Ronald Fatoullah & Associates - Elder Law

Estate Planning Considerations for Digital Assets

Estate-Planning-Considerations-for-Digital-Assets-DPLIC-114092564-270x202.jpgBy Ronald A. Fatoullah, Esq. and James A. E. Asquith, Esq.

{4:28 minutes to read} There is no universally accepted definition of digital assets, but they can be broadly defined as all digital property and electronic communications accessed by a computer, smartphone, tablet or server. Digital assets include information that is stored on a computer and content that is uploaded to a website. Companies that store an individual's digital assets are known as custodians. Examples of digital assets include email correspondence or information that has been uploaded onto websites like Facebook or Instagram.

Absent any statute to the contrary, access to digital assets is governed by the custodian's Terms of Service Agreement (TOSA). These agreements are typically very restrictive. For example, upon the death of an account owner, the right to access the account does not necessarily pass in accordance with the account owner's last will and testament or testamentary plan. Under the terms of many TOSAs, all photographs and other data uploaded to these accounts are the property of the custodian, not the individual account holder. Furthermore, many TOSAs prohibit third-party access to online accounts irrespective of whether the account owner is alive or dead. In an age when many people store all of their photographs, video footage, and personal correspondence online, the inability of a decedent's family to access this information can be extremely distressing.

The RUFADAA (Uniform Fiduciary Access to Digital Assets Act, Revised in 2015) is an attempt to address this problem. This Act, now adopted in 38 states including New York, recognizes the existence of digital property as a property right that can be managed, conserved and, in certain instances, accessed by third parties in much the same manner as other rights in real and tangible personal property. Thus, under the RUFADAA, if a person's estate planning documents (e.g. a will or a power of attorney) specifically grant a fiduciary the power to access a digital asset, the provisions of the TOSA will no longer prevail and the custodian must grant access. However, if a person takes no affirmative action to grant his fiduciary access to his digital assets, the provisions of the TOSA will determine whether the custodian will grant a fiduciary access to said assets.

The RUFADAA not only allows a person to grant or restrict his fiduciary's access to his digital assets through his estate planning documents but also allows him to grant or restrict such access through what is referred to as an "online tool." The Act defines an online tool to be an electronic service provided by a custodian that allows the user to provide directions for the disclosure or non-disclosure of digital assets to a third person. It should be noted that provisions made using the online tool will trump any provision made in an estate planning document or the terms of the TOSA.

When a person is considering his estate plan, it is important to give special consideration to digital assets. In addition to taking steps to properly plan for the disposition of digital assets upon death, it is also recommended that individuals make an inventory of their digital assets and store such an inventory along with their other important documents so that their fiduciary is aware of what digital assets they have. Such an inventory should include website addresses, passwords, and security questions and answers. A failure to properly plan may result in family members being unable to access photographs, correspondence, and other records of sentimental or possibly monetary value in the event of a person's incapacity or death. If you would like to learn more about how to properly plan for access to your digital assets in the event of your death or incapacity, it is advisable to speak with a knowledgeable estate planning attorney.

Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. James A. E. Asquith is an elder law attorney with the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a partner with Advice Period, a wealth management firm, and he can be reached at 424-256-7273.

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