Cover Your Assets: Securing your legacy in a Digital World

In the past months, the firm has been asked to speak at various venues, for different audiences, on several topics, including "Estate Planning from a Parent's Perspective," "Special Needs Planning," "What is a Trust and do my Real Estate Clients need one?"  The next seminar topic we will be giving is one we are quite excited about: "Cover your Assets: Securing your Legacy in a Digital World."

We live in a time of new technologies like social media, online accounts, and cryptocurrencies.  These are broadly known as digital assets and it is not always clear what we truly "own" and where our rights go if we are unable to manage these assets.  

The Revised Uniform Fiduciary Access to Digital Assets Act creates a process for determining who is authorized to manage or control your digital assets after you have passed away. (This can be found in California Probate Code, sections 870 to 884).  This means that there are specific ways to protect this management and access, but also that these permissions can be different depending on the company's policy.

Here are some steps you can take now to determine what happens with your assets if you cannot manage them, due to incapacity or death.

Bank Accounts/Brokerage Accounts:

If you are unable to make your financial decisions due to incapacity, no one else can sign for you, unless they are authorized to do so.  This can either be granted through a legal document called a Durable Power of Attorney (made while you have capacity) or through a court order. 

Financial institutions are supposed to honor your wishes as set through your Durable Power of Attorney or Financial Power of Attorney if you are incapacitated to make your financial decisions.  It's important to create this document in the course of your Estate Planning.  In the event there is no Power of Attorney and you become unable to make these decisions, your loved ones would need to go through a court process called Conservatorship to make your decisions.  The purpose of the Power of Attorney is to eliminate the need for this court process.  (Though financial institutions are legally required to honor statutory Powers of Attorney, it is prudent to see if the institutions you use have anything else they require.)

E-mail Accounts:

If you are reading this blog post, you probably have at least one e-mail account.  This is a prime digital asset.  Some people ask, what happens to my e-mail account if I'm no longer around?  This specific scenario is a good example of why appropriate Estate Planning is important; this allows e-mail providers to know who your personal representative/executor is and who you would allow to make these decisions.

Here are examples of two of the most frequently used e-mail services' procedures.

• Google: During your lifetime, you are able to assign a "delegate." You can also choose your preferences regarding who is contacted and what they can do through Google's "Inactive Account Manager." This gives the chosen person(s) the ability to access your account data for three months. You can also choose that if your account has been inactive for a designated period of time, the account and data will be deleted.

• Yahoo: Yahoo's terms of service do not let anyone else to access your account or data. However, it does have a process for your personal representative to close your account, upon providing the necessary information.

Social Media:

Social media accounts are rife and different platforms continue to emerge.  Similar to the process with e-mail accounts, it is much easier for a loved one to manage what happens to your social media account if they are listed as the trustee/executor in your Estate Plan.

Here are examples of the current policies for Facebook, Twitter, and Instagram.

• Facebook

              Option 1: Choose three to five friends for Facebook to contact if you get locked out of your account.

              Option 2: Set up to delete account when you pass or have a memorialized account (“Remembering” Bob Jones) if Facebook becomes aware of your passing by someone submitting a request.  The request may require proof of death.

              Option 3: Set up a Legacy contact who can manage your account.  The account holder must be 18 years old to set up a legacy contact.  The legacy contact will be able to do things like pin a post on your timeline, respond to new friend requests and update your profile picture. They won't post as the account holder or see private messages.

• Twitter

              Twitter will not give anyone access to your account, but will accept requests to deactivate an account from an immediate family member of representative of the estate.

• Instagram

              Accounts can be memorialized or removed when a request is made that includes necessary evidence.  For example, this evidence may be a birth certificate, death certificate, legal documentation that you are the personal representative of the account holder’s estate.

iPhone data (updated December 16, 2021)

If you own an iPhone, you likely have many photos and data on your phone. Apple now has implemented a feature to designate an iCloud legacy contact. If you have passed away, the legacy contact needs to request access and provide a unique access code (that you would have needed to provide to your legacy contact ahead of time) to Apple in order to gain access.

Cryptocurrencies:

Here is a post on our blog regarding cryptocurrencies.  Because cryptocurrencies are meant to be confidential, it is very important to make sure these assets are specifically addressed in your planning.  You need to be educated on what to do so that your investments are not lost forever.

How can an Estate Plan secure my digital assets?

A comprehensive Estate Plan that has been created recently should include language about management of your Digital Assets.  What the legal language will indicate is that whoever you've nominated to control these digital assets (generally, your successor trustee, agent, attorney in fact, power of attorney) has the power to take any action regarding these digital assets.  This language is important to specifically give "lawful consent" of this access to those you've nominated. Its’s worth noting that if you simply give someone your password, this is not automatic authorization to access your accounts and they may be violating the terms of service for the website in question.

How do I inform my loved ones about what digital assets I hold?

If your trusted loved ones are unaware of what digital assets or accounts you have, then they cannot manage them.  Depending on your level of comfort, there are several ways you can provide this information.

1. Use the "paper and pen" method to write out a list of account usernames and passwords. This list can be put in a safe place like your Estate Planning portfolio.

2. Put the list on hardware (e.g. USB) that you have put in a safe place. Make sure that your loved ones know where this hardware is located; this can be done in your Estate Planning portfolio.

3. Utilize a password app (e.g. LastPass, KeyPass) to store all of your account information. Your loved ones will need to know where you have kept the app master password.

We currently give our clients a “Digital Assets Inventory” template so they can document and update what they currently use.

We hope this post was helpful in guiding you as to what you can do now to protect your digital assets.  Make sure you create a plan that fits you for all of your assets and covers all of your wishes.