Do you have an email account, airline miles, hotel points, a Facebook account, or photos stored online? Have you ever wondered what happens to these “digital assets” at death? If you think your spouse or designated Personal Representative can access, manage, or transfer them to your heirs, think again. The Terms of the Service Agreement may not be on your side.
Most people typically scroll through the Terms of Service Agreement for online accounts, click “accept,” and move on. Many have no idea that a majority of these service agreements state that no other individual is permitted to access the information, even when acting in a fiduciary capacity. Once these online providers are notified of a death, the sites may be locked, disabled, or deleted immediately. Legally, a spouse, child, or Personal Representative cannot access them.
While you may think digital assets don’t have much value, consider this: Airline miles and hotel points have value (sometimes significant) and could be transferred to and used by another individual.
Points from online games are often convertible to cash, credits or gift cards. These points are especially valuable when money has been invested in the game. Family photos stored on sites like Snapfish, Shutterfly or iCloud are irreplaceable and have a sentimental value to your family members. Facebook posts on a loved one’s page may have sentimental value when he or she has passed. In addition, if the account is locked but not deleted, you will likely continue to receive birthday reminders and other milestone updates from the deceased person’s record.
If you have elected to receive electronic statements for any bank, investment, or retirement accounts, your email address receives notification statements. If your Personal Representative doesn’t have access to your email, he or she may not know what financial institutions you utilize.
Likewise, he or she may not be aware of payment obligations on your credit cards, utilities, or other bills. While you may count on your spouse to provide that information, your adult child or sibling may have trouble when acting in a fiduciary capacity. This unfortunate circumstance could delay asset transfers to heirs, aggravate creditors, and allow for a permanent loss of photos and other memories of which the Personal Representative simply wasn’t aware.
Oregon is the first state in the country to pass legislation addressing these issues. Governor Kate Brown signed Oregon Senate Bill 1554 (The Revised Uniform Fiduciary Access to Digital Accounts Act, or RUFADAA) in March. Effective January 1, 2017, Personal Representatives, Powers of Attorney, and Trustees will have access to online accounts in order to perform their fiduciary duties. Other states are discussing legislation but have not yet enacted laws addressing digital assets.
What Should You Do?
To preserve your digital assets and support the wealth transfer process, create a list of all online accounts, including but not limited to banks, credit cards, utilities, rewards programs, social media, email, and photo storing sites. While passwords frequently change, your Personal Representative will at least know what you have. Keep this list in a secure place as it provides access to personal identification and financial information.
Once your state enacts legislation governing digital assets, your estate planning documents should be updated to expressly grant a fiduciary authority over digital assets. If your estate documents do not address digital assets, the Terms of Service Agreement will still control the digital assets.
Many providers offer a place on your user profile in which you can designate the person who is authorized to access your account at death. You may need to update your profile settings in order for this provision to apply.
If additional states enact RUFADAA legislation, online account providers may be forced to change their Terms of Service Agreements. Until then, individuals and families should take steps to protect their digital assets.
Meet the Author
Director of Financial Planning
Abbey Rollins, CFP®
Abbey joined Aldrich Wealth in 2007, after spending five years at a traditional brokerage firm. Abbey’s goal was to focus on personal financial planning, which was not a service valued in the brokerage industry. Shortly after joining the firm, Abbey obtained her Certified Financial Planner™ practitioner designation (CFP®) and greatly expanded the financial planning services…
- High net worth families, business owners and medical practitioners
- Series 7, Series 66 and Series 31 securities exams
- Certified Financial Planner™