Most comprehensive estate plans center upon a revocable living trust. However, drafting and executing a detailed and thoughtful revocable living trust is only part of the planning process. Another key part is making sure that your assets are titled to your trust. This process of re-titling your assets to your living trust is often referred to as “trust funding.” You could have the most beautiful, precise, and detailed trust, but if it is not property funded, it will create the same unnecessary adverse consequences that you were trying to avoid by drafting your estate plan in the first place.
I often use the “eggs in the basket” analogy. Picture your trust as an empty “basket” and all of your assets as “eggs.” It is critical to put your “eggs” in your “basket” in order for your estate plan to function properly.
As I wrote in my last column, some “eggs” are more obvious than others. Most people can easily think about their checking and savings accounts, certificates of deposit accounts, brokerage accounts, stocks, business interests, and real property. Other “eggs” might be more abstract such as equity in club memberships or even your spot on the incredibly long waiting list for Green Bay Packers season tickets.
In the last decade, an entirely new category of “eggs” has emerged: digital assets. Digital assets include sent and received emails, email accounts, digital music, digital photographs, digital videos, gaming accounts, software licenses, social-network accounts, file-sharing accounts, financial accounts, domain registrations, Domain Name System (DNS) service accounts, blogs, listservs, web-hosting accounts, tax-preparation service accounts, online stores, online auction sites, online accounts, Bitcoin accounts, and other digital assets that don’t even exist yet!
Digital assets are sometimes referred to as the “new frontier” in estate planning. In the last several years there have been court battles over parents’ access to their deceased son’s email accounts and the ability of family members of a decedent to shut-down certain social networking sites. Although this is still a new area of the law, there are two key steps you can take to give your loved ones more control over your digital assets in the event of incapacity or upon death.
First, you should sign a document that assigns all of your right, title, and interest in your digital assets to your revocable living trust. The act of executing such an assignment should effectively transfer your digital assets to your trust, putting your virtual “eggs” in your “basket.”
Second, both your revocable living trust and your financial power of attorney document should include specific language that expressly gives your fiduciary the right to access, use, control, modify, archive, transfer, and delete your digital assets. The language should also expressly give your fiduciary authority over your physical devices – such as desktop computers, laptop computers, tablets, storage devices, and mobile telephones – as well as access and control of digital assets stored on the cloud.
Working with a qualified attorney to make sure that your estate plan addresses your digital assets can help to avoid unnecessary barriers and expense for your loved ones in the event of your incapacity and upon your death.
KRASA LAW is located at 704-D Forest Avenue, Pacific Grove, and Kyle may be reached at 831-920-0205831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney/client relationship. Before acting on any of the information presented in this article, it is essential that you consult a competent attorney who is licensed to practice law in your community.