In today’s world we realize, hopefully sooner rather than later, that we must address estate planning and in doing so comprehensively we strive to “cover all bases”. By this we mean, among all other issues (a) did we address the issue of your “digital assets” and (b) did we appoint a Funeral Representative in addition to an Executor? Think about usernames and passwords, bank accounts, credit cards, email and auto payments established to pay bills? How about information regarding a domain name used for a website?
Historically, estate planners have addressed assets such as personal property (jewelry), securities, other investments as well as real estate; however, in our digital world the estate planner now must also address this “new” issue referred to as “digital assets” when creating a comprehensive estate plan. Sometimes the biggest problem in the administration of an estate is: locating the digital assets, and then once the digital assets are located, what is the password? Locating the digital asset(s) is just the beginning, there are currently federal and some state statutes that create a criminal offense if a person, other than the account owner, accesses the accounts after an individual dies. This is a very active area of the law and fortunately New Jersey has addressed this issue by a state statute referred to as the “Uniform Fiduciary Access to Digital Assets Act”, however, on too many occasions the “Terms of Service” of an entity blocks the orderly dissemination of the appropriate information to the inquiring party which can lead to the courtroom and many unnecessary legal bills. Simply put, Federal Law gave the service provider the right not to release information to anyone other than the account owner who now may be deceased. The entities that refuses to release digital asset(s) information usually put the account into a “memorial state” or some permanently delete the account upon notification of a death.
Digital assets should not be merely disclosed in your will because your “usernames names and passwords” when disclosed in a will ultimately become public documents when the will is probated by being submitted to the Surrogate Court. Therefore, the significance of even disclosing usernames and passwords in a will is useless because the information will become public upon probate. However, an individual must indicate in a secure and private procedure in the estate planning process : (a) what your intention is regarding digital assets, (b) where such information is located, (c) who is to receive information addressing digital assets and (d) instruction as to what you wish to happen to such digital assets.
The intent of this article is to be sure you are aware that you must address the issue of Digital Assets. Digital assets are not going to disappear, in my opinion, they will become “the norm” in our lives going forward and the lack of addressing access to this information could lead to very expensive dire consequences and unnecessary legal fees. The conflict between federal and state statutes can be addressed with some prudent estate planning while the problems among the state statutes and the Terms of Service issue are being corrected, we will have clarity in this area “someday” but that does not mean you can postpone addressing this issue to “someday”, this issue requires your attention at the present time.
I recommend you contact my office to schedule a consultation to address digital assets, among others issues, in your estate planning.