Digital Assets – An Essential Component to Estate Planning

By:  Nicole T. Livingston – Associate Attorney, Elville and Associates, P.C.

Nicole LivingstonIn 2016, the Maryland Fiduciary Access to Digital Assets Act became law.  This law allows your agent named in your power of attorney, a trustee named in your revocable living trust, or a personal representative named in your Last Will and Testament to obtain access to your digital assets.   Prior to this law being enacted, agents, trustees, or personal representatives of your estate had a difficult time accessing online accounts or social media sites.   Under the new Act, you must have language in your documents that specifically state that your fiduciary has access to your digital assets.  Our documents were updated to reflect this new required language.  If you have not reviewed your documents in recent years, you should consider scheduling a review meeting with your attorney to discuss this important update to your documents.

As digital assets become more common for all of us to have, it is important to incorporate them into your estate plan.   Digital assets include purchased movies, songs, books, or games which can be a significant amount of money.  Often clients have digital pictures stored on a cell phone, on a social media site such as Facebook, or a website such as Snapfish or Shutterfly.  These accounts are at risk if you do not appropriately plan for your fiduciary to gain access.  Your family members may want to retrieve these memories and you do not want them to violate any privacy terms of the service agreement you agreed to when you signed up for these services.  With the permission granted in your estate planning documents, your fiduciary can contact these sites and gain access.

Clients who have a business and own a website domain site may need their fiduciary to gain access to the site if you become incapacitated or upon your death to gather pertinent business assets or proprietary information.   Electronic access to bank accounts is becoming more common.  Gaining access to electronic accounts to administer an estate is no longer a hassle under the Maryland Fiduciary Access to Digital Assets Act. There are systems in place to allow companies to provide a temporary password to gain access to the data and ease the administration of your estate.

There are steps you can take now to ease the burden on your fiduciary.  First, you should update your documents with the required language if you have not already done so.   Second, create a list of your online accounts and keep the list updated on a yearly basis.  When you file your tax return each year, you can schedule a reminder to verify that the list has not changed.  Third, provide the passwords to your fiduciary using a secure method.  There are several businesses that offer services to store usernames and passwords.  Whatever method you choose, make sure your fiduciary knows where and how to find the information.   Taking these steps now can ease the burden of administering your estate.