Online accounts and what happens to them after we die / or if we are incapacitated is a subject that impacts a majority of people. Today, I want to write about the passing of a new law in California.
As we wait for national legislation for Fiduciary Access to Digital Assets, we live in an age where many of our accounts, which have monetary and personal value, may now be defined in our estate planning documents.
California passed a new bill to be added to the state’s Probate Code, AB 691. This bill went into effect January 1, 2017, pertaining to who is entitled to access your online accounts after you die.
Why is this of interest?
When a person who owns valuable digital assets passes away, the heirs will be able to take steps to protect and perhaps liquidate that asset. This can be exasperating for heirs today when they must navigate numbers of different internet companies with their varied policies, each with its own terms-of-service agreements that often restrict third party access to individual accounts.
In addition to financial assets, many of the digital impressions that we create on a day-to-day basis have a sentimental value; things like pictures and messages, i.e. social media accounts, such as Facebook, LinkedIn and Instagram et al.
This is of interest to all. Yes, a tendency is to think personally, yet it is important to consider the implications of this at the workplace also. This can be complicated for businesses who have yet to establish clear and defined succession/contingency plans. Make sure to establish procedures for access to all online accounts at home, at work and in your area of responsibility at work, should it be necessary for someone to access accounts.
How Does It All Work?
The Act creates a preference for “online tools.” An online tool may be used to specify who is your designated recipient after your death and direct websites to disclose (or not) your online content.
An example of this is Facebook. Within Facebook’s security settings, there is a section called “Legacy Contact”. In this section, you may designate another Facebook user to be your designated recipient who will be permitted to act for you within Facebook after your death. However, Facebook will not permit this person to use Facebook for you before you die, nor will they see your lifetime messages. Caution here, each of the online providers has the right to grant full OR partial access to whom we select.
Note: IF you elect to specify a designated recipient directly with an online provider, per AB 691, this selection supersedes provisions you may have made in a will.
The Act does create a protocol for a “personal representative” or a “trustee” to demand disclosure of digital assets and/or electronic communications. (See Probate Code section 876-879.) A personal representative may be asked to submit a) a written request for assets, b) a certified copy of the death certificate, c) a letter of appointment, small estate affidavit or court order, and d) in some cases, a copy of the decedent’s will, trust, power of attorney or other document to show the relevance of such access as necessary for estate administration. The streamlined approach to digital assets is another reason to use a trust as part of your estate planning, and if you have a trust you might amend it to deal with digital assets.
Who Really Benefits?
The Act was supported by industry – technology companies like AOL, Facebook, and Yahoo – and in their roles as custodians of digital assets and electronic communications it provides them with many protections.
As described above, the custodian may insist upon a court order before releasing any records, seemingly even if the decedent went through the process of using an online tool or making a fiduciary designation.
Other protections for custodians include:
- It is left to the custodian to determine what constitutes sufficient access
- If a decedent directs the disclosure of some, but not all of their digital assets to a specific designee, a custodian may refuse to permit access
- Custodians are not subject to liability for anything they do in “good faith” in compliance with the Act
What Next?
Stay tuned for updated information pertaining to National Legislation. To date, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Washington, Wisconsin and Wyoming have passed legislation.
If you hold significant digital assets, placing those assets in trust is the surest way to provide for your timely access to your digital assets after your passing. When digital assets are included in your trust, the online account companies are provided with specific information to help them help your heirs.
Contingency planning at home and work benefits people in measurable and profound ways. The Living Planner supports proactive resources and comprehensive business and individual/family contingency planning.
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