Does Your Estate Plan Have Provisions for your “Digital” Assets?November 20, 2012
Avoid Losing access to your digital accounts should you become disabled or pass away.
Do you have a Facebook, PayPal or eBay account? Do you pay your bills online? Do you run your business through the internet? Do each of these electronic accounts have the same user name, password and security questions? Does anyone besides you know where to find this information? Have you given any thought to how your personal representative or executor would access this information should you become disabled or pass away?
Digital assets and access to those assets are a new area of law. To date, only five states have enacted legislation in this area: Connecticut, Idaho, Indiana, Oklahoma and Rhode Island. Most of these laws are still in their infancy. For example, Rhode Island’s legislation provides access to an executor or administrator to e-mail accounts only.
Access to your digital accounts is probably limited by the lengthy user agreement which required you to click “I agree”, but probably did not read. Some of these agreements may actually have provisions that state your account terminates upon your death and that all information will be deleted. Even if the user agreement is silent on these issues, most web companies will not release information without a court order or some written document releasing them of liability for disclosure.
In order to avoid any loss of access to your electronic accounts, you should prepare an inventory of the accounts, including any monetary value for each. It is important to keep this list up to date and in a place that your personal representative can get access to (most likely a hard copy). Ideally, you should have a “digital power of attorney” and the agent named should be very computer savvy. If the digital assets are substantial in value, you should consider creating a trust just for these assets.
Losing access to these accounts is just one problem should you become disabled or pass away. A more common and potentially dangerous problem is identity theft. All a good hacker has to do is read the paper for the obituaries or guardianship filings, and they will be opening new credit card accounts and shopping in your name.
Your personal representative or executor has to be given the tools necessary for them to execute their fiduciary duty and protect your digital assets.
If you would like to discuss this topic, or any other wealth planning issue, please contact Peri Ann Aptaker or call 401-274-2001.
Read more from Peri on Estate/Success Planning and “Why Your Family Business Must Have A Succession Plan” on the KLR Business Blog.
KLR Wealth Management works closely with families and high net worth individuals in the Boston market to provide professional services to successful individuals and families. KLR Wealth Management offers assistance with investment advisory services, insurance services, retirement services, estate, gift, trust and succession and tax planning.