The one thing you’re overlooking in your client’s estate planning needs

• by secure_financial
• Posted on 11 December, 2019

Many individuals own a variety of digital assets which can include anything from domain names, stored photographs, online stores, music, PayPal accounts, along with all the social media accounts. 

Your clients may have planned for loved ones to eventually inherit a house or an antique car, or other family heirlooms.  But as your client’s lives become a life with an increased online presence you may be overlooking a very important type of asset.  Digital assets.

If your client’s estate plan isn’t accounting for digital assets properly, their heirs may not have access to them. It’s become the norm to store financial records in computers, smartphones, or in the cloud.  Accounting for digital property in an estate plan has become essential and relatively it’s simple to do.

From a legal point of view, digital property is like other types of property that can be transferred to heirs through estate plans. Certain obstacles can be faced by families when a loved one passes and they try to gain access to the deceased’s vital personal information online as laws and practices are still being defined by companies such as Facebook, Google, eBay, etc.

1. Passwords. If family members don’t know passwords, they may not be able to access information or property stored in a smartphone, computer, online accounts, or the cloud.
2. Criminal laws. There are laws both at the state and federal levels prohibiting unauthorized access to computer systems and private personal data. These laws serve to protect consumers against fraud and identity theft, but they also may create obstacles for family members trying to gain access to the digital assets and information of a deceased loved one.
3. Data encryption. Stored data may be encrypted, adding another layer of protection on top of your passwords. Encryption can scramble data in a location—in a single file, on a device or in the cloud—so thoroughly that it is practically impossible for anyone without the proper passcode to unscramble it, such as a passcode on a smartphone.
4. Data Privacy laws. Data privacy laws prohibit online account service providers from turning over the contents of your electronic communications to anyone other than the owner without the owner’s lawful consent. Google and Facebook may lock up content unless you give permission for others to access it, leaving heirs unable to gain access to photos, email messages, or other information stored in the cloud.

Have your clients create an estate plan that is tech-savvy.

1. Have clients create a list of their digital assets that include important accounts and passwords. This would include social media accounts, email, PayPal, credit card rewards, eBay, GoDaddy, etc.
2. Read the agreements. Some music that is purchased online may not be transferable such as iTunes.
3. Provide authorized consent in legal documents. Work with an estate attorney to update the client’s wills, power of attorney, and any revocable trusts. The estate attorney will provide language giving lawful consent for providers to disclose the contents of electronic documents and communications to appropriate people.  We can help craft documents for fiduciaries to bypass, reset or recover passwords.

Since digital assets are relatively new the laws are constantly being updated, this is where partnering with an estate attorney to help your clients is helpful.  Call us today at 248-435-0400 to get started.