UPDATE: PLANNING FOR YOUR DIGITAL ESTATE

In the beginning of the year, we posted an article titled “Planning for Your Digital Estate” which detailed what could be done to incorporate your digital assets into your estate plan in the absence of a digital asset law in Pennsylvania. An update to the article is warranted following Pennsylvania’s recent passage of the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). This update readdresses the questions posed under our previous article, and some new ones, considering the passage of RUFADAA.

I. What is a digital asset?

RUFADAA defines a digital asset as an “electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record.” On its face, this broad definition could apply to most anything that exists only in a digital format, such as emails, digital photographs, cryptocurrency, social media profiles and other online accounts.

Therefore, the sentiment from the previous article remains under RUFADAA’s definition of digital assets: to properly plan you must be able to identify what digital assets you own, how each is stored and accessed, the value (monetary or sentimental) of each asset, and how you would like the asset to be handled upon your death or incapacity.

II. What is the current state of the law regarding digital assets?

RUFADAA was approved and signed into law on July 23, 2020. While it does not become effective until January 19, 2021, with the framework firmly in place we can implement its provisions into your estate planning documents now.

The crux of RUFADAA is that it provides a mechanism for the management and disposition of digital assets in the same way one might plan for their tangible personal property by providing instructions in a will, trust and/or power of attorney. This includes directing who should be able to access, control and dispose of your digital assets during your lifetime and after your death, and instructing them on whether to preserve, distribute or permanently delete your digital assets.

RUFADAA also provides a hierarchy for digital asset custodians – think Google and Apple – to follow. If a custodian offers an online tool, explained below, the custodian should follow the online tool even if it conflicts with your estate planning documents. In the absence of an online tool or if the online tool has not been utilized, the custodian should follow the direction in your documents.  Finally, in the absence of an online tool and a direction in your documents, the statutory default of RUFADAA applies.  The default is that the custodian must provide your executor, trustee or agent a catalog of your electronic communications (not the contents) or digital assets in its possession.

Online tools are useful mechanisms for planning your digital estate; you could think of them like a beneficiary designation for your digital assets but with additional options.  Online tools vary from custodian to custodian and not all have them, although they likely will become more common.

Many online tools allow you to choose whether to preserve and provide access to your digital assets to a named beneficiary or delete your digital assets after some period of account inactivity. Others offer more customized options such as setting up automatic replies to those who contact your account after it becomes inactive. A detailed account of Google’s online tool can be found in the previous article.

Finally, it should be noted that not all digital assets are transferrable. In fact, you may not actually own what you think of as your digital assets. For example, music you have “purchased” and stored via iTunes is not really yours:  you only have a lifetime license to use the music. RUFADAA does not create rights in digital assets that go beyond the rights granted to you in any contract (a/k/a user agreement or terms of service) you signed with the custodian.

III. Do I Need This?

Considering the infancy of RUFADAA in Pennsylvania, your current estate planning documents almost certainly do not specifically address digital assets. But you may be thinking to yourself, “I am not exactly a technology buff, so do I really need this in my estate plan?”

Even if you have a smaller online footprint, you still almost certainly have digital assets which should be discussed with your estate planning attorney. Below are some different examples of how implementing RUFADAA into your estate plan can be beneficial.

a. Control of Where Your Digital Assets Go.

Custodians have been notoriously unwilling to budge on granting access to the digital assets of deceased persons, even in the face of heartfelt requests from grieving family members. If you do not implement RUFADAA into your estate planning documents and you do not grant access to your digital assets and online accounts before your incapacity or death, it is likely too late. With RUFADAA you can create a plan for your digital assets, including directing who gets access to your carefully curated digital photo albums and instructing that your iCloud contents be deleted.

b. Mailbox vs Inbox.

A person’s mail can reveal a lot about them. In fact, to create an inventory of a decedent’s estate, lawyers often suggest executors of estates start by monitoring the mail of the decedent for bills and statements.

Today, with the popularity of paperless billing and online banking, it is foreseeable that a person may receive mostly junk mail in their mailbox. Think about how many different accounts you have that no one would know about unless they had access to your email account. Now ask yourself, is access to your email inbox as important as access to your actual mailbox? If so, adding simple provisions to your estate planning documents can make your mailbox and inbox equally accessible to those who may need it in the event of your death or incapacity.

c. Maintaining Privacy and Security.

As helpful as access to your emails and other online accounts may be, privacy and/or the security of your digital assets may be your focus. RUFADAA not only provides you the power to grant access to your digital assets, but also to restrict access and direct that your accounts (all or just those you specify) be deleted. Without such directions you will be at the mercy of the default provisions of RUFADAA and the contracts with your custodians.

Conclusion.

If you have any questions about how to integrate your digital assets into your estate plan, please contact our office to make an appointment with one of our estate planning attorneys today.