Estate Planning Enters the Digital Age
Typically, when a new trend becomes mainstream, the U.S. government steps in and regulates the activity. Surprisingly, even though most Americans have a substantial amount of digital property or digital assets (such as email accounts, social media accounts and blogs), federal legislation of digital property does not exist yet.
In the past couple of years, at least 28 states have created laws that will protect people’s digital assets and give their family members the right to access and manage those accounts after the owner has died. Plus, The Uniform Law Commission created the Fiduciary Access to Digital Assets Act (Revised 2015), which is aimed to allow executors, trustees, or the person appointed by court (“conservator” or “fiduciary”) complete access to deceased’s digital assets. Although it’s not yet a nationwide law, it shows that there is some forward momentum and progress regarding this issue.
New Law Governing Digital Assets Went into Effect in Ohio in 2017
A new Ohio law, “HB 432, Revised Uniform Fiduciary Access to Digital Assets Act.” took effect on April 6, 2017. This law authorizes continued access or control over a deceased or incapacitated person’s electronic communication and “any other digital asset to which the individual has an interest.”
We want you to understand how this new law affects your rights. In general, you now have greater control over what happens to your digital assets after death.
This bill, also known as the Omnibus Probate Bill, made significant changes to estate administration in Ohio, such as adoption of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Under the original Uniform Fiduciary Access to Digital Assets Act (UFADAA), fiduciaries were authorized to manage their clients’ digital property, such as computer files, web domains and virtual currency, but it restricted a fiduciary’s access to the substantive content of electronic communications, such as email messages, text messages and social media accounts. HB432 and RUFADAA extended the reach of a fiduciary to include the power to manage a person’s substantive digital assets.
HB432 does not grant this power across the board; rather, it outlines the means through which an individual may grant such power to his or her fiduciary. These means include the following:
- Online tools offered by a custodian or possessor of digital assets and through which an individual can select how his or her digital assets will be treated
- A will, trust or power of attorney
- The custodian’s terms of service
These means are listed in order of descending authority. In other words, an online tool supersedes the terms of a will or trust, which supersedes the custodian’s terms of service, which supersedes the default RUFADAA rules.
Store All Your Important Documents in One Online Location
Historically, a person’s estate consisted of a will, trusts, life insurance policies and property, including financial accounts. In the days of paper documentation, these important documents, along those that named a Power of Attorney, were stored in a folder or filing cabinet in someone’s office, safety-deposit box at the bank or desk drawer, where the family would be able to easily find them after the person died. Family members also relied on paper statements that arrived in the mail, such as bank statements, bills and account updates.
Thanks to advances in technology, now we can digitize all documents related to our estates and store them online. There are many benefits to creating a digital estate plan. Even though many people manage their finances, business paperwork and personal lives online, very few have organized or centralized those accounts in one location. This can make managing and distributing these assets difficult after the person has died. It can also cause confusion for family members, denial of access and even an inability to locate the accounts.
Creating a digital estate plan, with all your important documents located in one place, will help your family members, attorney, financial advisor and others do the following:
- Locate and access your online accounts
- Determine if your digital property has any financial value that needs to be reported and perhaps submitted to probate
- Distribute or transfer any digital assets to the appropriate parties
- Avoid online identity theft
Raymond James offers the ‘Vault’ as part of the Client Access system. There is no cost to use this and it has virtually unlimited storage. As with all estate planning we recommend you work with an attorney specializing in this area.
We will be having an Estate Planning Town Hall meeting on May 14, 2019 at 7 pm at the Four Points in Eastlake. Please contact our office for reservations or details. As always, please reach out to us with questions on estate planning or whenever we can otherwise be of service to you, your family or friends.
Randy Carver, RJFS registered principal and President of CFS., Randy.firstname.lastname@example.org or (440) 974-0808.
The information contained in this blog does not purport to be a complete description of the securities, markets, tax rules or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk, and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.