Your online epitaph: Estate planning now includes digital presence

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Estate planning in a digital era encompasses more than just the material things a client possesses. These days, attorneys must consider their client’s digital existence as well as their temporal one, and estate planners and executors need to think about their clients’ digital accumulations and accounts such as air miles, loyalty points, bank points, cryptocurrency, and social media.

“It’s our electronic lives online,” said Sharon Hartung, a technology adviser and the author of “Your Digital Undertaker.” “We wouldn’t dismiss a bank account with thousands of dollars in it, so we really shouldn’t ignore our digital assets,” she said.

Most states have laws addressing what happens to a person’s digital assets, but there is a tension between access for heirs and online privacy. North Carolina has the Revised Uniform Fiduciary Access to Digital Assets Act (N.C.G.S. Ch. 36F), which outlines the authority of a fiduciary to access and obtain digital assets and the procedure for doing so.

“Many people simply accept terms of service and do not understand the impact that those terms will have upon death,” said Perry Coumas, an estate attorney with Orsbon & Fenninger in Charlotte. “Equally as important, it may provide an opportunity in planning to limit access to certain sensitive digital assets that a person many not want accessed at his or her death.” 

“This act only applies to fiduciaries, and not to beneficiaries or family members,” Coumas said. “Familiar relationship or status as a beneficiary under a testamentary document does not necessarily bestow access to digital assets. Therefore, it may become increasingly likely for an attorney representing a beneficiary to need to enforce retrieval and disclosure of digital assets by a fiduciary.”

Mike Polk of Belser & Belser in Columbia, who chairs the South Carolina Bar Association’s Technology Committee, advises estate planners to encourage their clients to occasionally check the terms of service for their most important digital products for potential changes.

But, importantly, executors shouldn’t pass along account passwords to heirs and beneficiaries without the decedent’s explicit permission, since this technically violates federal laws against online fraud. 

“All the same barriers that have been put in place to protect us from identity theft and cybercrime are the same barriers to the executor,” Hartung said.

An executor must find out if the deceased person had digital assets, and if so, how to access them. Then the executor must know if access to the assets is allowable under the law.

Both Hartung and Polk mentioned Google and Facebook among the few digital providers that offer a pre-planning function. But the website deadsocial.org, an online estate planning service, reports that less than five percent of subscribers are using these features.

“This is something I think consumers will demand once they find out what the problem is,” Hartung said. “It’s a really complicated issue for lawyers to wrap their heads around as we try to navigate and make sure we can do the same thing we’ve done with our physical assets is bequeath these to beneficiaries.”

Attorneys should encourage their clients to inventory their most important online accounts and make sure someone trustworthy can access them, and ask clients what they have and what they want to pass on.

But Coumas also suggests weighing the costs and benefits of pursuing digital assets. If the costs outweigh the financial benefits, beneficiaries should provide informed consent to pursue them.

“Otherwise, the fiduciary may open themselves up to breach of fiduciary duty claims,” Coumas said. “A willingness to enforce the fiduciary’s right will go a long way to ensure compliance,” Coumas said.

Planning can save a family frustration at a time when they’re grieving their loved ones.

“You see these heartbreaking cases of somebody who passed away without leaving any sort of direction, and after a year or two their accounts have been deleted and so the families are stuck,” Polk said. “Over time it’s really going to be important to keep on top of what your websites and online accounts are doing and the changes that are being made to them.”

But the secrets the deceased may have been hiding in their digital assets may sometimes be damaging to the living, and attorneys need to consider this as well.

“It is possible that such assets may contain upsetting or disconcerting information,” Coumas said. “We, as counsel, should provide thoughtful advice regarding the procurement and distribution of such information keeping in mind that such information may have unforeseen consequences.”

Follow Renee Sexton on Twitter @BobcatRenee