TRUST & ESTATE PERSPECTIVES

Charting a course for your digital footprint

Managing the transition of digital assets is now an essential part of the estate planning process.

Now more than ever, we conduct more of our daily activities online. Everything from management of financial accounts to the review of medical records, bill pay, email, photo storage, even intellectual property, can be handled online, therefore it is essential to have a plan in place for the digital assets you leave behind.

Take inventory

Paper statements were once the norm, and it was easy to see which accounts needed attention. Invoices, monthly bank statements and other important documents would be delivered right to your home on a regular basis. Their physical presence was a reminder for you to take whatever action was necessary, and it was easier for you to store similar documents together. The landscape is different now that these assets are digital and are password-protected.

Take an inventory of all of your digital assets and organize them accordingly. For example, there should be a clear accounting of assets, including account names and passwords. Our Vital Inventory Manager is a terrific tool to facilitate this process. An inventory manager should include any and all essential information, such as bank accounts, credit cards and investment accounts, as well as insurance policies (life, health, disability, long term care, etc.), club memberships, airline miles, favorite charities and more. Having all of this information housed in one place, with contact information for key contacts and passwords provided, reduces the administrative stress on family, friends and fiduciaries. The time of inventory is also a great time to consolidate assets under one umbrella that may currently be housed at a number of financial institutions. Consolidation will make the management of these assets easier for you, your loved ones and your fiduciaries.

Have a plan

Managing the transition of digital assets is now an essential part of the estate planning process. Consider talking to your trusted advisors (financial, tax and legal) about how to deal with these various digital assets and how the transfer of these assets may impact the legal, financial and tax outlook for you and your beneficiaries.

You may also need to discuss the potential efficacy of trust ownership and powers of attorney. For some accounts, you may need to check the terms of service agreements as they may state that the account is nontransferable, in other words a fiduciary may be precluded from managing that account or taking ownership of it. While some service agreements have clear steps laid out in the event you need a fiduciary to step in, be mindful that others do not.

Stay up to date

When it comes to digital assets transferring ownership is not always straightforward. Federal and state laws are just now starting to address digital footprints and all they entail. Further, different states have different laws, so you will need to check what the applicable regulations are in your state.

For example, the Uniform Fiduciary Access to Digital Assets Act gives fiduciaries the authority to manage and distribute, copy or delete and access these assets. However, only Delaware has enacted this legislation thus far. Other states, including Connecticut and Rhode Island, have enacted their own laws to help fiduciaries gain access to these online accounts.

Another new law to note is the E-Wills Act, which was passed in July 2019. Up until this point, wills still required paper documentation. This act now makes it legal for wills to be electronic in form, but it gives the state latitude on whether witnesses need to be physically present or if they can sign remotely. This has act not been adopted by all states, so be sure to check the laws in your particular state.

Consider taking the steps necessary to ensure that your online assets can be accessed by your next of kin. This way, you ease any burden on them in your absence and help simplify the process overall. With our digital footprints growing every day, now is the time to start planning.

Katie is a Managing Director and Fiduciary Advisor at the Boston office. Prior to joining SVB Private, Katie was a Partner at DesRosiers, Tierney & Sheehan, LLC, and also practiced at Cody & Cody, LLC and Ruberto, Israel & Weiner. Her private practice career concentrated in the areas of estate planning, estate and trust administration, charitable planning, long-term care planning and elder law.

The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of SVB Private or other members of Silicon Valley Bank Financial Group. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein