Barnes, Walker, Goethe, Perron, Shea & Robinson, PLLC

941-867-7818

Barnes, Walker, Goethe, Perron, Shea & Robinson, PLLC

941-867-7818

Barnes, Walker, Goethe, Perron, Shea & Robinson, PLLC

941-867-7818

Barnes, Walker, Goethe, Perron, Shea & Robinson, PLLC

941-867-7818

Barnes, Walker, Goethe, Perron, Shea & Robinson, PLLC

941-867-7818

3119 Manatee Avenue West | Bradenton, Florida 34205

Is Your Estate Plan Programmed for the Digital World?

August 2019

THE BARNES WALKER EDUCATIONAL SERIES
proudly presents:

Is Your Estate Plan Programmed for the Digital World?

By: M. Brandon Robinson, Esq.

Almost everyone of school age in the United States owns some form of digital assets, many of which have both sentimental and pecuniary value. Whether they are the pictures and text messages on a smartphone; digital documents, logos, websites and online stores for a business; or the online bank accounts, utilities accounts, shopping accounts, and online bill pay programs that a growing number of Americans are now using; addressing digital assets is now necessary for the majority of estate plans. In this article, I will discuss what digital assets are, how to best classify digital assets, and how to address digital assets as part of your overall estate plan.

A. What are Digital Assets?

Anything that is stored in electronic format is a digital asset. A hard drive, thumb drive, computer, iPod, and cellphone are all tangible items that can be devised through a Last Will and Testament like any other piece of tangible personal property. However, the pictures, movies, songs, text messages, computer programs, apps, and other digital media stored on those electronic devices, as well as anything stored in the cloud, are considered digital assets. Because of strict privacy laws, or the inherent encrypted nature of the asset itself, many digital assets require special authorization to access. If not properly planned for, these assets may be lost forever when you pass away. So that you may better address Digital Assets in your Estate Plan, I have found it helpful to classify digital assets into six general categories.

B. What are the Six Categories of Digital Assets?

The first category are those assets to which access may be necessary for your Personal Representative to administer your estate, such as email accounts, utility accounts, bank accounts, and social media accounts. Any recurring automatic payments will need to be examined and possibly stopped, utility accounts will need to be accessed and transferred, and online memberships to services such as Netflix will need to be canceled. The second category are those assets solely of sentimental value, and which you will likely want preserved, such as family photos and films stored on a computer hard drive, or online in a location such as Facebook or Instagram. The third category are digital products that have been purchased by you and/or that have inherent value, such as downloaded movies, songs, video games, and online website domain names. It is important to note that many of these types of assets have user agreements that govern their use and ownership. It is possible that you only purchased a license to use a particular product, such as is often the case with songs from iTunes and many downloaded software programs. The fourth category are assets that are themselves valuable, such as Bitcoin, other online currencies, PayPal accounts, credit card rewards accounts, and Apple Store accounts. The fifth category are assets capable of producing income, such as YouTube accounts, blogs, certain social media accounts, eBay, online stores, Twitch accounts, etc. The final category are those assets of a very personal nature that you may want deleted outright, such as the text messages on your cell phone, online browsing history, and personal papers and documents. As you can see, the list of potential digital assets can be quite extensive.

C. How to address Digital Assets as part of your Overall Estate Plan.

When planning for the disposition of Digital Assets, it is necessary that you understand the breadth of your digital footprint. The best way to accomplish this is by performing a two-phase digital audit. The primary audit should consist of the listing of every online account that you have, along with the username and password for each account, as well as the answers to any potential security questions prompted by forgotten user identification or passwords. The secondary audit would consist of a list of groups of digital assets, such as online photo albums, movies, etc., the location and identification of the device they are stored on or their location online, and any information required to obtain access to the asset. Additionally, you should research what estate planning tools particular online accounts and assets may have available, as many vendors and custodians of digital assets such as Google and Facebook now allow the account owner to designate an account beneficiary, much like a transfer-on-death account.

If you have multiple online accounts, you may want to consider using a password manager, such as LastPass, DashLane, or OneLogin for both estate planning and online security purposes. Many of these password managers will allow you to store your username and a very complicated, virtually uncrackable password for each of your online accounts in an encrypted format that is only accessible via a master password. Not only will a password manager help prevent you from becoming a victim of online hackers, it will also allow the Personal Representative of your estate to manage your online estate much easier via the use of single master password.

Lastly, all of your estate planning documents, including Durable Powers of Attorney, Wills, and Trusts, should be updated to include clauses that address digital assets. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been adopted, in some form, by a majority of the states. (A Fiduciary is the agent/attorney in fact under a Durable Power of Attorney, the Personal Representative of an Estate, the Trustee of a Trust, etc.) Florida has adopted the act as the Florida Fiduciary Access to Digital Assets Act, which became effective July 1, 2016, and has been codified as Florida Statutes Chapter 740. To better facilitate your fiduciary's access to your digital assets, however, you should not rely solely on the statute, but should specifically grant that authority to the fiduciary in your estate planning documents. It is also advisable to draft a separate written digital asset memorandum, often known as a Virtual Asset Instruction Letter or "VAIL," describing what is to be done with the various classes of digital assets owned by you, instructions for accessing those assets, and your wishes concerning the devise of those assets that are divisible, similar to a separate written memorandum concerning tangible personal property. While this document should be kept in a secure location along with your Trust or Last Will and Testament, under no circumstances should the Digital Asset Memorandum be made a part of your Will, as the Will becomes public record when entered into probate, and it would not be wise to have the your usernames and passwords out in the public domain. You might also consider naming a trusted person, perhaps one who is technologically savvy, to serve as your "digital personal representative." The Estate Personal Representative could then rely on or delegate the duties of accessing, devising, and disposing of your digital assets to this "digital personal representative."

D. Conclusion

A majority of the tasks that were once accomplished by mail or via telephone are now conducted online, and this trend does not seem to be slowing down. As more of our personal, professional, and business lives are conducted online, on the web, or in the cloud, digital assets will become an ever-growing percentage of a decedent’s overall estate. While this article is by no means a primer on estate planning for digital assets, I hope that it has stimulated some ideas, and that it will get you thinking about how best to address your online estate.

If you have any questions regarding Estate Planning for Digital Assets, please do not hesitate to call us at (941) 741-8224 or e-mail us at [email protected]. As always, we will answer your questions at no charge.

With warm regards,

M. Brandon Robinson, Esq.

Important Note: The information contained in the preceding Barnes Walker Educational Series article is summary in nature, does not cover all aspects of the law as it pertains to digital assets, and is sent for educational purposes only to you as a client or a member of the Realtor® Association of Sarasota and Manatee, Inc., of which we are a proud affiliate member. This article should not be considered as legal advice for your or a client’s situation, if any, nor is it intended as specific or detailed advice, as we do not have any information specific to your or a client’s circumstances. Further, the preceding article is not intended to be an all-inclusive discussion of digital assets, but a guide to the same, and there may be other matters not described in the article that may impact your or a client’s particular situation. Therefore, always seek legal advice regarding your or a client’s unique circumstances. Finally, this article is intended as a public service and is not a solicitation seeking legal employment of our firm by you or any clients.

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