If you think about it, most people have some kind of an “estate” that they need to plan for. In fact, with the amount of digital assets that most of us have on our computers or online, our “estate” can become quite significant.
For example, how much have you spent on iTunes since you began your account? Are all of those songs and movies worth something? Absolutely.
What about all of the pictures that you have taken and posted on Facebook or Pinterest? At the very least, there is significant sentimental value in all of those photos and thoughts recorded.
Websites like Facebook and Pinterest are the most common version of journalism that exist. Wouldn’t you like to pass all of those memories on to your loved ones?
If you think about it that way, you have much more of an “estate” than you might have thought. However, until recently, there has been little in the way of legislation that could help you preserve all of your online assets.
Current Nevada Laws
In Nevada, we have a law signed into effect on June 1, 2013 that gives the personal representative of a deceased person’s estate the power to direct the termination of any online account or similar electronic or digital asset of the decedent. This law allows individuals to cancel accounts that may be incurring charges; however, this law does not
address powers to access these accounts or copy the contents, and it only applies to personal representatives.
There are currently no laws in Nevada designed to protect an individual’s assets from being lost in cyberspace. When someone passes away, unless the correct login information has been saved somewhere accessible or passed on to those they want to have access to their accounts, the digital assets in those accounts are lost forever.
Contrast with Delaware’s Laws Delaware has traditionally been on the forefront of establishing new estate planning laws. In order to keep up with the precedent, Delaware has just passed a new set of laws that has pushed them ahead in the world of digital estate planning. This new law allows loved ones to access online accounts after that person’s passing.
The act called “The Fiduciary Access to Digital Assets and Digital Accounts Act” (HB 345) was signed into effect on August 12, 2014. This new law broadens digital access for legal heirs and closes one digital estate planning gap. The Delaware House Democrats have called this new bill the “first comprehensive state statute dealing with the disposition of a decedent’s digital assets in the nation.”
The major impact of the act is to carve out a procedure by which executors of a dead person’s estate can request access to any of the deceased’s digital accounts or assets. After sending a request that complies with the law’s requirements, a custodian for a digital service or account has 60 days to comply with that request.
So far, Delaware’s Fiduciary Access to Digital Assets Act is the most comprehensive law of its type that has been enacted. Some states have attempted to protect the deceased’s loved ones with “Facebook after death” laws; however, none have come close to being as comprehensive as Delaware’s laws.
Nevada is traditionally not far behind Delaware in enacting estate planning statues. So, it would behoove us to consider the terms in this new Delaware law and how it might also impact Nevadans as we contemplate the adoption of a similar law.
Delaware’s Digital Estate Planning Limitations
When Delaware’s digital estate planning law goes into effect on January 1, 2015 it will not be a perfect solution that will solve all digital estate planning issues.
Some skeptics feel that this new law may expose private third-party communications to heirs. The Delaware law in its current form does not take into account highly confidential communications to decedents from third parties who are still alive. For example, doctor records, psychiatrist communications and clergy confessions might all be exposed under this new law.
How You Can Plan Today Technology is ever evolving and the state laws must keep up with the changes in order to provide the proper amount of protection.
Technology is changing the way that we interact with people and conduct business. In the course of our daily lives valuable digital records are being kept in our smartphones, computers and website accounts. We will need to be proactive so that our loved ones and fiduciaries can access this data after our passing.
Given the state of today’s Nevada laws it is advisable that you make a list of all of your valuable or significant data, online accounts and digital property. This list should be kept with your Living Trust or Will. Make sure you indicate how your executors or trustees can find each item listed, how to access it and why it is something that would be valuable to them. You can also regularly back up all of your digital assets to a hard drive, flash drive or disc. These storage mediums can also be kept with your estate planning documents in a secure location.
Next, you should contact your estate planning attorney to include plans for your digital property in your estate plan. Be sure to include instructions on how you would like your digital property divided. This process may include preparing a Living Trust, a Will or a durable power of attorney (depending on your particular situation).
Planning for your digital property is one more aspect of estate planning that must be considered. In order to keep estate administration costs down, provide for a smooth transition and ensure that all of your valuable digital property is not overlooked, the proper steps must be taken.
Matthew Pfau has a background in business consulting, estate planning, business start-ups and bankruptcy and is licensed to practice in both Nevada and California. A partner in the firm Pickard Parry Pfau, he can be reached at 702-910-4300, through the firm’s website at www.pickardparryp.com, or email him directly at Matt@pickardparry.com.