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PLANNING FOR YOUR “DIGITAL ESTATE”

A few years ago, security software company McAfee, Inc. conducted a study which revealed that, on average, Americans have a “Digital Estate” worth more than $50,000.00.  At the time, these digital assets were at risk of being lost or otherwise inaccessible when the owner died or became incapacitated.

Protection of Digital Assets

On January 1, 2017, California became one of several states to combat this problem by enacting Assembly Bill 691, commonly known as The Revised Uniform Fiduciary Access to Digital Assets Act or RUFADAA.

What Comprises a Digital Estate?

Before discussing the details of the new law, it is important to learn what makes up a digital estate, and likewise, think about who you want to manage or inherit those digital assets when you’re gone.

  • Online accounts, such as email and social media profiles.
  • Purchased digital assets, like movies, music, books, software, games, and apps.
  • Business tools, such as eBay, Etsy, blogs, and websites.
  • Financial accounts, like PayPal and Venmo, or online banking accounts, like Capital One-360 or auto-debit accounts.
  • Cloud storage accounts, including DropBox, iCloud, Google Drive, etc.
  • Personal memories, including electronic photo libraries and video collections.
  • Other assets, like virtual currency accounts (Bitcoin), avatars (which can be surprisingly valuable!), and important personal documents, hobbies, or career information.

When considering the above, it is clear that digital assets have significant value, both financially and emotionally.

Challenges Before the RUFADAA

Before RUFADAA, family members frequently had trouble accessing the digital assets of the decedent or incapacitated loved one because of password protection and other restrictive terms of service.  What’s more, if the family member even attempted to access the digital assets without clear authority, they were likely violating a host of laws, such as anti-hacking and privacy statutes.

How Digital Assets are Handled Under the New RUFADAA

Codified in California Probate Code sections 870 – 884, the RUFADAA gives ‘fiduciaries’ the legal authority to access and manage an individual’s digital assets and electronic communications pursuant to that person’s estate plan.  A ‘fiduciary’ is defined as a “personal representative or trustee,” who is named in a “will, trust, power of attorney, or other record.”

The new law was supported by the likes of Facebook, Yahoo, and AOL as it provides clear guidelines and a single-legal standard for them to abide by, while also absolving them of liability so long as they acted in good faith in disclosing otherwise protected and confidential information.

Make Sure Your Digital Estate is Protected

In order for the provisions of the RUFADAA to be available, an individual or couple must have a trust or will, and other estate planning documents in place. Although the issue has yet to be litigated since the Act is so new, custodians of digital assets, for their own protection from liability, will almost certainly require the estate fiduciary provide certified proof of their authority. Therefore, it is imperative that very specific language be drafted in the estate planning documents.

POWER OF ATTORNEY:  By adding appropriate language in a Durable Power of Attorney, your power of attorney agent will be allowed to manage your digital assets if you ever become incapacitated.

LIVING TRUST:  Your Successor Trustee, who is named in your Revocable Living Trust, will have the authority to access, manage, distribute, and dispose of your digital assets upon your death. Additionally, you can use the trust to specify the succession of your digital estate (i.e., who you want to leave certain things to, such as photographs or digital assets with a significant monetary value.)

If you fail to give direction on how or who will handle your digital accounts through a will, trust, power of attorney, or “other record”, the RUFADAA states that the Terms of Service of the specific account(s) will control.  This will typically make it difficult or impossible for surviving loved ones to gain access to your digital estate.

Final Thoughts

Digital assets are a part of your legacy and should be treated with the same care used to protect your tangible assets.  The RUFADAA reconciles the user’s interest in privacy with the economic or sentimental value their digital assets hold, and should impact every estate plan prepared in the Internet Age.  To ensure your digital accounts are protected and preserved for your family, consult with an experienced estate planning attorney who can help you determine your specific needs. The knowledgeable estate planning attorneys at Gehres Law Group are dedicated to providing the highest quality services at very competitive prices. Call or write us today for your complimentary consultation.

 

© 2017 Gehres Law Group, P.C. We hope you found this article helpful and appreciate any comments or suggestions you may have. It is for general information only and should not be construed to constitute formal legal advice nor the formation of a lawyer/client relationship.

 

By | 2017-05-22T06:17:35+00:00 May 15th, 2017|Estate Planning, Succession Planning, Wills and Trusts|Comments Off on PLANNING FOR YOUR “DIGITAL ESTATE”