Digital Assets Need to Be Protected In Estate Plans

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, Linked In and similar platforms. Taking down profiles, preserving photos and gaining access to URLs are all part of managing a digital footprint that needs to be planned for as part of an estate plan.

There are a number of laws that could impact a user’s digital estate during life and death. Depending upon the asset and how it is used, determines what happens to it after the owner dies. Fiduciary access laws outline what the executor or attorney is allowed to do with digital assets, and the law varies from one country to another. In the US, almost all states have adopted a version of RUFADAA, (Revised Uniform Fiduciary Access to Digital Assets Act) the law created by the U.S. Uniform Law Commission. However, all digital assets are also subject to the Terms of Service Agreement (TOSAs) that we click on when signing up for a new app or software. The TOSA may not permit anyone but the account owner to gain access to the account or the assets in the account.

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. Here are some of the questions to consider:

  • What will happen to digital assets with financial value, like loyalty points, travel rewards, cryptocurrency, gaming tokens or the digital assets of a business?
  • Who will be able to get digital assets with sentimental value, like photos, videos and social media accounts?
  • What about privacy and cybersecurity concerns, and identity theft?

What will happen to your digital assets? Facebook and Google offer Legacy Contact and Inactive Manager, online tools they provide to designate third-party account access. Some, but not many, other online platforms have similar tools in place. The best way, for now, may be to make a list of all of your digital accounts and look through them for death or incapacity instructions. It may not be a complete solution, but it’s at least a start. With a living trust, these assets can be assigned to the trust for your trustee to have access to them. contact my office for more inforamtion.

Reference: Bloomberg Tax (April 10, 2020) “Supporting Your Clients’ Digital Legacy”

 

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COVID-19 UPDATE: Is Your Estate Plan COVID19-Ready? Three Things to Review Now

Even if you have done comprehensive estate planning with the guidance of a qualified attorney, you may want to re-evaluate certain elements of your plan now, through the lens of the coronavirus pandemic.

Why? There are two uniquely challenging aspects of this pandemic that your current plan may not adequately address.

  1. Medical treatment for severe cases of COVID19 frequently involves intubation and ventilator therapy to combat respiratory failure … and
  2. Quarantine and isolation orders blocking hospital visitors create some communication barriers between patients, doctors and family members.

How might these unique challenges impact your estate plan?

Living Wills. If your living will contains a blanket prohibition on intubation, you may want to reconsider that decision.

Durable Powers of Attorney (DPOA). Given the communication difficulties that may arise when a patient is hospitalized during this pandemic, you may want to revisit the terms of your DPOA to make it easier for your agent to act on your behalf.

Health Care Power of Attorney or Proxy. A health care POA or proxy allows you to appoint someone else to act as your agent for medical decisions. Under normal circumstances, this person would likely confer with your attending physicians in person and again, these in-person communications may be difficult right now. You want to add language to expressly authorize electronic communication with your agent.

A qualified estate planning attorney, who focuses exclusively in this area of the law, can advise you on whether your current plans accurately represent your wishes during this uniquely challenging time. Our office is fully open during this time so you can call to schedule an in person consultation or review or to do it virtually by Zoom.

Resource: ElderLawAnswers, Three Changes You May Want to Make to Your Estate Plan Now Due to the Pandemic, April 30, 2020

 

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COVID-19 UPDATE: Estate Planning in the Time of Coronavirus

These can be scary times … and thinking about getting sick or not being able to make decisions for yourself just adds to the fear. But a strong estate plan can ease those fears when you’re confident that the burden of making your health and financial decisions will never fall on unprepared family members.

Isn’t a Will Enough?

Though most people think a will is an estate plan, you may be surprised to learn that a will does not appoint nor allow someone else to do your banking or make your medical decisions if you are quarantined at home, admitted to the hospital, or become incapacitated. A strong estate plan addresses these issues and more, including the protection and distribution of your assets.

During this pandemic, two of the most important decisions you will need to make are

  • Who will take care of my financial affairs if I can’t?
  • Who will make medical decisions for me if I can’t?

Neither of these decisions can be made – or enforced – with a will.

Financial Decisions

When you designate a financial power of attorney, you are giving someone else the authority to carry on your personal financial affairs and protect your property by acting on your behalf. This person will be able to pay your bills, write checks, make deposits, sell or purchase assets and sign tax returns … all things you may not be able to do for yourself if you are seriously ill or quarantined at home.

What happens if you don’t make this legal appointment? Most likely, your family members will have to petition the probate court to appoint a guardian … a time-consuming and expensive process that can be avoided with proper legal planning.

Medical Decisions

Similarly, you’ll want to give someone health care power of attorney, so they can make medical decisions on your behalf if you can’t do so yourself. Again, if you are over age 18 and have not made this legal designation, your family members could have to go to court to have a guardian appointed for you. Right now this will be more difficult because courts are temporarily closed.

These are important decisions, but they are just the beginning of a strong estate plan to protect yourself, your loved ones and your property. Meeting with a qualified estate planning attorney can ensure you are protected should the unthinkable happen. My office is currently open so you may call me with any questions. You can also call to make an appointment to meet in person or virtually through a Zoom meeting.

Stay healthy.

Resource: Huffpost, A Guide to Estate Planning During the Coronavirus Pandemic, April 8, 2020

 

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