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McClellan Legal LLC Estate Planning & Tax Assessment Blog

Thursday, February 14, 2019

PA Doesn't Protect Digital Assets, But You Can

Since the invention of the Internet, most people have accrued various forms of digital assets. What happens to these digital assets when you pass or become incapacitated? Now that many websites and applications require intricate passwords that are difficult to guess, many accounts remain inaccessible to loved ones. Your loved ones may not be aware of all of your digital assets, either. However, with proper estate planning, you can remedy this issue.

 What are Digital Assets?

Digital assets are anything of emotional or monetary value that you own in a digital format, such as pictures, documents, music, or cryptocurrency. Because these assets are stored digitally, rather than physically, it may be difficult for your fiduciaries to access the assets after you pass or become incapacitated. Therefore, it is important that your digital assets are identifiable and made accessible in accordance with your overall estate planning wishes.

A few top digital assets are iTunes, Shutterfly, Facebook, and Bitcoin. Be sure to note if the website or application you are using to store your digital assets have a monthly or annual charge, so your loved ones can choose to continue paying for the service, or remove the files and cancel any future charges. Digital assets with monetary value, such as Bitcoin and other cryptocurrencies, need to be tracked as their market value constantly changes.

Including Digital Assets in Your Estate Planning

Most states have adopted the Uniform Fiduciary Access to Digital Assets Act, Revised (RUFADAA) that allows your executor, trustee, or power of attorney to access your online accounts after your passing. However, Pennsylvania is one of the few states to reject the RUFADAA, which means that companies decide if anyone else can access these assets, or if the accounts get deleted upon your passing.

While Pennsylvania has rejected the RUFADAA, you can still include your digital assets in your estate plan. Here are a few steps you can take to reduce the administrative burden on your fiduciaries:

 

1.      Inventory your digital assets and online accounts as they correspond to their passwords. Maintaining an accurate list of your digital assets and accounts with their passwords not only allows you to keep track of this information, but also permits others to have access to these accounts. Many websites and applications store passwords, so be sure to add the passwords or codes to your computers, phones, and emails for easier access. You should also include any password management applications you may use to store this information.

 

2.      Store this information in a safe location to which your fiduciaries will have access. Of course, you don’t want to have this information where others can find it without your consent, but you don’t want your fiduciaries to go searching for this information either. Because your Will becomes a public document upon your passing, you should not include this specific information in your Will. Instead, you may securely store this information on your computer, in the same location as your Will, or on a shared drive to which your fiduciaries have access.

 

3.      Provide clear instructions and details to who can access your digital assets and who receives them. For example, you may not want one fiduciary to have access to all of your accounts. You should also decide if you would like to have any accounts deleted upon your passing, such as social media accounts. You may also want to include a statement allowing your fiduciary to reset your passwords, if needed. Again, because Pennsylvania has not adopted RUFADAA, it is important to provide clear consent and specific instructions in your estate plan.

 

We look forward to the opportunity to discuss a strategy to allow your fiduciaries to access your digital assets and online accounts.



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McClellan Legal LLC is located in Kennett Square and serves clients throughout the areas of Avondale, Chadds Ford, Coatesville, Downingtown, Landenberg, Oxford, Phoenixville, Pottstown, West Chester, & West Grove.



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