When you think about estate planning, you undoubtedly think about the need to protect your assets and include plans for their distribution within your estate plan. You may even believe you have already done exactly that within your current plan; however, you may have forgotten some important assets – your digital assets. In today’s electronic age, including your digital assets in your estate plan is often necessary to ensure that all your assets are protected and to make it easier for your Executor to administer your estate.
The Age of Electronics
There is no denying that we now live in an age of electronics. No matter how old you are, you have likely succumbed – at least in part – to the use of electronics. The average person now uses email and video conferencing for business as well as personal communications. Almost everyone has at least one social media account and if you are under the age of about 30 you probably spend a good portion of your life on social media. You may also access your financial accounts online and pay bills using electronic fund transfers. The odds are even good that many of your most important documents and photos are now stored electronically. In short, the age of electronics is here to stay and adjusting your estate plan accordingly is now imperative to the ultimate success of your plan.
What Needs to Be Protected?
If you take a few minutes to think about an average day, you will probably realize just how frequently you access online accounts. Every one of those accounts, and the information stored in them, should be included in your estate plan. If you own a website, blog, or any digital intellectual property, that must also be protected in your estate plan. Basically, anything that is stored or accessed electronically needs to be considered when creating or updating your estate plan. Even if you don’t consider the accounts to be valuable assets themselves, your Executor will likely need to access them during the probate of your estate which can be a significant problem if you did not plan for that need within your estate plan.
California’s Fiduciary Access Law
California’s “Revised Uniform Fiduciary Access to Digital Assets Act,” which took effect on January 1, 2018, clarifies how a resident can allow, or prohibit, access to digital assets such as social media accounts, email accounts, and other online accounts that contain digital files. Like many similar laws, the California law defers to the service provider to some extent. According to the Act, you may allow or prohibit your Executor (or Personal Representative or Trustee ) to have access to these accounts in your Will, trust, or a power of attorney. If, however, the service provider offers an online tool that effectively offers the same option to allow or prohibit access, any direction you provide within that online tool will override a contrary provision within your estate planning documents. Moreover, the service provider is not required to make a partial disclosure of a deceased user’s account if doing so “would impose an undue burden” on the provider nor is the provider required to disclose any deleted assets. Of even more importance, a service provider is not required to share passwords or decrypt protected devices.
While the Act does allow for access to digital assets by an Executor, it also attempts to protect a deceased user’s data from misuse. Your Executor, or anyone else authorized to manage digital assets, owes a continued duty of care, loyalty, and confidentiality to the decedent according to provisions in the Act.
The California Act in Practice
Google offers a good example of how the California law works in real life. Even if you use a different email provider, you are undoubtedly familiar with Google. Google offers account holders the opportunity to use its “Inactive Account Manager.” Inactive Account Manager lets a user decide what happens to their account if the account becomes dormant for a specified period of time. After your account has been inactive for six months, for example, you can designate someone to whom you grant access to the account. The California Act specifies that the designation you make within your Google account overrides anything to the contrary in your Will. At the same time, the Act allows you to effectively make the same designation within your Will, trust, or POA for digital accounts that don’t offer the option.
To ensure that your Executor can access important electronic accounts, make sure you include those accounts in your plan.
Contact Sacramento Estate Planning Lawyers
Please download our FREE estate planning checklist. If you have additional questions or concerns regarding your digital assets, contact us at the Northern California Center for Estate Planning & Elder Law today by calling (916)-437-3500 or by filling out our online contact form.