(Source: StockInvestor): Bob Carlson
Estate planning laws and practices are catching up with the reality of today’s digital world. It is a slow process and still has a way to go, but big strides were made recently.
So it’s important that you review how your estate plan handles digital assets, and decide if an update is in order.
Firstly, there are several types of digital assets. One category involves social media accounts, such as Facebook, Twitter, Instagram and other social sites.
Another category involves personal accounts. This is a wide-ranging category that ranges from email accounts to financial accounts to various subscription websites. Automatic bill paying is included in this category.
The third category involves digital assets that generate income. For example, you may have a website that earns advertising revenue and perhaps other types of income. There are many other types of digital assets that can generate income, too.
Until recently, little was certain about how digital assets would be treated after the owner passed away.
Few states had laws covering the issues, and the companies involved with the digital assets each had their own policies. Some companies had no policies at all.
Many things changed when the Fiduciary Access to Digital Assets Act (FADA) was developed in 2015 by the National Conference of Commissioners on Uniform State Laws.
This is a group that drafts model legislation on different topics for state legislatures to consider. Estate planning matters are primarily state issues, so each state has to enact its own laws or allow its courts to develop them.
So far, 25 states have enacted some version of FADA. It was introduced, but not enacted yet, in 11 other states. The remaining states haven’t taken action.
Under FADA, a fiduciary (such as an estate executor, trustee, or an agent under a power of attorney) who already has the right to manage a person’s tangible property has the additional right to manage the person’s digital property.
But FADA has limits. Fiduciaries can automatically manage computer files, web domains and virtual currency only under FADA.
A fiduciary has limited access under FADA to manage email, text messages and social media accounts, unless the original user authorized it in the will, trust, power of attorney (POA), or other document.
In other words, you specifically have to grant your fiduciary the right to access and manage those accounts.
An advantage of this bifurcation is that you can name one person as executor to manage your tangible estate and the first category of digital accounts.
Then, using a limited POA or other document, you can name another person to manage the other digital assets.
For more details on FADA and updates on its status in each state, go online to www.uniformlaws.org and search: Fiduciary Access to Digital Assets Act.
Keep in mind that each state can adopt its own version of FADA, so your state’s version might differ from the model law.
In states that haven’t enacted FADA or a similar law, many issues are still up in the air.
Some commentators say that an estate executor who accesses a deceased person’s digital assets, even when permission is stated in the will or other document, violates federal anti-hacking law.
Also, digital service providers can ignore a will and rely on their own policies or attorneys’ advice.