New Digital Asset Law Passes in Pennsylvania

The new PA digital asset law highlights the need to plan for your loved ones to have access to your digital assets after you pass.

More and more of our lives are lived online. We bank online, use email for everything, have Facebook, Twitter, Instagram accounts, keep photos on the cloud and have usernames and passwords for virtually every part of our online presence.  All of these things could be considered digital asset examples. However, what happens when we become disabled or die and our executor or a fiduciary needs to access these digital assets? Pennsylvania recently joined many states that have passed a law intended to make accessing these accounts easier, reports the Pittsburgh Post-Gazette in the article “New Pa. law recognizes digital assets in estates.”

The official name of the law is the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA. Pennsylvania is one of the last states in the nation—48th—to adopt this type of legislation, with the passage of Act 72 of 2020 (FYI Texas readers, the Texas legislature passed the Texas Revised Uniform Fiduciary Access to Digital Assets Act (TRUFADAA) in 2017). Until now, Pennsylvania didn’t allow concrete authority to access digital information to fiduciaries. The problem: the ability to access the information is still subject to the agreement that the user has with the online provider. That’s the “yes” we give automatically when presented with a software terms of service agreement.

Online service providers give deference to “legacy” contacts that a user can name if authority to a third party to access their accounts is given. However, most people don’t name a successor to have access or the successor is unaware of it, and most apps don’t have a way to do this.  I just this week received my first prompt from Facebook to name a legacy successor contact, and if Facebook is just starting that process, you can assume most other apps are far behind.

These laws are necessary because administering an estate with digital assets presents unique challenges.  With digital assets, first you have to locate the person’s digital assets (and chances are good you’ll miss a few). There’s no shoebox of old receipts, or letters and bills coming in the mail to identify digital property. The custodians of the online information (Facebook, Instagram, TikTok, Google, etc.) still rely on those contracts between the user and the digital platform.

Under the digital asset law, if the user does not make use of the online tool to name a successor, or if one is not offered, then the user can dictate the terms of access or non-access to the online accounts through estate planning documents, including a will, trust or power of attorney.  Most quality estate planning attorneys have included access to such assets in the documents they prepare, and we certainly do.

Here are some tips to help administer your digital assets:

Make a list of all your online accounts, their URL address, usernames and passwords. Share the list only with someone you trust. You will be surprised at just how many you have.  I did this a few years ago and was surprised to find it covered four pages.  You should also consider recording login information to your devices where you might store information.  Often people don’t keep paper records, so you can look for information on laptops, phones and similar devices.  Our estate planning binders actually provide a section to do exactly this.

Review the terms of service for each account to see if you have the ability to provide a name for a person who is authorized to access the account on your behalf, such as the Facebook example I provided.

Make sure your estate planning documents are aligned with your service contract preferences. Does your Power of Attorney mention access to your digital accounts? Depending on the potential value, sentimental and otherwise, of your digital assets, you may need to revise your estate plan.  This is especially true as our lives are likely to become even more digital in the future.

If you are interested in learning more on this topic, especially the practical components, Mary Galligan did an excellent article on this topic you can find here.  https://galligan-law.com/does-your-estate-planning-include-your-online-account-passwords/

Remember to never put specific private information in your estate plan such as account numbers, URLs, usernames or passwords, since your will becomes a public document once it is probated and your other documents may be shared as well. Your estate planning attorney will know how to best accomplish documenting your digital assets, while enabling access to them for your fiduciaries.

Reference: Pittsburgh Post-Gazette (Aug. 24, 2020) “New Pa. law recognizes digital assets in estates.”

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Covid 19 and Minor Children – Things to Consider Now

It's important to have a plan in place to take care of your minor children, if you are unable to do so yourself.
It’s important to have a plan in place to take care of your minor children, if you are unable to do so yourself.

Protecting your family is important, especially when you have minor children, and even more so now that we are living through a pandemic. With all of the unknowns of our current situation, you need some certainty. Having an up-to-date estate plan can be the first step toward providing that certainty in an uncertain world.

Many people view estate planning as limited to making arrangements for your death. However, it is equally important to plan for a time when you may still be alive but unable to care for yourself or your minor children.

Addressing the financial needs of you and your minor child

A revocable living trust can be a great solution for managing your and your minor child’s financial needs during incapacity. This planning tool enables you to name yourself as the trustee (the person or institution charged with managing, investing, and handing out the money and property) and allows you to continue exercising control over the money and property you transferred to the trust. The accounts and property are transferred to the trust when you change the legal ownership from you as an individual to you as the trustee of the trust. A trust also allows you to name a co-trustee or an alternate trustee to seamlessly step in, without court involvement, and manage the trust’s money and property for your benefit and the benefit of any other beneficiaries you have named in your trust if you become too ill to do it yourself.

