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What Are Digital Assets?
Digital assets can account for a wide variety of online properties. It’s easy to forget how difficult it can be to access these assets and accounts for our loved ones after we are gone, leaving them scrambling for passwords or having conflicts with the asset owners or companies.
By ensuring that your loved ones can access these digital assets, you can provide a smooth transition when needed, allowing your loved ones to avoid unnecessary frustrations.
Digital assets can include;
- Software licenses
- Domain websites/names
- Cloud accounts for storage, such as Google Dropbox and more
- Social media accounts such as Twitter, Instagram, Facebook, and more
- Investment portfolios, digital bank accounts, payment services, and more
- Digital streaming services, videos, photos, media libraries, and e-books
What is RUFADAA and How Does it Help Me?
In 2016, California passed the Revised Uniform Fiduciary Access to Digital Assets Act or RUFADAA, making it possible for Californians to stipulate how digital assets are to be handled or accessed should they become incapacitated or pass away.
Similar to how a will or trust can be used to designate a person to oversee your assets and how they are managed after your passing, the act allows you to nominate a person or fiduciary responsible for overseeing your digital assets. This fiduciary is required to act in compliance with the RUFADAA, allowing for security and privacy against improper disclosure to other parties.
Read on to learn more about how this is achieved.
Take Inventory of All Digital Assets
It’s best practice to monitor your activity for several months to ensure you have covered all aspects of your digital assets, even those you may not use consistently.
Creating a spreadsheet is a great way to organize the digital assets, their login and passwords, and what the assets are used for.
As with all estate documents, ensure you regularly review this spreadsheet to encompass all current digital assets or those that have changed over time.
Store this spreadsheet securely and ensure that the designated fiduciary knows how to access it when they need to. This security can be done through a digital document or a hard copy of the document that is secured in a safe.
Work With an Experienced Estate Planning Attorney
Once you have a complete inventory of your digital assets, work with your estate attorney to ensure you incorporate a fiduciary designation within your estate plan. Creating a trust, Power of Attorney documents, a will, or amending those you have in place can ensure that your fiduciary can exercise their powers when necessary.
It’s important to note that, as with all estate planning management designations, nominating a successor fiduciary is something to consider.
Choose a fiduciary who is well-versed in digital assets, can navigate all platforms as necessary, and is, most importantly, a thoroughly trusted individual.
Best Practices With Digital Assets
It’s important to note that not all digital assets are the same, including how they are accessed, the transfer options, and more. For example, a sentimental digital asset such as a file of pictures or videos may be up for debate as to who receives that asset upon your death, as opposed to an asset that may have monetary value.
Depending on the nature of the asset, there may be multiple people you wish to designate as the fiduciary.
Print off all user terms on each platform you are granting access to. Research whether or not you can include a “beneficiary” of the digital asset, as more and more platforms are allowing this, similar to banks or other properties, to help with the transfer process.
Consider that there may be a two-step verification for passwords, how the fiduciary can get around that, whether they need access to your phone or email to receive a confirmation and more.
Communicate your expectations to all relevant parties. Those entrusted to handle your affairs must know what you wish to occur and how to achieve that. Fewer questions during an emotionally stressful time can help alleviate unnecessary conflicts for all involved.
The fiduciary may need to access past tax documents or statements to carry out their duties as well effectively. For example, suppose they are to determine the monetary value of a digital asset so they can adequately distribute it as you stipulated to your heirs. In that case, they will have to assess the value of each asset. This process can be challenging to achieve, but with your guidance and past documentation, the asset’s value can be estimated for disbursement purposes. Ensure the fiduciary has access to all necessary documents, past and present.
A Longstanding Partner and Advocate
While working with an estate planning attorney was once thought of as only a necessity or a luxury to the wealthy, it’s becoming increasingly apparent that even those of us with the most simple or seemingly small estates can benefit significantly from working closely with an experienced estate planning attorney.
With years of experience, our firm takes a different approach with our clients. We aren’t focusing on one aspect of their estate or other needs; we create a longstanding working relationship with them and their loved ones to ensure all necessary steps are taken.
Call our office at 909-675-1545 to schedule your free initial consultation. Learn more about why our clients have entrusted us to be their tireless legal advocates for years and continue to refer us to those they respect and care for.
