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Digital Assets and Estate Planning

Who Has Access to Your Digital Assets When You Die?

This isn’t a simple matter, even if you’ve planned.

It used to be that people kept important things in filing cabinets, banks, and photo albums. Now everything from communications, to photos, to music, to sensitive financial information is increasingly kept online. In fact, 51 percent of U.S. adults bank online, according to the Pew Research Center; and 63 percent of all American adults, and 27 percent of all Americans ages 65 and older, use social networking sites.

And, while the Internet has made things easier in many ways, it can cause a lot of complications when someone dies or loses the ability to manage their own affairs. That’s why the Uniform Law Commission, a group of state appointed attorneys, created the Uniform Fiduciary Access to Digital Assets Act (UFADAA) as a way to clear up some of the complications.

Right Now, Accessing a Loved One’s Account Could Be a Criminal Act

What becomes of a person’s digital life, such as their Facebook accounts, Flickr photos, and online banking information, when they die or become incapacitated?

Currently, there’s no good answer. Very few states have laws that deal with these issues. Even if someone’s will contains instructions, there is no guarantee their wishes will be carried out. (Gerry W. Beyer and Naomi Cahn, NAELA Journal, Vol. 9, No. 1)

Often, only the account holder can legally access their online account. The terms of agreement on many sites prohibit sharing passwords and third-party access.

Worse, it may be an actual criminal act to violate those terms of the service agreement. Even a fiduciary, the person that’s designated to act in your best interest, could be breaking a federal privacy law or the Computer Fraud and Abuse Act when accessing your account.

The Current Limits on Access Makes the Problem of Identity Theft Worse

Glenn Williamson discovered what all too often happens when his mother passed away. The identity thieves get busy.

“The year after somebody passes is one of the most vulnerable times for identity theft. It’s a heinous crime, but it’s what the bad guys do, because death is public record, they’ll go out there and they’ll comb through recently deceased and they’ll create a fake identity, because the deceased don’t check email and they don’t get the mail,” said Williamson in a July 2014 interview with PBS.

The inability to access a loved one’s digital assets makes problems like Williamson’s much harder to stop.

UFADAA Is an Important Update for the Internet Age

The UFADAA gives people the power to plan for the management and disposition of their digital assets the same way they can make plans for their tangible property: by providing instructions in a will, trust, or power of attorney. If a person fails to plan, the law contains provisions for distributing those assets.

Also, the Act would put limits on access to digital assets and extends a fiduciary’s existing authority and duties when overseeing a person’s tangible assets to include the person’s digital assets. Read a complete summary.

The Uniform Law Commission will introduce UFADAA in 2015. It will be up to state legislatures to pass it.

So far, 26 states plus the District of Columbia have expressed interest in a UFADAA bill for 2015. Delaware has already enacted a statute based on UFADAA. Obstacles still exist – some Internet companies oppose the UFADAA because of the administrative costs associated with complying.

Find out more about the UFADAA and what you can do by visiting the Uniform Law Commission website.

Nearly everyone has digital assets that have real value, both monetary and sentimental:

  • Personal assets such as photographs, videos, email, music.
  • Social media assets: These sites are used for both social interaction as well as storage of photos, etc.
  • Financial accounts: Things like Amazon account information, arrangements to pay bills online (mortgages, cable, cell phone, etc.)
  • Business accounts: Businesses collect data such as addresses and credit card numbers. Physicians store patient information. Attorneys might store client files or use online storage such as a Dropbox-type service. A blog or domain name is valuable but only accessible through a password.

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