer files, web domains, and virtual currency, but restricts a fiduciary’s access to electronic communications such as email, text messages, and social media accounts unless the original user consented in a will, trust, power of attorney, or other record.
In August 2016, Minnesota adopted RUFADAA. Wisconsin introduced its own version of the act in April 2016 with the primary difference being the use of the term “digital property” vs. “digital asset.” This subtle difference allows courts and legal practitioners to integrate digital property rights into existing property law concepts in Wisconsin.
As you consider incorporating your digital assets into your estate plan, you may find the following tips useful:
- Prepare an inventory of your digital estate. Make a comprehensive list of your digital assets, including computer hardware and wireless devices, important digital files, and all online accounts.
- Keep a secure list of passwords for online accounts. Create a list of online account access passwords. Plan to keep this list in a safe deposit box or another secure place in your home. For added security, save the list as an encrypted PDF file or use a password management application such as LastPass, Dashlane, or KeePass. Instruct trusted advisors, including your attorney-in-fact, as to the whereabouts and/or master password to the list. Passwords change frequently, so be prepared to regularly update your list.
- Identify individuals and provide authority to manage your digital estate. As noted, such individuals can be identified in your estate plan, including your will, trust, or power of attorney.
- Provide detailed instruction. Do you want your digital fiduciaries access to be limited to online accounts and restricted from online communications? Make it known in your estate plan.
Start Planning Today
As technologies advance, our digital estates will continue to grow. Including your wishes, providing user name and password information, and assigning fiduciaries is an essential component of your estate plan and is a critical step to ensuring appropriate management of your digital assets when you are gone. Contact us for more information on updating your estate plan to incorporate digital asset management.