Most people have an extensive network of digital relationships with retailers, financial institutions and even government agencies. Companies and institutions, from household utilities to grocery delivery services have invested millions in making it easier for consumers to do everything online—and the coronavirus has made our online lives take a giant leap. As a result, explains the article “Supporting Your Clients’ Digital Legacy” from Bloomberg Tax, practically all estates now include digital assets, a new class of assets that hold both financial and sentimental value.
In the last year, there has been a growing number of reports of the number of profiles of people who have died but whose pages are still alive on Facebook, LinkedIn and similar platforms. Taking down profiles, preserving photos and gaining access to accounts are all part of managing a digital footprint that needs to be planned for.
There are a number of laws that could impact a user’s digital estate during life and death. Depending on the asset and how it is used, different things happens to it after the owner dies. Fiduciary access laws outline what the executor or attorney is allowed to do with digital assets. Almost all states have adopted a version of RUFADAA, an act that extends or limits a fiduciary’s ability to access digital accounts.
Digital assets are virtual and may be difficult to find without a paper trail. Leaving passwords for the fiduciary seems like the simple solution, but passwords don’t convey user wishes. What if the executor tries to get into an account and is blocked? Unauthorized access, even with a password, is still violating the terms of the TOSAs.
People need to plan for digital assets just as they do any other asset. The best way, for now, is to make a list of all of your digital accounts and look through them for death or incapacity instructions.
Reference: Bloomberg Tax (April 10, 2020) “Supporting Your Clients’ Digital Legacy”