Estate Planning in the Digital Age
A lot of things have changed in the past several decades: where once we talked on rotary-dial telephones that were attached to the wall, now everyone walks around with a phone in their pocket. We used to take pictures with instamatic cameras, then have to wait a week for the film to get developed, now, we take pictures with those same phones and share them within seconds. And we used to have to go to the bank to deposit a check or transfer funds, but now, a few swipes on the phone get the job done.
Digital technology makes life easier in so many ways, but it can also create certain complications, at least when it comes to estate planning. Here are a few considerations that didn’t exist back when we got our pictures developed at the Fotomat:
- If you die, who can access your social media accounts?
- What happens to your Bitcoin or other digital currency?
- If your family photos are stored in the cloud, can your loved ones get them?
- If you have a revenue-generating website or blog, what happens to it after your death?
- Who can access your online accounts that hold or manage money, like PayPal or your bank accounts?
- What happens to any online stores you manage on sites like Etsy or Ebay?
- Who is entitled to the contents of your mobile phone, or your computer’s hard drive and external drives?
- What happens to your email accounts when you die?
These are questions that simply didn’t exist (and wouldn’t have made sense) a generation ago. So, while you are making a traditional estate plan that includes a last will and testament, trust, and powers of attorney, you should probably think about estate planning for your digital assets, too.
What Are Digital Assets?
Digital assets fall into three basic categories, which may overlap somewhat: personal digital assets, business digital assets, and hardware and its contents. Personal digital assets may have financial value, like your PayPal account or a blog that generates revenue. Or they may have no monetary value, but significant personal value, like family photographs that exist only in digital form, emails, or social media accounts.
Business digital assets include online accounts registered to a business and business records. And lastly, there is hardware and the data it contains, including music, artwork, photographs, financial documents, etc.
If you were to die tomorrow, your will, if you have one, would name a person to act as personal representative of your estate, with the right to gather, manage, and ultimately distribute your tangible assets. But what happens to your digital assets is less clear. There are many stories of families who have tried to gain access to their late loved ones’ online accounts, only to be locked out and frustrated to discover that there was no clear answer to the question of who had the right to them.
Protecting Your Loved Ones’ Rights to Your Digital Assets
It often takes the law some time to catch up with developments in technology. Some states do not yet have laws on the books. Fortunately, New Mexico does. The Revised Uniform Fiduciary Access to Digital Assets Act took effect on January 1, 2018. The law allows the personal representative of a deceased person’s estate, or the trustee of a trust, to gain access to and manage the decedent’s digital assets and electronic communications.
Having the law in place is a step in the right direction, but there are things you can and should do to make the process of accessing and managing your digital assets easier for the person you want to handle that task.
First, make a list and check it twice. Your personal representative may have the legal right to manage your digital assets, but they won’t be able to if they don’t know what they are. Consider your social media accounts, email, banking, credit cards, photo storage services, music and other streaming. Pay attention as you navigate the internet and figure out what your personal representative will need to retrace your steps: web addresses, usernames, passwords. You may choose to commit these to an online password manager, or go old-school with a binder and hard copies of your information. Do NOT include any sensitive information like passwords in your will, which may become public record after your death.
Second, see if the sites you use will allow you to designate someone through the site to manage access in the event of your death. For instance, Facebook allows you to appoint a legacy contact to take certain actions in connection with your account in the event of your death. Let your intended personal representative know that you have taken these steps, especially if the site itself does not contact them.
Third, make sure you reference digital assets in your estate plan. You may not need to specify that you appoint your personal representative to handle your digital, as well as tangible, assets. However, doing so costs nothing and makes your intentions clear.
If you have questions about estate planning in the digital age, or how to plan for your digital assets, we invite you to contact our law office to schedule a consultation.