By Alexander Bader, Esq.
As Elder Law and Estate Planning attorneys, we often provide legal advice to our clients centered on proper steps to take with regards to their assets to meet their estate planning goals. Two most common such estate planning goals are: (1) ensuring the asset can be properly managed should the client become ill or incapacitated, and (2) making certain that, upon the client’s passing, the asset goes where the client wishes for it to go as quickly and efficiently as possible.
When one thinks about his or her assets, the obvious items that come to mind are financial accounts (bank accounts, brokerage accounts, annuities, life insurance, etc.) and real property (houses, condos, etc.). However, there is another type of “asset” more prevalent now than ever before that can easily be overlooked when reviewing one’s entire asset picture: “digital assets”.
What counts as a “digital asset”? Under the law, a digital asset means an electronic record in which an individual has a right or interest. Some examples of “digital assets” are: login credentials for online bank accounts, email accounts, social media accounts (including postings on social media accounts, such as photos or videos), along with information stored on computers, tablets or phones, such as Word documents, PDFs and music. The digital assets may be stored on one’s personal device or by an internet company (e.g., Facebook) that serves as a “custodian” as to such assets. A company or individual serving as “custodian” carries, maintains, processes, receives, or stores a digital asset of a user.
In the past year, New York put forth new legislation to govern the administration of “digital assets” by someone other than the “user” during one’s life and upon their death. This legislation is New York’s version of the “Uniform Fiduciary Access to Digital Assets Act” (the “Act”), the substance of which has been adopted by many other states as well. Some features of this legislation are as follows:
- Before the new law, if you needed to manage a loved one’s digital account, you’d be on shaky legal ground accessing such an account depending on the circumstances AND your loved one would have had to keep good records regarding all of their passwords (I do not know many people that do this). Now there is certainty for all types of fiduciaries, such as trustees, executors, administrators, agents under a power of attorney, and guardians with regards to authority they do or don’t have based on the user’s preferences.
- A user may now direct the custodian of an internet account to disclose (or not to disclose) to a designated recipient some or all of the user’s digital assets. For anyone who uses Facebook, a practical example of such direction is the “legacy contact” feature that can be found under the Manage Account tab in General Account Settings.
Given that most people have computers, “smart phones”, and a social media presence, the Act gives all of us clarity, flexibility and additional control in an area of our collective lives that is growing by the day.
The contents of this article are in no way intended to be legal advice, are provided for educational and informational purposes only, and are directed only to those domiciled in the State of New York. Please feel free to call our office if you feel we can be of service to you in any manner. Our attorneys can be reached at Brady & Marshak, LLP, Attorneys at Law, (718) 738-8500.