Digital Assets Need to Be a Part of Your Estate Plan
With all the electronic bill paying and online banking that goes on today, it's important to make provisions for them. Otherwise, things could get tough for your loved ones later on.


Thanks to the Internet, most companies provide you with the option to receive electronic statements, set up auto payments or pay your bills online. Many businesses are in favor of these methods and support online account management and paperless billing. It’s less expensive, more convenient and more environmentally friendly for them to send out bills via email than it is to mail them to each customer.
One issue with this type of account management is what will happen with these accounts when you die or become incapacitated? Without physical evidence of your bills or statements for your accounts, how will your successor trustee or family members be able to manage your bills or finances when the time comes? How will they know about bills due or money owed if they are unable to access your email or online accounts?
Online profiles with personal information, pictures and contacts are increasingly used by all of us. These include Facebook, LinkedIn, Twitter and Instagram. How are these accounts or digital assets handled upon your death or incapacity?
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Your estate plan should be designed to make the administration process as easy as possible for your loved ones. This includes making it convenient to manage your assets upon your incapacity or death and saving them the hassle of sorting through your paperwork to collect assets and pay your bills. Without specific provisions in your estate plan and careful planning, access to this critical information can become difficult for your family or loved ones.
Federal law regulating access to digital property does not yet exist. At this time, 29 states have established legislation or laws to protect digital assets and to provide a deceased person’s family procedures and rights to manage those accounts and assets after death.
On Jan. 1, 2017, the Uniform Fiduciary Access to Digital Assets Act (the “Act”) became effective in California. California is one of the many states in the U.S. to adopt this law, which establishes a process for allowing your executor, trustee, power of attorney or court-appointed conservator to access your online accounts after your death. This act also allows you to designate some (or portions) of your account as “off-limits” after your death. This act has been added to the California Probate Code sections 870 – 884. Other states have established separate laws which differ from the Act. The states that have adopted either the Act or other similar laws or legislation include Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey (in progress as of May 1, 2017) New York, North Carolina, Oklahoma, Oregon, Pennsylvania (in progress as of Nov. 19, 2015), Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Washington, Wisconsin and Wyoming. As laws continue to change this list may change from time to time. Please check with your local legislative branch to determine if your state has enacted this Act.
Your Durable Power of Attorney and your trust instruments should include provisions consistent with California Probate Code sections 870 – 884 or the versions, if any, in effect for your state. These sections provide for naming a fiduciary to act on your behalf for these critical accounts, assets and profiles.
In today’s digital world, most of our financial transactions and communications occur online. Photographs, websites and Internet profiles are now almost expected for all of us. You can do almost anything online, and many people choose to do so. These accounts have limited access with protected passwords, which can create problems when the account holder dies because no one has access to their passwords. Planning now can save a lot of heartache later.
What do you do if you are not in a state of jurisdiction with protective laws? Who gets access to your Instagram, Facebook, LinkedIn or Twitter account when you die? In the absence of protective legislation, those accounts or assets are governed by the terms of the service agreement when the account was opened. Under these agreements, family members would need confidential identification information and passwords. Consider the following steps:
1. Inventory Your Accounts.
Document an inventory of the accounts including login IDs and passwords. That information should be maintained in a secure location.
2. Create an Online Vault.
This would be a place to keep passwords, identification or login information and other sensitive information. Two options are available through Everplans or Dropbox.
3. Establish a Detailed Digital Asset Plan.
This plan would have a clear, specific statement of intent about who would gain access to what information. This statement of intent should address all accounts, past, present and future.
4. Carefully Select Your Trustee, Executor or Representative.
When making your decision, consider the private and confidential information that will be accessible. Oftentimes, the information embedded in the digital assets is highly personal and confidential.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Founder of The Goralka Law Firm, John M. Goralka assists business owners, real estate owners and successful families to achieve their enlightened dreams by better protecting their assets, minimizing income and estate tax and resolving messes and transitions to preserve, protect and enhance their legacy. John is one of few California attorneys certified as a Specialist by the State Bar of California Board of Legal Specialization in both Taxation and Estate Planning, Trust and Probate. You can read more of John's articles on the Kiplinger Advisor Collective.
-
Savings Goal Calculator
Tools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Cash vs. Mortgage: How to Pay for Your Second Home
Should you buy your second home outright or finance it with a loan? Weigh the pros, cons and tax implications before making the leap.
-
Gray Divorce Can Throw Your Retirement a Curveball: What to Know
If you're entering retirement and going through a divorce at the same time, you've got some work to do to shore up your long-term financial security.
-
I'm a Real Estate Investing Expert: Optional 721 UPREIT DSTs Can Be the Best of Both Worlds
Before investing in any 721 UPREIT exchange, look for one that offers a straightforward, investor-friendly exit.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client Reviews
Financial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop Investments
Truck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams Now
Beyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.