With little fanfare, the Alabama legislature passed the Alabama version of the Revised Uniform Fiduciary Access to Digital Assets Act. Most every Last Will and long-term Power of Attorney and Living Trust going forward will need to have express language authorizing the Executor or Attorney-in-Fact (under a Power of Attorney) or Trustee to access their Facebook, Instragram, online bank accounts, smart phones and other online accounts. This Fidelity article highlights what’s at stake:
You may have planned for your loved ones to eventually inherit your house, the Steinway grand piano, your Dad’s 88-year-old Swiss watch, or other family heirlooms, but with life increasingly being lived online, you may be overlooking an increasingly important kind of property— digital assets.
If your estate plan doesn’t account for digital assets properly, your heirs may not have access to them. Family photos and videos could be lost forever, social media accounts could stay up long after you’ve passed, and your heirs may not receive all the money that you’d like to see come their way.
Estate planning attorney James Lamm, with Gray Plant Mooty in Minneapolis, Minn., has seen such problems firsthand. He first noticed the importance of digital assets in estate planning a few years ago. “A client had passed away, and there were no paper records,” says Lamm, a nationally known expert and author of the Digital Passing blog. “All of the client’s financial information was stored on computers and protected by passwords. This really opened our eyes. We’re dealing with a new world.”
It has become the norm to store financial records in smartphones, computers, or the cloud, and to conduct financial transactions electronically. Most people also own a trove of digital assets, which can include anything from domain names to electronically stored photos and videos to email and social media accounts.
The upshot: Accounting for digital property in your estate plan has become essential. Fortunately, it’s relatively simple to do.
With the passage of this new law, Alabama has made made the process for avoiding these issues much more easy. The act somewhat requires express action on the part of those with existing (and to be drafted) Last Wills, Durable Powers of Attorney, and Trust Regardless: Its still important to keep an updated list of valuable and significant digital assets, including accounts, user names, passwords, and so on. This list can be written, stored electronically, or be a hybrid of the two. Per Kiplinger,
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.
This is equally advisible for your adult children to have given you access to these digital assets; I am especially thinking of your children at college or not married. Here is Financial Advisor discussing the need for a power of attorney for digital assets:
“It’s not about money; it is about the administrative aspects of a life,” Edelman says. That includes the administration of young people’s personal items—things they are likely to have strong sentimental attachments to.
It also means administering young people’s virtual lives, he says.
“Millennials and Generation X lead their lives online.”
That means a parent or another person needs to know how to preserve the pictures that are posted on social media accounts and any writing the person may have done. For that, estate planners need to know not only passwords but the answers to security questions.
Social media accounts can be saved by arranging ahead of time, Edelman says.
“If the young adult feels uncomfortable revealing information to a parent, the information can be given to the attorney who does the estate planning with the condition it be opened upon death,” he adds.