Estate Planning Update - Does Your Estate Plan Address All of Your Assets?
After a family member dies, we look to their Will and/or Trust to determine how their assets are to be distributed. Our clients typically have given serious thought as to the distribution of their personal property, financial assets and real estate. With regard to their retirement accounts and life insurance policies, the corresponding beneficiary designations determine the distribution of those assets. However, digital assets and digital content, including but not limited to computers, tablets, smartphones, email accounts, online photo albums, text messages and social media profiles are often overlooked.
It is not uncommon for a surviving spouse or a decedent’s children to be unaware of their loved one’s passwords for their banking, social media and online retail accounts. While it is tempting to write down each online account, account number and corresponding password, it is not necessarily the best practice. The receipt of this information in the wrong hands could be disastrous and the need to constantly update this list is cumbersome.
Luckily, there are other options. One is to use a service that stores this information online in exchange for an annual service fee. If this option is appealing, users should research providers to determine which company’s services best fit their needs.
Another option is to keep two separate lists – one that includes the name of the account and the account number and the other that includes the corresponding passwords. These lists should be given to two separate individuals for safekeeping. The downside here is the need to ensure that the lists are kept up to date and that they are redistributed upon the death or disability of the original recipients.
In addition to either of the two options described, an important step to take is for individuals to update their wills and/or trusts to give their executor or trustee authority to access digital assets after their death. While this may not work in all situations because of an online company’s own policies on access after death, it still may be beneficial to include this language empowering the executor or trustee. With regard to disability, language can be included in the property power of attorney, which gives the agent named under that document the power to access digital assets.
State legislatures have already begun to address this issue, and at least nine states have already passed laws addressing digital access after death. While Illinois has not yet passed a law addressing access to a decedent’s digital assets, it is being considered. Opposition to the passage of a proposed bill has been voiced by online companies who believe that access to a decedent’s digital assets is an invasion of privacy. The laws that have been passed vary widely. Some states give the fiduciary only the right to terminate the online account. Other states grant online access to individuals named only for minor decedents. Finally, other states allow fiduciaries complete access and control over a decedent’s digital assets.
Given the wide range of state laws, the lack of uniformity among online companies and each individual’s own feelings toward privacy, clients should give this matter some thought.
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