It’s difficult to go a few hours without interacting with a digital account. Whether that is email, online banking or social media, many daily tasks involve digital informational storage. But when a person dies, what happens to that information?
To ensure it is protected, Rachel Kabb-Effron, owner of the Kabb Law Firm in Beachwood, and Barbara Bellin Janovitz, partner at Reminger Co., LPA in Cleveland, suggested individuals include it in their estate plans, just like any other asset.
Digital assets run the gamut, but include things like social media – Facebook, Instagram or Snapchat, for example, bank accounts, emails, investment accounts, blogs, photo sharing accounts, cloud storage and even text messages.
Kabb-Effron said the easiest way to determine if something is a meaningful digital asset is to consider anything with a password attached to it.
“You also have things stored in the cloud, for example, my whole business is backed up every night, and people do the same thing with their household files,” she said. “People also have digital money like bitcoin that is only stored in the cloud. So, you’d need to know how to access it.”
After determining what a digital asset can be, one should also know how to plan for them in an estate.
Janovitz explained the Uniform Fiduciary Access to Digital Assets Act, which passed in Ohio in 2017, gives statutory guidance on the rights people have to access digital assets on four different types of fiduciaries – an executor, trustees, agents under a financial power of attorney and guardians.
“That allows people to grant other people legal authority to access their digital assets and the contents of their communications,” Janovitz said. “It establishes a three-tier system for the user, the top priority being that if they express permissions in an online tool of a specific asset, like Facebook and Google. If someone has done that directly with the custodian on a digital asset, that will control under the law. If they haven’t, they can provide for that in their estate planning document and they can allow or prohibit people to do that. That also controls under the law. And if they don’t have either, the terms of service usually governs.”
Janovitz said it is up to attorneys to ask clients about their digital assets, adding it should never be left up to just the individual to remember themselves.
“Attorneys need to ask clients now as we do their estate planning on how they want to handle their digital assets,” she noted. “A client might have an email account that they don’t want people to know about, so they might want to take advantage of the ability to prohibit access, for example. But attorneys really have to encourage clients to create an inventory of their digital assets and make sure the language meets the 2017 law. Just having a list isn’t good enough, it’s just the first step.”
If a digital asset isn’t included in an estate plan, individuals run the risk of losing access to the account or correspondence forever. Kabb-Effron said in many cases, those left behind would have to go through probate to gain access after the fact.
“You’d have to get the power from the court to be able to have access,” she said. “Sometimes, someone will be fighting over it, like one sibling wants the accounts and others don’t. You don’t want people to be fighting over it. It’s about knowing the key people, documents and information at hand when someone passes away. Otherwise, it would go to court or end up being lost.”
That is where an estate planner is useful. Not only helping the estate planning process go smoothly, but an estate planner can also make sure nothing gets left behind, the attorneys said.
“Making sure the process is seamless is a big part of the planning stage and talking about it all, how they want to handle it and if they want information released,” Janovitz said. “That is the part we do, and then we encourage clients to keep those lists. It’s about over-emphasizing with clients the importance of keeping that information. Sometimes, clients just won’t think about it if we don’t ask the question.”
Kabb-Effron added, “Digital assets can’t be ignored. They have to be addressed somewhere in the estate plan. People think this is just for young people but it’s for all ages. People of different ages use different methods of social media and online accounts. It is something we all need to address. It comes down to communication, just like regular assets.”