We have all faced the question “What will our loved ones do if something unexpected happens to us?”
To address that question, most of us have put safety nets in place:
- We draft a will so that our assets can be passed down in accordance with our wishes.
- We also put life insurance policies in place to replace income and provide funding for future goals like retirement and education planning.
- We sign beneficiary designation forms to ensure that retirement accounts and life insurance policies deliver benefits to those intended.
But as more and more of our lives become digital, another question arises: “Have we taken steps to ensure that our loved ones will have access and rights to our digital assets and our on-line presence?”
Over the last decade, issues have emerged in and out of the court room surrounding access to a deceased individual’s digital assets. Since 2015, the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, has been adopted by 38 states, including Texas.
RUFADAA marks the first time that property law recognizes the existence of digital property as a property right that can be managed and potentially accessed by a third party. While this new regulation does not transfer rights of ownership, it can assist with the access and management of your digital life after you’re no longer here.
Not all digital assets have the same value. Small business websites, collections of digital music, and cryptocurrency such as Bitcoin carry a higher monetary value than a LinkedIn page or a Netflix subscription. But even for digital assets that don’t carry significant monetary value, accessibility can make a difference for an executor or for your loved ones.
While RUFADAA can help your heirs manage your on-line affairs, there are some simple steps you can take to address these issues while you’re still in control:
- Take Inventory – Estate planning attorneys are increasingly providing clients with an asset inventory that requests more than just bank and investment account information. Information about your computer, cell phone, computer programs and social media accounts can answer a number of questions your loved ones will have when you’re no longer here.
While you may have had the same computer for years, chances are that you update passwords more frequently. While keeping a list of your digital accounts in a safe deposit box can be helpful, maintaining a current list of usernames and passwords is just as important. There are plenty of on-line password storage sites like LastPass, Dashlane or KeePass that can help you manage access to your digital life, and access to which can be shared with a trusted contact like a spouse or a child.
- Incorporate Provisions and Authorizations – If it’s been years since you last updated your will, it may be worth a review. There may be an opportunity to add language addressing your digital assets. Adding language to your will surrounding the provisions and access of your digital property can help ensure orderly access and management of your on-line presence after you’re gone. The ability of your executor to legally to access your digital assets can assist in the process of disseminating your assets and protecting your executor from legal issues.
Addressing estate planning issues is seldom high on a person’s “to-do” list unless one is terminally ill or the in-law of an estate planning attorney. But making decisions about the inevitable distribution of one’s assets, both financial as well as digital, can be a responsible act of love and consideration for those one leaves behind. Just because it’s not an urgent task does not mean it’s not an important thing to do.
Disclaimer: The information provided here is general and intended as educational in nature. It is not intended nor should it be considered as tax, accounting, or legal advice. Investec Wealth Strategies and its advisors do not provide tax, accounting, or legal advice. We recommend you seek the counsel of your attorney, accountant or other qualified tax advisor concerning your situation.