Estate Planning in the Digital World
In the age of COVID-19, it is more necessary than ever to be prepared. Focusing on the health of your estate plan is essential and requires careful consideration. Taking an inventory of all the physical possessions you will leave behind is a great first step. However, the digital age we live in requires considering much more than our tangible possessions when it comes to estate planning.
When people think of "digital assets," they may think of Bitcoin or other cryptocurrencies. Digital currencies have been garnering media attention since their vast proliferation began in 2008. However, they are not the only digital assets one must consider. Digital assets may also include: 1) electronic communications, such as business emails: 2) rewards programs and financial accounts, such as PayPal or Robinhood; 3) digital photographs, videos and other personal files; and, 4) copyrights and trademarks, all of which can be stored online or in the cloud. It is important to discuss the disposition of these digital assets with your attorney when drafting your estate plan in order for your heirs to be able to gain access to them. given in a Will or Power of Attorney. now digital assets can be transferred through the same legal instruments. In your estate plan, you should begin by taking a careful inventory of your physical and digital assets and their estimated value. Some of these assets, such as personal photo albums, may not hold monetary value but instead hold personal value. Other assets, like an online brokerage account, may hold a great deal of monetary value. Be sure to include both. Every digital asset you have should be accounted for in your estate plan.
In July 2020, Pennsylvania Governor Tom Wolf signed The Revised Uniform Fiduciary Access to Digital Assets Act (the "Act"). The Act governs the process of accessing a person's online assets and generally provides that the powers provided to Personal Representatives. Trustees, Agents or other fiduciaries include the power to manage digital assets. The original creator of a given digital asset may consent to the disclosure of their digital content, which will override general terms- of-service agreements that would typically prohibit access to such accounts and assets by others.
Just as personal property can be transferred through instructions given in a Will or Power of Attorney, now digital assets can be transferred through the same legal instruments. In your estate plan, you should begin by taking a careful inventory of your physical and digital assets and their estimated value. Some of these assets such as personal photo albums, may not hold monetary value but instead hold personal value. Other assets, like an online brokerage account, may hold a great deal of monetary value. Be sure to include both. Every digital asset you have should be accounted for in your estate plan.
The most overlooked digital aspect of your estate plan might be passwords. Until recently, standard legal documents, which appoint a Personal Representative upon the death of an individual, gave access to certain financial accounts without a password. However, this is no longer always the case. When it comes to digital currencies, having the private key that offers access to your account is crucial. A private key is unique and only given to the account holder. There are no backups. If you do not put that private key information into your estate plan, all of your digital currencies will be lost.
You also will need to determine how you want the Personal Representative of your estate to handle the assets. Credit card rewards, for instance, may go to your spouse. Maybe you have an online business that you want your children to inherit and continue to operate or, perhaps, you have cryptocurrencies that you want to pass to your grandchildren. Make sure you are specific and discuss your final wishes at length with your attorney.
When discussing your estate plan with your attorney, be sure to include your digital assets in the conversation and be as specific as possible. If you have any questions, please contact the Trusts & Estates Practice Group at MacDonald Illig at 814/870-7600 or email info@mijb.com.
Article featured in the Manufacturer and Business Associations' February 2021 Business Magazine
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