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There’s no question that the internet simplifies life in many ways: instead of driving downtown to the bank to deposit a check, you can just take a picture of it with your cell phone. Instead of flying across the country to meet with colleagues or clients, you can just schedule a Zoom meeting. In many ways, from financial transactions to conducting business to socializing, we are living more and more of our lives online. But what happens to your online life when your actual life comes to an end? That’s when the internet makes things more complicated, often painfully so. You create an estate plan to spare your loved ones stress and frustration about the distribution of your physical assets. But your estate plan also needs to address your digital assets—which in some cases might be as valuable to your loved ones as your other possessions.
According to Investopedia, a “digital asset” is anything in digital form that can create value. As a practical matter in digital asset estate planning, value is more than just whether anything is worth money. For example, most of us have years’ worth of irreplaceable photos on our phones, in social media accounts, and in online photo storage. How would you feel if your family lost access to those memories after you pass away? And that’s just one example of a digital asset you may want to pass on to your loved ones.
When we speak of digital assets in this blog post, we are talking about any digital or online materials you want your loved ones to be able to gain access to after your death or incapacity, including:
It’s important to understand both the Minnesota law that applies to estate planning for digital assets, and the practical steps you can take to make it easier for loved ones to access your digital assets after your death.
It seems logical that if you can give your trustee or the personal representative of your estate access to your physical assets, you can give them access to your digital assets as well. Most of those assets are stored on third-party servers. Access rights were governed by the Uniform Fiduciary Access to Digital Assets Act (UFADAA) which was in effect in Minnesota until 2016. UFADAA essentially treated digital assets like physical ones. While alive and capable, owners controlled them. After death or incapacity, that control belonged to the fiduciary of the estate (an agent, guardian, executor, or trustee).
Critics of UFADAA claimed that it contained insufficient safeguards for custodians of digital assets and could cause violations of the late account owner’s privacy in ways they would not have wanted. “Custodians” are companies that create, store, or provide digital assets, and the term encompasses companies such as Google and Facebook. In response, the Uniform Laws Commission drafted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which the Minnesota legislature adopted in 2016.
Under RUFADAA, fiduciaries can get access to most digital assets if they can demonstrate to the court why access is necessary to administer or close the estate. In order for a fiduciary to have access to a deceased or incapacitated person’s electronic communications (like email, texts, and private chats), the account owner must have explicitly authorized disclosure of those communications.
If an account owner does not have language in a will, trust, or power of attorney granting access to digital assets to a fiduciary, access may be governed by the terms of service of each account. Most of us haven’t even read, much less remembered, what the various terms of service of our online accounts say. That means you should create your own plan for access to your digital assets.
The law that is in effect in Minnesota strikes a balance between a deceased person’s privacy and the fiduciary’s need to administer the estate. How can you make things easier for your fiduciary?
One of the first things you should do is to ensure that your estate plan contains explicit language granting authority to your fiduciary to access your digital accounts and assets. Your chosen fiduciary for digital assets need not be the person who is in charge of your overall estate. You may, for instance, want to choose someone who is more tech-savvy, but who will work well with your personal representative or trustee to convey the information they need to administer your estate.
You will also want to make a list of your digital accounts and passwords—and update it regularly. For some people, it works well to have an online password manager, but your fiduciary may appreciate the simplicity of a physical list. Obviously, you will want to store this important document somewhere secure, but where your chosen representative will be able to access it readily when the time comes. Doing this can save your fiduciary countless hours of frustration trying to figure out which accounts you had, and trying to gain access to them.
To the extent possible, you may want to be proactive in granting access to your fiduciary through the websites you interact with. For instance, Google has an Inactive Account Manager that will allow access to parts of your account to someone you designate if you have been inactive for a certain amount of time. You can create a Facebook Legacy Contact to memorialize that social media page on your behalf.
To learn more about estate planning for digital assets, or to update your estate plan to grant digital access to your fiduciary, contact Mundahl Law at 763-575-7930 to schedule a consultation.