Oct 13, 2022
Do you know how to protect your digital legacy?
Over the past few decades, significant advances in technology have essentially revolutionized how we live, the way we learn and communicate, how we manage our health and finances, and much more.
However, the digital age has also ushered in complexity related to both ownership and eventual inheritance of your digital assets. Based on current U.S. laws, your digital assets cannot be left to your heirs through your will. What does this mean, and what can you do to protect your digital legacy? In this article, we define digital legacy and discuss several important aspects of safekeeping and ultimately transferring control of these valuable (but often overlooked) assets.
Defining your digital legacy
Your digital legacy is the electronic data that you will leave behind on the Internet and other data media when you pass away. It consists of your financial accounts, digital wallets, email accounts, online profiles on social networking sites, online rewards programs (e.g., airlines, credit cards and hotels), business accounts, cryptocurrencies, and digital assets such as photos or music, among others.
Who can access your digital accounts?
Your spouse, children and other relatives may not be able to simply request access to your digital accounts. Unfortunately, rights to these accounts are scattered through a labyrinth of user agreements and federal and state laws, making access to them time consuming and complex at best.
Terms-of-service agreements, which are often not carefully read before granting consent, may prohibit third-party access, which includes fiduciaries, relatives and personal representatives/executors. In addition, federal laws governing the unauthorized access of digital assets are usually focused on protecting privacy and combating identity theft, hacking and other forms of cybercrime. Therefore, even if a fiduciary possesses the username and password, they may not have the legal authority to use them and can run afoul of these laws if they attempt to gain digital access. Two-factor authentication, which uses a cell phone or email to authenticate a user, can make it virtually impossible to access some of the sites that the deceased had frequently visited.
Recent developments may help your heirs
The Uniform Law Commission, a not-for-profit organization that provides states with nonpartisan draft legislation, has promulgated the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The terms of this act allow users to give consent for third-party access (in a will, for example) that overrides certain terms-of-service agreements and privacy policies. Because affirmative consent by the content owner is required, appropriate planning is necessary to facilitate access as desired. RUFADAA has been adopted by 46 states, and four more states are considering it (as at April 2020).1
Steps you can take now to protect your digital legacy
The first step is to create a comprehensive inventory of your digital assets. Since access to these accounts typically requires a password, you may want to consider using a digital password storage tool or creating a simple password diary of usernames, passwords and answers to secret questions.
You should secure and limit access to this digital inventory during your lifetime, but make sure your spouse, children, etc. know where it is and how to access the assets as a fiduciary. For example, Google has an online tool called Inactive Account Manager that allows users to indicate who may access their information upon official notification to Google of the user’s death.
Once you create your digital inventory, you will want to determine planning options available under applicable state law(s) and work with your estate planning attorney to add appropriate instructions to your will, trust or power of attorney. These instructions should include express permission for a fiduciary (Personal Representative/Executor, Successor Trustee) to either access or destroy certain digital assets, in order to secure your digital properties and help safeguard your estate.
ABOUT THE AUTHOR
Founded in 1994, Segall Bryant & Hamill (SBH) provides professional portfolio management of domestic and international equity, fixed income, and balanced portfolios, as well as alternative investments to institutional, intermediary, and private wealth clients. Our clients benefit from the expertise of our professionals, who have navigated diverse and challenging market environments and are experienced with all aspects of wealth planning. We understand the complexities that can come with managing your wealth. That’s why we take a comprehensive approach to the advice we give and the assets we manage on your behalf. This approach includes a personalized financial plan and tailored portfolio of individual stocks and bonds researched by our institutional investment team.
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