What Happens to Your Digital Assets When You Die?
Gregory Palacorolla, CFP ®
60%! According to AARP and a survey by Caring.com in 2017, more than half of Americans don’t have a will in place. That number becomes even larger when you drill down to a specific subset of estate planning called “Digital Estate Planning.” We have thrust ourselves into the digital age at lightning speed in many ways. However, have we prepared ourselves for what this means, and how this will impact us (or our loved ones) in the event of our death? Despite our likely aversion to discussing our own personal demise, it truly is a conversation worth having if we want to help ease the burden of those left behind.
What are digital assets?
Digital assets encompass things that have a home “online.”
- Email accounts
- Subscriptions/loyalty or cashback programs
- Social media content
- Online accounts such as for banking/bill pay
- Picture and document storage
- Music, video, gaming
- Frequent flyer accounts
- Cryptocurrencies such as Bitcoin or Litecoin
- And more
So, what happens to these things when you die? Oftentimes people don’t know where to look, or even think about their loved one’s digital world. Without the proper information regarding passwords, usernames, and authority to access, this digital world becomes a nefarious black hole to our loved ones.
Did you know?
- According to the cashback website Top Cash Back’s “Loyalty after Death” report published in 2017, 60% of people have not made family or friends aware of the loyalty programs they belong to. Loyalty providers set their own rules on whether points or cashback accrued can be transferred when you die.
- Purchases such as e-books, video/films, and digital music cannot be passed on. The right to access these files lies with the user only.
- If you don’t point out somewhere that you’ve given lawful consent to access your accounts, anyone who does so could be subject to fraud or unlawful use charges. More than 40 states, Maryland is one of them, have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This act provides instructions for how a person’s digital assets are to be treated should a fiduciary seek access, whether it is by executors after death, trustees, court-appointed guardians, or attorneys-in-fact. Online service providers can create a tool online that functions as a power of attorney to specify who has control and access for that specific site. RUFADAA also laid the groundwork for digital asset rights being specified in legal documents, such as wills and powers of attorney. It clearly states that online tools and legal documents take precedence over the service provider’s own terms of service. For a list of states who have adopted RUFADAA, please click here.
What Can You Do?
- Download your e-books, films/movies, and digital music to an external hard drive, MP3 or Kindle.
- Insert language into your will or trust explaining your wishes for your digital assets and authorizing the company’s that hold this online information to disclose that information to your executor or administrator.
- In addition to the above, write a digital directory to be kept with your will. This document should detail every online account and the following:
- Website address
- Your instruction upon death (for example, close account)
- For Bitcoin owners, you can entrust your executor with the private key or keep it in a safe deposit box. The alternative to this is utilizing a third party such as Coinbase, who offer a “vault” that is like a safe deposit box for your private key.
- Check your state laws. State laws are in the infancy phase when it comes to digital estate planning, but ensuring your plan is consistent with state law is vital.
- Revisit and update your digital estate plan every couple of years.
Are There Tools Available to Assist?
Yes! There are many electronic apps which help with your digital assets and estate planning.
- Encrypted electronic vaults, such as AfterVault, Estate Map, and Secure Safe give you secure, online, encrypted information vaults to organize and store your important documents and information you wish to pass on to your loved ones.
- Directive Communication Systems (DCS) provides estate planners and personal representatives with a powerful solution for managing personal accounts. DCS works with accounts to implement an estate’s final wishes which may include deletion, transference, memorialization or other instruction.
- Backupify is a service that helps users download content from Gmail, Facebook, Twitter, and other personal accounts.
Let’s face it, no one enjoys thinking about, let alone planning for their demise. However, no one wants to leave their loved ones lost in a digital black hole while they’re trying to grieve either. Proper planning can make a world of difference, so don’t wait. Contact us for more information.
Sources: The Digital Beyond/ Moneywise/ Kiplinger
© Geier Asset Management, Inc. Nov. 2018. Gregory Palacorolla, CFP ® is Director of Wealth Management for Geier Asset Management, Inc., a Registered Investment Advisor. The articles & opinions expressed in this material were gathered from a variety of sources, but are reviewed by Geier Asset Management, Inc. prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice. The views expressed are those of the firm as of November 2018 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of results, or investment advice. Any advice given is general in nature and investors must consider their own individual circumstances. In all cases, please contact your investment professional before making any investment choices. Geier Asset Management, Inc. is not responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.