Access to Digital Assets of Decedents
The pervasiveness of digital technology in people’s lives has created a challenge for estate planning: how to transition digital assets to heirs. Digital assets may include login credentials (e.g., usernames and passwords to financial accounts, websites, etc.), email accounts, social media, and media files (e.g., digital photos), among others.
The challenge occurs when an account owner passes away; his/her heirs may have difficulty accessing the deceased’s digital assets. This is because, generally speaking, terms of service agreements and privacy policies that one opts into when opening accounts govern access to social media and email accounts, among other digital assets, and typically expire when an account holder dies and are not transferable. This means that heirs are unable to access social media accounts or valuable digital assets, since most state laws that govern the actions of personal representatives or executors were enacted before email and social media became widespread and do not account for digital property.
Over the years, several legal measures have been put forth to address these challenges with the most recent one being created by the Uniform Law Commission (ULC) in 2015 called the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This legislation has received widespread support ever since, and as of March 2021, 46 states have adopted this act or its 2014 predecessor.
The adoption of RUFADAA is significant. The law now recognizes digital property as a property right than can be managed and, in some circumstances, accessed by third parties in a similar manner to other rights in tangible personal property. It also provides a legal framework and clear guidelines for how a person’s digital assets are to be treated should a fiduciary seek access. (Those seeking access may include not only executors after death, but trustees, court-appointed guardians, and attorneys-in-fact.) Importantly, it takes into consideration whether the deceased account holder consented to the disclosure of the digital content, either through a grant of authority in the individual’s estate planning documents (e.g., will) or power of attorney, or through what RUFADAA refers to as an “online tool.” An online tool can be created by online service providers and functions as a form of “digital power of attorney” to indicate who has control and access for a specific site. RUFADAA states the service provider’s own Terms of Service will apply only in the absence of an online tool, or any legal documents.
As a practical matter, having a discussion with one’s parents or loved ones about where account logins and passwords are kept is a good starting point. Although not as secure as some online tools, a simple solution is to have account and password information written down in a notebook and kept in a secure location known to personal representatives/executors.
The importance of digital assets in estate planning has never been greater. We encourage you to speak to your estate planning attorney to understand whether RUFADDA is approved in your state and how you may want to consider factoring that into your estate planning.
As always, we at SBH are here to discuss this and other topics regarding your broader financial plan. Please contact your portfolio manager or email us at contactus@sbhic.com if you’d like to speak with us.
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