Estate planning can be a critical part of securing your client’s financial future and helping see that their loved ones are cared for after they’re gone. However, in today’s digital age, an increasingly important and often overlooked aspect of estate planning involves managing digital assets. From email accounts to cryptocurrencies, these assets can be complex to navigate without a proper plan in place.
Digital assets can include a wide range of accounts, files, and digital property, such as:
• Email Accounts
• Airline/Hotel Miles & Points
• Social Media Accounts
• Cloud Storage
• Cryptocurrencies, NFTs, and other assets stored on the Blockchain
• Digital Photos & Music
• Website Domains
• Blogs
• Digital Storefronts (Etsy, Ebay)
• Subscription Accounts (Netflix, Hulu, Amazon Prime)
Without a plan, accessing or transferring these assets can be challenging, as many terms of service agreements restrict access upon the owner’s death. Proper authorization can play a key role in avoiding unnecessary complications during estate administration.
Understanding the Revised Uniform Fiduciary Access to Digitial Assets Act (RUFADAA)
In more than 90% of U.S. states, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) governs fiduciary access to digital assets. This legislation outlines a threetiered framework:
Tier 1 — Online Tools: Priority is given to any “Online Tool” provided by a digital platform. These tools allow users to specify how their accounts should be managed after death. Examples include Google Inactive Account Manager and Apple iOS 15.2+ Legacy Contact
Tier 2 — Estate Documents: If no online tool is used, digital asset owners can grant access to fiduciaries through estate documents such as wills, trusts, or powers of attorney. These instructions override conflicting terms of service agreements.
Tier 3 — Terms of Service: In the absence of user directives, the platform’s terms of service will dictate access. Unfortunately, most agreements restrict post-death access, making this a less favorable option.
The Role of a Wealth Management Team
At Dean Dorton Private Wealth, we believe comprehensive estate planning includes accounting for digital assets. Our advisors work collaboratively with clients and their legal teams to:
• Bring Awareness: We strive to educate clients about the importance of digital assets and the applicable rules and regulations.
• Create a Digital Asset Inventory: We recommend that clients maintain an up-todate inventory of digital assets that are stored securely with a password manager. This list ensures no asset is overlooked.
• Guide Implementation: Using the three-tiered approach, we help clients determine the best course of action to align with their wishes.
Best Practices
1. Include digital assets in wealth transfer and estate planning discussions.
2. Encourage clients to inventory their digital assets.
3. Review the use of online tools when updating beneficiary forms and other estate planning documents.
4. Consider adding language about digital assets to estate documents during routine updates.
Getting Started
1. Document Review:
a. Obtain a copy of estate planning documents and review for language addressing digital assets.
b. Assess beneficiary assignments and ensure alignment with overall goals.
c. If necessary, facilitate an introduction to a trusted estate planning attorney.
2. Digital Asset Inventory:
a. Work with clients to compile a list of potential digital assets they own.
3. Client Conversations:
a. Discuss the importance of digital assets and gauge client concerns.
b. Focus on long-term planning and the role of fiduciaries.
4. Follow-Up Actions:
a. Track action items in CRM systems.
b. Save documentation related to digital asset management for future reference.
c. Provide clients with summaries of the planning process for their records.
Move Forward with Confidence
At Dean Dorton Private Wealth, our approach helps ensure no detail is overlooked. By addressing digital assets alongside traditional estate planning, we help clients protect their legacy in an ever-evolving digital world. Contact us today to learn more about how we can support your wealth management and estate planning needs.
* This content is for informational purposes only and developed from sources believed to be providing accurate information. We make no representations as to its accuracy or completeness. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This should not be considered a solicitation for advisory services or the purchase or sale of any security.