Not long ago, an executor’s job was relatively straightforward. By taking a physical key, unlocking a physical lock, rummaging through a couple of kitchen or desk drawers, an executor could have most of what would be needed to wind up the deceased’s affairs. There would be paper statements, bills, and invoices, and maybe a safe deposit box key somewhere.
In today’s digital world, things are much different. Much of what we do is online, from managing finances like online banking to managing your cable and utility connections. Photos may be stored in a box or two somewhere, but most of them are likely going to be stored on a locked cell phone or a digital account somewhere. There’s also email social media accounts like Instagram and Facebook to be dealt with.
Estate planning for digital assets
The first thing that comes to mind when talking about digital assets are investments like Bitcoin or Ethereum. But digital assets also include documents and photos you have stored on a cloud account like Apple iCloud or Microsoft OneDrive and any music or movies you might have purchased over the years on Apple or Amazon Prime. What happens to those assets if you aren’t around to log into those accounts?
We’re happy to answer any questions you have about our firm and our processes. Here are answers to some of the questions we receive most frequently.
If your read the terms of service on most websites or apps, you’ll note that the account terminates at your death, meaning that anything stored on those accounts are technically gone at the moment of your passing. You’ll also notice that logging into someone’s account using their credentials is also prohibited. In practice it will take time before those accounts are closed and you’re unlikely to be prosecuted for hacking your father’s Facebook account.
To further complicate matters, the last thing that tech companies (who have billions of users) want to do is go through wills and trusts to figure out who has rights to access accounts of deceased users.
Laws to govern access to digital assets after death
Fortunately, most states have adopted a unified framework to help govern how to manage your digital affairs after your death.
The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) is a law that provides the executor of an estate, or an attorney, with access to someone’s online accounts after death or incapacitation. RUFADAA extends the power traditionally given to the Executor of an Estate or a Trustee when managing someone’s tangible assets to include their digital assets as well.
Accessing Digital Assets under RUFADAA
RUFADAA lays out a three-step process for making sure your executors and fiduciaries will have access your digital records when you die.
We are fiduciaries, and it’s not just a word. It’s a binding commitment to put your interests first.
The first step is to use an online tool, such as Apple’s Legacy Contact. Much like an IRA beneficiary designation, when you designate a legacy contact using the company’s online tool, which has priority over anyone named in a will, trust, or other estate planning document. This allows your legacy contact to go into your account, see what’s there, and either close the account or gather valuable records like photos or documents and move them somewhere more accessible. The challenge here is that you must name someone for each online account you have, since there aren’t any consolidated tools available (yet).
Despite tech companies’ desire to avoid having to work with legal documents like wills or trusts, RUFADAA requires that if a user hasn’t designated a legacy contact using the online tool, then a fiduciary can be granted access to these accounts by submitting these documents to the company. This could be a time-consuming process for your executor.
Terms of Service Agreement
The last step is the Terms of Service Agreement. If you haven’t left any instructions regarding your digital assets in your estate documents, and you haven’t assigned a legacy contact for other accounts, then the Terms of Service agreement will dictate whether or not anyone can access your account to retrieve your digital assets. In most cases, this will mean those records are lost for good.
When it comes to managing your digital assets after you’re gone, planning ahead is the best strategy. Find out which accounts have a digital tool that you can use to name a legacy contact person. More importantly, make sure that your estate plan addresses your digital and electronic assets.
At Blankinship & Foster, we help you clarify and organize your finances so that you always have a clear picture of your situation. We work with you to plan for the future, and as life happens, we will be there to support you in your journey. Contact us to learn more about how we bring clarity, confidence, and direction to your personal finances.