Partner Content

What estate-planning moves
 do I need to
 make to protect my digital assets?

© Courtney Keating

We live in a world were nearly everyone uses the internet to store important information on computers. What happens to this information, whether at your death or incapacity, depends on the plans you put into place while you are alive and competent. Those digital assets fall into four basic categories:

1. Personal Devices

• Computing hardware, including computers, external hard drives, flash drives, tablets and smartphones.

• Information or data stored electronically, whether online, in the cloud or on a physical device.

2. Social Media Accounts

• Facebook, LinkedIn and Instagram accounts, involving interactions with other people and offering storage used to hold on to photos, videos or other electronic files.

3. Financial Accounts

• Online banking accounts, used to pay monthly bills, manage investment accounts and maintain accounts with e-Bay, Pay Pal, Amazon and other internet-based companies.

• Loyalty-program reward accounts, such as cash-back balances or airline miles.

4. Business Accounts

• Information tied to businesses and stored on computers, including resources such as client lists, with customer credit card information and addresses. For doctors’ offices, stored patient medical information; for attorneys’ offices, confidential legal files.

• Domain names or blogs, copyrighted materials, trademarks.

Until laws catch up to technology, there will remain uncertainty regarding our digital assets after we no longer can manage them for ourselves.

Estate planning for digital assets is important if you want to be sure your family/executors are able to access your accounts and make distributions of your assets in accordance with your wishes.

Additionally, you’ll want to prevent your personal information from falling into the hands of the wrong people and resulting in identity theft, financial loss, public exposure of private emails or documents and or/loss of personal items of sentimental value, such as stories, photographs and letters.

Given all these digital assets and their obvious value, what can you do to provide access to them after your death or incapacity?

First: When opening a social media account, read the user agreement/terms of service. Oftentimes, these agreements contain information enabling you to specify what will happen in the event of your death or inactivity on theaccount. At the very least, you’ll become informed of any policies involved.

Second: Create an inventory of all your digital assets, including websites, user names and passwords. Keep the inventory updated and either give a copy to a trusted family member, or advisor, or put it in a safe place such as a safe deposit box or home safe. Be sure to let someone know of its existence and whereabouts.

Third: Have your will, revocable trusts and power of attorney documents revised to give your executor/personal representative and/ or agents authority, enabling them to gain access to your digital assets.

Even if you do all of the above, there may still be obstacles preventing your representatives from accessing your digital assets. These obstacles include federal law and state law restrictions. Recently, the Uniform Law Commission created the Uniform Fiduciary Access to Digital Assets Act, (UFADAA), which is up for consideration by many states.

As of this writing, the act has passed in six states (Delaware, Michigan, Oregon, Tennessee, Wyoming and Florida). Other states have limited legislation regarding access to digital assets, but that may change.

Until these laws catch up to technology, there will always remain uncertainty and/or complications regarding our digital assets, after we are no longer able to manage them for ourselves. However some planning now will likely alleviate certain potential obstacles our loved ones may face in the future. Be sure to take that action, to protect your digital assets for the generations to come.

This article is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. To the extent anything herein could be construed as tax advice, such advice is not intended to beused and cannot be used to avoid penalties under the Internal Revenue Code, or to promote, market or recommend to another person any tax-related matter. This information is general in nature and may be affected by changesin law or in the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

Trust & Estate Planning

Disclaimer: Worth magazine is a financial publisher and does not recommend or endorse investment, legal, insurance or tax advisors. The listing of any firm in the 2023 Worth® Leading AdvisorsTM Program does not constitute a recommendation or endorsement by Worth magazine of any such firm and is not based upon Worth magazine’s experience with, or prior dealings with, any advisor. The information presented for each advisor, including but not limited to any related profile, statistical data, presentation, report, commentary, recommendation or strategy, has been provided by such advisor without review or independent verification by Worth magazine. Any such information is the sole responsibility of the advisor. Worth magazine makes no representation or warranty as to the accuracy or completeness of such information, assumes no liability for any inaccuracies or omissions therein and disclaims responsibility for the suitability of any particular investment recommendation or strategy for any person. Nothing contained in Worth magazine constitutes or should be construed as any form of investment, legal, insurance or tax advice or as a recommendation to buy, sell, hold or trade any securities, financial instruments or assets. Readers are advised to consult their legal, financial, insurance and tax advisors prior to making any investment or pursuing any investment strategy. Past, model or hypothetical performance is not indicative of future results.

back to top