A New Normal in Estate Planning – The Digital Estate
We live in the digital age, and the world is going paperless. Many people pay their bills online, use online-only savings accounts or software like Turbo Tax. But what happens to your online world when you pass away? Technology has made having an online presence a convenient and important component of many Americans’ lives. It has also created the need for what the financial planning industry calls “digital estate planning.”
Digital estate planning is merely an extension of the traditional estate planning process – wills, powers of attorney, trusts, etc. – into one’s online world. Unfortunately, it’s not as simple as jotting down all of your usernames and passwords and giving them to your spouse/kids in case you die. Believe it or not, it could actually be considered “hacking” if loved one’s do not have the proper legal authority to access your accounts. Thankfully, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) of 2015 has been adopted in Ohio and spells out how to legally handle your digital estate.
The legal order of legal precedence outlined by RUFADAA is as follows: Online Tools, legal documents and Terms of Service Agreement. Online Tools are website specific settings that let the user choose what occurs at death. It’s important to note that any directives issued via Online Tools will trump those listed in one’s legal documents. The most popular Online Tools are Google’s “Inactive Account Manager” and Facebook’s “Legacy Contact.” While Online Tools have grown in popularity, many websites still do not provide them.
Directives issued via legal documents, such as a will or trust, are often necessary today to ensure a smooth transition of one’s online state. A “digital executor” can be named to handle your online affairs. In fact, it’s possible to name multiple executors for different items. A user could choose their daughter to manage all finance related logins, while deeming their grandson handle all social media. For those seeking privacy, it is possible to explicitly restrict access as well.
Lastly, if no Online Tools or legal documents specify one’s wishes, the law defaults to each website’s Terms of Service (TOS) Agreement. The catch here is many of us are guilty of clicking “I Agree” without reading them. Additionally, many TOS agreements default to account deletion upon death. This can cause headaches for surviving family members, especially if there was never a paper trail to fall back on.
Consulting an experienced estate planning attorney can help provide clarity to your digital estate. They can help you draft or update your legal documents to state your wishes for online accounts. It’s a good idea to provide copies of these documents to trusted loved ones, particularly if they are expected to play a role in the resolution of your estate. Online password manager software can help keep you organized as well. Services such as RoboForm, Dashlane or LastPass can securely store usernames and passwords. Finally, make sure to update and review your estate plan as your goals, needs and online accounts change over time.
The opinions expressed in this article are those of author and should not be construed as specific investment advice. All information is believed to be from reliable sources, however, no representation is made to its completeness or accuracy. All economic and performance information is historical and not indicative of future results.
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