McClellan Legal LLC Estate Planning & Tax Assessment Blog

Thursday, September 14, 2017

Planning for Your Digital Assets and Online Accounts

With the Internet boom over the past twenty years, many people maintain online accounts and have accumulated digital assets.  Unlike paper statements that arrive in the mail or tangible property that is located in your home, your online accounts and digital assets are extremely difficult for other people to locate without your help.  With a little planning, you can remedy this problem.

The term digital assets does not yet have a well-established definition, but a simple definition for digital assets is content that is owned by a person and is stored in digital form.  For example, digital assets include photographs stored on your smartphone or the cloud (e.g., via, digital music (e.g., via iTunes), and social media accounts (e.g., Facebook).  Since most digital assets have monetary and/or emotional value, it is important that your digital assets be identifiable and made accessible in accordance with your overall estate planning wishes.

Many companies provide us with the option of paperless billing, accessing accounts via the Internet, paying bills via online banking, and setting up auto payments.  These options are convenient for you and the company.  However, they are a nightmare for those that survive you because there is no automatic paper trail.  Years ago, surviving family members simply needed to check your mail to get a snapshot of your financial world.  For most people, account statements do not arrive via regular mail.  What will happen with your online accounts when you die or become incapacitated?  Without readably accessible evidence of your account statements or monthly bills, how will your family members be able to manage your finances when the time comes?

Your estate plan should include careful consideration of how to ease the administrative process for your family.  Your loved ones should not need to be a forensic accountant to track down your bank accounts, mortgage, and bills. Some states, including Delaware, have adopted the Uniform Fiduciary Access to Digital Assets Act (UFADAA) to establish a process for allowing your executor, trustee, or power of attorney to access your online accounts after your death.  At the time of this article, Pennsylvania is not among the early adopters, but I anticipate that Pennsylvania will join them soon.  For residents of states that have not adopted UFADAA, it is even more important to develop a plan for your online accounts and digital assets. 

In order to start the process of reducing the future administrative burden on your family, here are few basic steps to consider:

1.       Inventory your online accounts and digital assets

2.       Store access details to your online accounts and digital assets in a safe place that your executor, trustee, and/or power of attorney will be able to find

3.       Provide clear details in your estate plan regarding who has access to online accounts and who will receive the digital assets

We look forward to an opportunity to discuss a strategy to manage your online accounts and digital assets to reduce the administrative burden on your family.

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