Thanks to the Internet, most companies provide you with the option to receive electronic statements, set up auto payments or pay your bills online. Many businesses are in favor of these methods and support online account management and paperless billing. It’s less expensive, more convenient and more environmentally friendly for them to send out bills via email than it is to mail them to each customer.
One issue with this type of account management is what will happen with these accounts when you die or become incapacitated? Without physical evidence of your bills or statements for your accounts, how will your successor trustee or family members be able to manage your bills or finances when the time comes? How will they know about bills due or money owed if they are unable to access your email or online accounts?
Online profiles with personal information, pictures and contacts are increasingly used by all of us. These include Facebook, LinkedIn, Twitter and Instagram. How are these accounts or digital assets handled upon your death or incapacity?
Your estate plan should be designed to make the administration process as easy as possible for your loved ones. This includes making it convenient to manage your assets upon your incapacity or death and saving them the hassle of sorting through your paperwork to collect assets and pay your bills. Without specific provisions in your estate plan and careful planning, access to this critical information can become difficult for your family or loved ones.
Federal law regulating access to digital property does not yet exist. At this time, 29 states have established legislation or laws to protect digital assets and to provide a deceased person’s family procedures and rights to manage those accounts and assets after death.
On Jan. 1, 2017, the Uniform Fiduciary Access to Digital Assets Act (the “Act”) became effective in California. California is one of the many states in the U.S. to adopt this law, which establishes a process for allowing your executor, trustee, power of attorney or court-appointed conservator to access your online accounts after your death. This act also allows you to designate some (or portions) of your account as “off-limits” after your death. This act has been added to the California Probate Code sections 870 – 884. Other states have established separate laws which differ from the Act. The states that have adopted either the Act or other similar laws or legislation include Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey (in progress as of May 1, 2017) New York, North Carolina, Oklahoma, Oregon, Pennsylvania (in progress as of Nov. 19, 2015), Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Washington, Wisconsin and Wyoming. As laws continue to change this list may change from time to time. Please check with your local legislative branch to determine if your state has enacted this Act.
Your Durable Power of Attorney and your trust instruments should include provisions consistent with California Probate Code sections 870 – 884 or the versions, if any, in effect for your state. These sections provide for naming a fiduciary to act on your behalf for these critical accounts, assets and profiles.
In today’s digital world, most of our financial transactions and communications occur online. Photographs, websites and Internet profiles are now almost expected for all of us. You can do almost anything online, and many people choose to do so. These accounts have limited access with protected passwords, which can create problems when the account holder dies because no one has access to their passwords. Planning now can save a lot of heartache later.
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