In addition, when using a trust, you can specify when and how the funds should be used for your minor child’s benefit. You can provide instructions for certain expenses to be paid during a period of incapacity to ensure that your minor child is still being provided for in the same way you would provide for your child. Additionally, you can include a plan for how the money will be used upon your death for your child’s benefit. You can also state a time frame for when you think your child would be ready to manage his or her inheritance. Until the child reaches that age, the child’s inheritance will be managed by the trustee you choose. It’s important that you provide your child’s trustee with guidelines on what is important to you in terms of taking care of your child financially. If you leave your child’s inheritance to your child in a trust, the funds will be better protected from any future creditors or a divorcing spouse that your child may have.

An added benefit of utilizing a trust as part of your estate plan is avoiding the time-consuming and often expensive probate process that would otherwise be required. As long as you properly transfer your accounts and property to the trust, or make arrangements for the trust to be named beneficiary of your assets at your death, you will save your loved ones precious time and money during an emotional period.

Caring for your minor child

When planning for minor children, it is also important to consider who will physically care for them if you are unable to. If your minor child’s other legal parent is still alive and able to care for the child, the other parent will continue to provide care or will assume the day-to-day responsibilities of the caregiver. Nevertheless, it is a good idea to plan for what will happen if both of you are unable to care for the minor child, just in case. If you are the only living parent, or if the other legal parent is unfit to care for your child, however, it is crucial that you make the proper arrangements. While most people are familiar with the idea of naming a guardian for a minor child in a last will and testament, this document does not become effective until your death. Therefore, to properly plan for your minor child’s care during your incapacity, you need to consider naming a guardian in a separate writing.

Providing for your minor child’s care and financial security is an important undertaking with many important questions to consider. An estate planning attorney can guide you in making those crucial decisions and can put together a plan that will see that your wishes are carried out.

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Estate Planning and National Disaster Preparedness Month

National Disaster Preparedness Month reminds us to make sure our estate planning is up to date.
National Disaster Preparedness Month reminds us to make sure our estate planning is up to date.

The unpredictable can occur at any time: fires, hurricanes, floods, earthquakes, pandemics—you name it. Because September is National Disaster Preparedness Month, we want you to be prepared for whatever life throws at you. Although none of us can predict the future, there are some things you can do through proper estate planning to ensure that you and your family are ready. Here are a few questions to consider to help protect the people and possessions you value most.

 

  • Are your documents secure? When trouble occurs, your documents must be ready. It is therefore critical that your important legal documents be kept secure in a weatherproof safe or container. Likewise, documents regarding property ownership and identity should be stored away from exposure to dangerous elements such as fire, floods, and wind. When the dust settles, you will need your important paperwork and legal documents to help get you through difficult times.
  • Are your documents up to date? Consider whether your estate planning documents reflect your reality. One unfortunate but common mistake is the failure to keep important documents current. People often forget to periodically review and update their documents after receiving them. As a result, outdated estate planning documents frequently cause confusion because they describe a situation that is no longer applicable.
  • Do people know where to find your documents? As you try to prepare for the unpredictable, making your important documents accessible is crucial. Having plans in place are of little value if no one can find them. There are a number of ways you can provide accessibility without significantly impacting security. A simple option is to keep the original documents in your home in a location you have disclosed to another family member, and keep a copy of the documents at a location other than your home in case your home is inaccessible. You can also utilize technology to help provide accessibility by having digital copies available to you regardless of where you may be.
  • Is your insurance adequate and current? Insurance is a tool that must be monitored and maintained as your family and wealth change. In preparing for the unexpected, review your insurance policy to make sure it adequately covers you, your family, and your possessions in the event of a crisis. If you have previously witnessed natural disasters or emergencies, these experiences can provide valuable insight to help you ensure that your policies will protect you against the recurrence of these events. For example, because many of us who live in Texas have been negatively impacted by recent hurricanes and flooding, now may be the time to better understand, update, or upgrade their flood insurance.
  • Should you have a rider on your existing insurance policy? You may not be familiar with insurance riders, but incorporating riders allows you to customize and maximize your protection. Insurance riders provide additional flexibility and features to your current insurance policy with options that provide various levels of value depending upon your lifestyle and needs. For example, many policies offer a “waiver of premium” rider that creates a mechanism for continued payment of insurance premiums in the event you become disabled and are no longer able to make the payments. This means that your insurance coverage will not lapse due to your disability. Exploring the available rider options can ensure that you have customized a plan into something that works for you and your unique situation.

Disasters and emergencies are inevitable. National Disaster Preparedness Month reminds us that we can plan for any number of potential events, but we cannot always predict when or how they will impact us. By proactively asking yourself these questions, you will be better positioned to remain calm and focused in the midst of a crisis.

Learn more about updating your estate plan at https://galligan-law.com/when-to-update-your-estate-plan/.

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