Estate Planning in a Paperless World

Digital Asset TrustDo you use email or online banking? Then you need a Digital Asset Trust. This video explains how to keep…

Technology has changed the world so much in my lifetime. Before the digital age I would get my bank statements by mail, now I get them in my email or login online to check balances. I wrote paper checks to pay my bills, now I use online banking for most bills. My family kept bookshelves full of photo albums, now all my pictures are on my phone or in cloud storage programs like Dropbox or iCloud. I used to handwrite letters and send postcards, but now I use email and interact on social media sites like Facebook, Instagram or Twitter.

Have you ever wondered what happens to all aspects of your digital life after you pass away?

While technology has made many parts of life easier, leaving behind a trail of “electronic records” instead of physical paper records has created some new issues that should be considered such as, how will your loved ones access your information if there are no physical paper records?

I started working in estate planning as a law clerk for my father’s firm about 16 years ago. During this time, I took a call from a daughter that was trying to manage her mother’s estate. She called because she had been named trustee but needed to figure out what the trust owned. I really wanted to help this client, but she was disappointed when the paralegals and attorneys in the firm told her to look around the house for accounting records and to check the mail to look for bank statements. Like the caller on the phone, I was also expecting a better answer.

As an estate planning attorney, I have received this same type of call several times over the years and I would give the same response: check the mail box. However, a few years ago, something changed. Clients and their children started to report that they were banking online and not receiving paper statements. Now what? How do you find record of an account if the only statements are sent to an email and you can’t log in?

I started researching solutions. While some software companies were attempting to resolve the issues of paperless records; however I didn’t like any of the options enough to recommend my clients use them. I also started to put more emphasis on clients leaving records of their accounts and updated some of our processes in an attempt to make it easier to store digital information.

The Revised Uniform Fiduciary Access to Digital Assets Act (FADAA)

In 2016 I saw pending legislation for the Revised Uniform Fiduciary Access to Digital Assets Act (FADAA). This law gives the authority to direct what happens to your digital information after you are gone. I realized that we could now provide a better way to share information that was stored electronically.

According to FADAA the information and records are digital assets, but not the underlying asset itself. For example, your bank is storing information about your account electronically, the information about the account is your digital asset and not the money in the bank. Even if you get your bank statements on paper and do not use online banking to access your, account your information is still being stored electronically by the bank and is your digital asset. Everyone has digital assets!

I drafted a “Digital Asset Trust” based upon what was possible in the new law and started to interview my clients during our Personal Family Legal Sessions about how they receive their bank statements and where they store their important information. I also asked questions to get a sense of what information people were comfortable sharing.

I found that a lot of people were comfortable sharing passwords to their email accounts and online banking. However, I consider sharing passwords bad planning for a few reasons:

  • What if you change your passwords and forget to update the record?
  • What if the wrong person finds the password list?
  • Is it illegal? The “terms of service” agreement for most email accounts and online banking end when someone dies and prohibit sharing of passwords.

At Dana and Associates we created paperless solutions for your legal plans.

Part One – Inventory

We include specific language in our Trusts, Last Will and Testaments and Power of Attorneys that allows for the fiduciary (the person in charge of your finances after you pass or become incapacitated) to request an inventory of all digital assets including:

  1. the type of account,
  2. the value of the account,
  3. the owner of the account
  4. the beneficiary of the account (if there was a beneficiary named).

This allows the fiduciary to access the information only and not the underlying assets. After they know what accounts exist, they can use the proper legal document that gives them the authority over the account.

Part Two– Digital Asset Trust

I created a Digital Asset Trust where you list your specific email address and give your trustee the authority to access a list of emails received. The trustee will not have access to the content of the emails. They will only be able see a list of email senders, the email subject and when the email was received. This request provides the trustee with the information they need to administer the trust and estate while still protecting your privacy and securing your private communication. However, the FADAA legislation does say that the institution can require a court order if they think the request is too intrusive.

Part Three – Digital Vault

When I complete a legal plan for a client I tell them to store the documents somewhere safe, where the right people can find it when they need to. All of our legal plans now include access to a Digital Vault. We provide a license to Everplans, which is a software company that allows you to store all of your estate planning documents and important information electronically. It also gives you the ability to share the document with who you want when you want. This provides an extra layer of protection for your documents in case your family can’t access your paper record.

Does your Estate Plan fit your paperless life?

Call today for a free consultation with us. Our attorneys can help you review or create a plan, giving you peace of mind knowing your family will be taken care of. Each estate plan we create is tailored to your unique situation.