Answer the following questions. Do your clients have online trading accounts? Are they signed up for paperless statements from any financial institutions? If so, they have digital assets, and they will need a plan for how their loved ones will deal with those assets when they’re gone, just like they have for the rest of their estate. Forget social media accounts or even email accounts – digital assets include so much more, now that many people do at least some of their banking, investing, loan-paying and other financial activities online.
Why is it so important to plan for digital assets? Think for a moment about how much you actually do online yourself. Do you bank online? Do you have credit card points or airline miles? Do you have an email address, or two, or more? The number of online accounts one can accumulate is almost shocking, but some of those have crucial information for families to have when their loved ones pass, such as access to an online loan or credit card account that still needs to be paid. Your younger clients have practically their whole lives online – all of their photos, music, etc. plus more traditional assets.
Half the battle in dealing with digital assets is even knowing what accounts your clients might have. What banks do they have online accounts with? What are all their email addresses? Then there’s all the usernames and passwords for all those accounts. Passwords are particularly important to keep track of since most companies strictly adhere to privacy policies which prohibit releasing passwords to anyone but the account holders themselves.
The next step is deciding who should be in charge of taking care of all those digital assets when the time comes. Does your client want their power of attorney to also take this on? Or would they prefer to appoint someone specifically to deal with these assets? One way or another, they will need to appoint a digital executor to be in charge of those numerous accounts who may be more tech-savvy, someone to obtain the accounts and pay off any debts.
Do you or your clients live in Delaware? If so, you’re in luck. The First State’s legislature just passed the first law granting heirs, executors and trustees sweeping access to digital assets. It specifically authorizes fiduciaries to have access to digital assets and accounts for citizens who die or become incapacitated. And, it explicitly guides implementers of the law to construe it liberally, especially when an individual has made their wishes known in writing. Everyone else will have to make their own provisions. That’s where you come in. You can guide your clients through compiling a list of all their digital assets and any passwords that go with them, and make note of who they want as digital executor along with their power of attorney.
To put it simply, if your client receives a paperless statement for any financial account, s/he has a digital asset. Why does that matter? Because their trustee or executor will need access to their email to get their account information and at the moment, no one can grant them that access (unless they’re in Delaware) except the account holder.
Need more information about digital assets? Email us for a digital asset diagram and a digital asset list template for your clients. Also, if you already have a procedure for dealing with your clients’ digital assets, let us know.
Randi J. Siegel, MBA, is the President of DocuBank (docubank.com), which ensures that the emergency information and healthcare directives of its 200,000+ enrollees are available 24/7/365 through the largest advance directives registry in the U.S., as well as access to an online safe for storage of digital assets and other vital documents. Working with estate planning professionals since 1997, Randi frequently speaks at national estate planning conferences and has appeared on radio and television as an authority on registries. A member of the Philadelphia Estate Planning Council, the International Society of Advance Care Planning and the Coalition to Transform Advanced Care, Randi is active in health education and public engagement related to advance care planning/advance directives. She serves as Pennsylvania liaison to the National Healthcare Decisions Day initiative and as a board member of the Center for Advocacy for the Rights and Interests of the Elderly. Randi is an ongoing contributor to the Academy blog.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
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