Downs Law Firm, P.C.
Downs Law Firm, P.C.
Many business owners build their businesses hoping that they will continue to generate income for their heirs, after they pass away. However, businesses often die or lose significant value when the owner dies.
The world has changed, and it really isn’t a good idea to ignore your digital assets when estate planning. Estate planning has generally been about tangible assets through the years. However, now attention needs to be also focused on the digital world in order to be thorough, according to the North Bay Business Journal in “Your digital life likely will outlive you, so here’s how to bring your estate plan into the modern age.” Don’t think you have a digital identity and digital assets? For most of us, we need to take a closer look. Here are a few of your digital assets to consider: bank accounts, email accounts, Facebook page, Linked In profile, online photo albums, blogs and websites. They’re likely to be around long after you are gone. This is still a relatively new area of estate planning. What often happens is that heirs think they can simply find and use the decedent’s user name and passwords to access their accounts. However, what they learn, is that they are legally not permitted to do so. A new law was passed in 2017 in California that attempted to bring order to this chaos. The Revised Fiduciary Access to Digital Assets Act allows executors and trustees to obtain disclosure of a person’s digital assets, after the original owner dies but only under certain conditions. In the recent past, federal and state laws have made it hard for executors and trustees to gain access to these assets without a court order. Just being the executor or trustee does not automatically give you the right to access assets. There must be evidence that the decedent consented to disclosure. Having these access provisions in wills, trusts and powers of attorney is an evolving area. The new law mainly gave social media platforms and privacy advocates what they wanted: a requirement of prior consent before disclosure. However, the end result is that it is easier to gain access to digital assets, if executors and trustees can show that the decedent did consent to disclosure. However, it’s still not that simple. Here are a few steps to help your loved ones deal with your digital assets: Inventory every digital asset that you have. Create a list of log-in and password information, plus any “secret questions/answers.” Having a password program like “Lastpass” can be a great tool to allow for access and control for your decision maker. Tell your trusted family member or friend where that list is. Store it with your other estate planning documents, possibly in your attorney’s vault. Do not include your digital asset inventory, as part of your will. If your estate goes through probate, all of your account information will become part of the public record. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and will most likely include digital assets. If you already have an estate plan, revisit the package with your estate planning attorney and take your digital assets
Your heirs may find themselves at the mercy of thieves if digital assets are not protected. When I first heard a speaker talk about managing digital assets, I dismissed it as “I don’t really have any of those…” It that is your outlook on digital assets, think again: its almost impossible today to not have a significant digital footprint. Your heirs may find themselves facing some problems that are difficult to solve, if your digital assets are not organized, according to the White Mountain Independent in “Is your ‘digital estate’ in order?” Among the problems, is the chance of hackers trying to obtain your assets. Here is a list of your personal accounts that may be online: Financial accounts: banking, brokerage, bill-paying utilities; Virtual property: credit card points, frequent flyer miles, cryptocurrency; Business accounts: eBay, Amazon, Etsy; stock photo accounts; Email accounts: Gmail, Outlook, Yahoo; Social network: Facebook, Twitter, LinkedIn, Instagram; and Online digital storage: Dropbox, Google Drive, iCloud. Those are many assets to protect. Where do you start? First, create an inventory. Use the categories above or create your own. However, you should make it organized. Think about using a password storage program, like Lastpass or Nortons. They are inexpensive and incredibly handy. Make sure the password to that is very good. Document your wishes for how you want your digital assets to be managed. If you don’t specify this, you may be leaving a wide-open arena for long legal battles. Your heirs and beneficiaries may never gain access to them. Hackers might go after them and use your identity. Your heirs may also have to engage in an expensive and protracted battle with a social media giant with costs eating into their inheritance. Provide for managing digital assets on your Power of Attorney and Will. This is a relatively new area, but you can provide power to your attorney in fact and will for management of such assets. Not all states recognize this position, so you’ll want to speak with a local estate planning attorney to find out what the laws are in your state. Maryland has the Maryland Fiduciary Access to Digital Assets Act, which provides powers for the executor in this regard. You will also need to go through all of your online accounts and learn what each platform requires, in the instance of the account owner’s death. Review your plans, especially as you add new digital assets. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, including your digital accounts. Reference: White Mountain Independent (Oct. 26, 2018) “Is your ‘digital estate’ in order?”