The Role of Digital Assets in Your Estate Plan
Digital technology is a part of daily life for everyone, even those that did not grow up using it, or perhaps even contemplating its existence. In fact, digital technology is so pervasive in modern society that it is now an integral part of any comprehensive estate plan. If a person thinks about it, some of the most important aspects of life are now housed online – namely, financial and personal information, photographs, media such as movies, albums books. Likely every financial account a person owns is primarily, and in many cases exclusively, accessed online, including accounts for routine bills, i.e., utilities, credit card, mortgages and the like. All of the online accounts require log-in information to access the stored content, and if there is no pre-planning or provisions for ensuring this information is made available to family members and estate representatives after death or incapacitation, many difficulties are likely to follow. Well-crafted estate plans make it easy to take over a person’s affairs, including the management of assets. Florida has a specific law related to accessing digital property after death, and key components of this law, and how to implement it into an estate plan, will follow below.
Methods for Permitting Disclosure
Twenty-nine states currently have laws related to the access of digital assets by a designated person, and because of the growing recognition of the importance of digital accounts by state legislatures, some companies are creating tools for account holders to establish who may receive access to the account if death or incapacity makes them unable to do so. This is the first method authorized by Florida’s digital asset access law to legally enable a third-party to gain access to an online account. However, not all companies with an online presence have such tools built into their website, and it is possible this information could be compromised from the outside, which would understandably make some people reluctant to use this option. Alternatively, it is possible to designate a fiduciary (person acting in a position of trust) through a designation included within a power of attorney, will, trust or other estate planning document. In either case, the person granting the authority has the ability to set out precisely when and how much access a fiduciary would have. Thus, this designation is not an all or nothing choice. A person can arrange the access at a level he/she is comfortable granting.
Responsibilities of Fiduciary Receiving Access
Because of the personal and sensitive information a fiduciary is allowed to see and use in online accounts, the law imposes certain responsibilities on him/her to better ensure the authority is not abused. Failing to fulfill these responsibilities can open up a fiduciary to legal liability, but litigation is not the end-goal, so choosing the right person to assume this position is crucial. A fiduciary of digital assets must adhere to the following duties when managing these accounts:
- duty of care (treat the assets in a reasonable and prudent manner so as not to cause unnecessary harm);
- duty of loyalty (treat the assets with best interests of the account holder in mind); and
- duty of confidentiality (refrain from disclosing confidential information due to carelessness or with an intention to use the assets for personal gain).
Florida’s law contains many more important nuances beyond the areas covered in this post, and an experienced estate planning attorney should be consulted on the best method of handling this type of property.
Get Legal Advice
No one wants to leave their loved ones with a legal mess once they die, and executing the right estate plan can make this transition easier and ensure your wishes are followed. William Rambaum, P.A. specializes in helping seniors arrange their estate plans in order to effectively manage assets during life, and provide a legacy to the next generation. If you live in the Clearwater or Oldsmar areas, contact the office to schedule an appointment to learn more.