The question of whether a trust can authorize someone to handle digital assets is becoming increasingly vital in our modern, digitally-dependent world. Traditionally, estate planning focused on tangible assets—property, investments, and personal belongings. However, a significant portion of our lives now exists online, encompassing everything from financial accounts and social media profiles to photos, documents, and even cryptocurrency. Steve Bliss, an Estate Planning Attorney in San Diego, emphasizes the importance of proactively addressing these digital assets within a comprehensive estate plan. Ignoring them can lead to significant complications, lost access, and potential legal issues for your loved ones. According to a 2023 study, approximately 85% of Americans have some form of digital asset requiring management after their passing. This highlights the growing need for clear instructions and legal authority to handle these assets.
What exactly are “digital assets”?
Digital assets encompass a broad range of electronically stored information. This includes online accounts like email, social media, banking, and investment platforms. It also extends to digital photos, videos, music, documents, domain names, cryptocurrency, and even intellectual property stored digitally. It’s more than just passwords; it’s the access *to* those accounts and the rights associated with them. Many states, including California, have enacted laws—like the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)—to provide legal frameworks for fiduciaries to access and manage these assets. These laws attempt to balance the need for access with privacy concerns and the terms of service agreements of various online platforms.
How can a trust facilitate access to digital assets?
A properly drafted trust can empower a trustee to manage your digital assets, but it’s not simply a matter of listing account names and passwords. The trust document must specifically grant the trustee the authority to access, manage, and control these assets. This authority should be broad enough to cover all types of digital assets, even those that may not exist today. The trust should also address how the trustee is authorized to deal with Terms of Service agreements that might restrict access upon death. Steve Bliss notes that simply including a list of passwords within the trust isn’t secure or legally sufficient; a more sophisticated approach is necessary. The trustee should also have clear guidelines on *how* to manage the assets—whether to preserve them, distribute them according to your wishes, or terminate them entirely.
What about online account terms of service?
Many online platforms have Terms of Service (TOS) agreements that dictate what happens to an account upon the account holder’s death. Often, these TOS restrict access to anyone other than the account holder, creating a significant hurdle for fiduciaries. RUFADAA attempts to override these TOS in certain situations, allowing fiduciaries to access digital assets if authorized by the trust or will. However, it’s not a perfect solution. Some platforms may still require specific procedures or court orders. Therefore, a comprehensive estate plan should anticipate these challenges and provide the trustee with the necessary tools to navigate them. This could include provisions for pursuing legal action if necessary.
Can a trustee be held liable for accessing digital assets without proper authorization?
Absolutely. A trustee who accesses digital assets without proper authorization could be held liable for breach of fiduciary duty, invasion of privacy, or even criminal offenses. It’s crucial that the trust document clearly outlines the trustee’s authority and provides them with the necessary legal protections. Steve Bliss advises clients to ensure their trustee understands the legal landscape surrounding digital assets and is comfortable with their responsibilities. This may involve providing the trustee with training or consulting with an attorney specializing in digital estate planning. A well-documented and legally sound estate plan is the best defense against potential liability.
I remember my Aunt Carol, a lovely woman, but stubbornly resistant to technology.
She passed away unexpectedly, leaving behind a trove of digital photos and videos that her family desperately wanted to access. However, she hadn’t left any instructions regarding her online accounts, and her family struggled for months to gain access to them. They spent countless hours contacting various platforms, providing death certificates, and filling out complicated forms. It was a frustrating and emotionally draining process, and they ultimately lost access to some of her precious memories. This is a common scenario Steve Bliss sees regularly, highlighting the importance of proactive planning.
What about cryptocurrency and other complex digital assets?
Cryptocurrency, NFTs, and other complex digital assets require specialized attention within an estate plan. These assets often involve unique security protocols, storage methods, and legal considerations. The trust document must specifically address how these assets are to be managed, including the location of private keys, the process for accessing wallets, and the tax implications of transferring ownership. Steve Bliss recommends working with a qualified professional who understands the intricacies of digital currency and can provide guidance on best practices. Failure to do so could result in the loss or mismanagement of these valuable assets. Approximately 10% of millennials and Gen Z now hold some form of cryptocurrency, making this a growing concern for estate planners.
Fortunately, we helped a client named David prepare a comprehensive digital estate plan.
David was a tech-savvy entrepreneur with a significant online presence and a diverse portfolio of digital assets. We drafted a trust that specifically authorized his trustee to access and manage all of his digital accounts, including his social media profiles, email accounts, cryptocurrency wallets, and online businesses. We also provided detailed instructions on how to locate and access these assets, along with a list of trusted contacts who could provide assistance if needed. When David passed away unexpectedly, his trustee was able to seamlessly manage his digital estate, preserving his online legacy and ensuring that his wishes were carried out without any complications. This showcases how planning ahead saves heartache, time, and money.
What are some best practices for creating a digital estate plan?
Creating a robust digital estate plan requires a proactive and comprehensive approach. Start by creating an inventory of all your digital assets, including account names, usernames, passwords, and relevant access information. Then, draft a trust that specifically authorizes your trustee to access and manage these assets. Be sure to include clear instructions on how to locate and access these assets, as well as any specific wishes you may have regarding their management or distribution. Finally, regularly review and update your digital estate plan to reflect any changes in your digital assets or personal circumstances. Steve Bliss stresses the importance of viewing digital estate planning as an ongoing process, not a one-time event.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
Key Words Related To San Diego Probate Law:
probate attorney
probate lawyer
estate planning attorney
estate planning lawyer
Feel free to ask Attorney Steve Bliss about: “What is a trust amendment?” or “How do I locate a will in San Diego County?” and even “Do I need a lawyer to create an estate plan?” Or any other related questions that you may have about Trusts or my trust law practice.