Individuals now have on average a minimum of 90 online accounts. While that number may sound high, think of all the online banking passwords, multiple email addresses, social media accounts and apps you have on your phone. But lawmakers have been slow to address what happens to these digital assets after the account owner’s death. A recent WealthManagement.com article, “Creating an Effective Digital Estate Plan,” looks at how to address the gap now.
Until the Uniform Fiduciary Access to Digital Assets Act (or UFADAA) was written by the Uniform Law Commission, there were few attempts by lawmakers to address individuals’ digital estate. To date, only 20 states have passed the Act, with another 12 state legislatures reviewing it.
So what can you do now to plan? The article suggests three options.
- Write out passwords. This is definitely not your best option. For one thing, we should all be constantly updating our passwords, so that list requires a lot of maintenance. For another, if a service provider flags your heir’s access to an account, privacy laws mean there’s a change fine could be levied (in some cases, a fine of $10,000 per use!). This is definitely a hope-for-the-best option, and not something we’d recommend. Heirs will likely need access to these accounts and will need the password information, but you shouldn’t merely leave a list.
- Work with service providers. Many service providers like Facebook, LinkedIn and Twitter have developed policies regarding deceased users’ accounts. It may be as simple as Googling a service provider to find out more about their policy. However, many service providers are still negotiating this process and may have either no policy or not one you’d like. But it’s always best to do the research to know your options. Some websites have even compiled information about the policies of more popular service providers.
- Look into a “digital legacy” company. As consumers learn more about the challenges of passing access to digital assets on to heirs, digital legacy companies have created helpful tools. Different companies operate differently, but all look to assist heirs in gaining access to digital accounts after a death. Of course, all will charge a fee of some kind, so it’s best to consult with your estate planning attorney to discover what tools will work best for your family and state.
Since this area of law is changing rapidly, you should be in communication with your estate planning attorney. For states that have passed the UFADAA, there may already be options to build planning for digital assets into your estate plan. For others, you may have to get creative. The UFADAA has not yet been introduced in Massachusetts, so we at Family Estate Planning Law Group will be looking into your digital estate planning options to ensure the smooth transition of your digital assets.
Reference: WealthManagement.com (July 20, 2016) “Creating an Effective Digital Estate Plan”