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Where’s my stuff? Digital Assets and your Estate Plan

“Honey, where did you put that frequent flyer statement/prescription list/photo from last week’s company picnic – you know… where do you keep our stuff?”

It used to be we would answer that question by pointing to a file cabinet, junk drawer, bookcase, or pile of papers: “Look over there.” But thanks to new technology, the answer is no longer that simple. Now, we might just as readily point to our laptops, tablets, or smartphones.

Our most important “stuff”, once tucked away in paper folders or as a series of codes on our desktop computer’s hard drive, now exists in accounts in the Cloud or on websites owned by private entities. So where, really, is our stuff?  Is it really “there”?  Increasingly, the answer is no.

It is hard to argue that even the most technologically resistant person can avoid accumulating digital assets. Tangible value assets may include airline miles and credit card points and rebates. Intangibles include photos, email and social media accounts, and creative works. These assets hold value, both real and perceived, and our personal legacies are made of both types.

Think about the sheer number of digital accounts you have and you’ll begin to see the scope of the challenge. What happens to assets that aren’t physically present (otherwise known as “digital assets”) when the owner of those assets passes away or becomes incapacitated?

Currently, your digital property and electronic communications are entrusted to custodians (companies that store the assets on their servers), and unlike physical assets, they are not governed by property law. Instead, digital assets are ruled by a Terms of Service Agreement with your various custodians, and such agreements almost always fail to address what should become of digital assets once the original owner is no longer able to access them.

As a result, it’s become critical to integrate conversations about digital assets in the estate planning process and to amend your Will, Trust, and Power of Attorney documents to give your designated agent the authority to direct or dispose of any and all digital assets. A Virtual Asset Instruction Letter lists all digital accounts, instructions pertaining to these accounts, and the name of the person or people designated to access them. Since most digital assets are not jointly owned, even a surviving spouse should implement this or a similar document to ensure their rights and access to digital property.

In an era of ever-developing new technology, we all need to develop a knack for seeing around corners if we want to protect ourselves from front-line fallout. As of March 2018, all but eight states have implemented acts that give a fiduciary the legal authority to manage another person’s property and specifically, the power to plan for the management and disposition of digital assets. Ongoing periodic reviews of your wealth planning process are also an integral part of our strategy at SYM.  If you have not yet addressed this issue in your own estate documents, we ask that you reach out to your advisor to start a discussion on this important topic.

Disclosure: SYM Financial Corporation (“SYM”) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about SYM, including our investment strategies, fees, and objectives can be found in our ADV Part 2, which is available upon request.

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