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It’s a digital world after all – Does your estate plan account for your digital assets? Here’s why it should

In today’s increasingly digital world, almost all of us have acquired a new form of property interest called digital assets.

Digital assets, which are separate from our physical possessions, consist of digital information or communications stored as data on a computer server and accessed via the internet. These assets can include email accounts, social media accounts, cloud-based storage accounts, digital photos, bank or other financial accounts, and cryptocurrencies such as Bitcoin.

Despite the widespread accumulation of these digital assets, Pennsylvania law until recently provided zero guidance for individuals who wished to transfer these assets upon their passing. Rather, access and control of these assets has been largely governed by the terms-of-service agreements existing between the individual and various private companies. These agreements are commonly referred to as “click-through” agreements and are the legal terms of service that almost everyone blindly agrees to by clicking the applicable boxes while creating an online account or utilizing the online services of a company. These terms-of-service agreements can create problems for the personal representatives of Pennsylvania account holders in the event they die or become disabled.

Fortunately, Pennsylvania recently passed Act 72 of 2020 to provide guidance to Pennsylvanians with respect to the ability of their designated fiduciaries to access or transfer their various digital assets. The act is formally called the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) and was signed into law by Gov. Tom Wolf on July 23, 2020. The law took effect in January of 2021. RUFADAA is designed to work in tandem with Pennsylvania’s existing laws concerning probate, estates, personal representatives, powers of attorney and trusts. In that regard, RUFADAA now provides a framework within Pennsylvania law whereby you have a direct say and control over access to, and transfer of, your digital assets.

This new framework under RUFADAA is strikingly similar to assets that you already own and manage, which can either be controlled by the express provisions of your will or trust, or through the designation of specified beneficiaries. In that sense, it is important for you to know that many of these private online companies, such as Google, Apple, Facebook, Yahoo, etc., actually provide what is called an “online tool.” This allows you to tell these companies, as custodians of your accounts, who can gain access or control of your account, including all or what information in your account those persons can access.

Therefore, much like a beneficiary designation on your life insurance or retirement account, you have the ability to expressly direct these companies as to the manner of control or access your personal representative has to your information, either upon your death or disability.

Of course, there are providers of online accounts that do not provide user-directed instructions through the use of an online tool. For those accounts, that is where the framework of RUFADAA comes into play. The law allows various estate planning documents that many Pennsylvanians currently have to go into effect for the transfer or control of their physical possessions and estate. In cases where there are not online tools or designated successors to users’ online accounts, RUFADDA expressly grants you, the user, the power to set forth instructions concerning your digital assets through the provisions of either your will, trust, and/or power of attorney. These documents override the provisions of the terms-of-service agreement between you and these private companies. This is critically important, especially if you wish to have your digital assets transferred or accessed in the same or similar manner as your other assets that you have already designated and provided instructions related to in your will, trust or power of attorney.

However, it should be noted that Pennsylvanians who fail to properly plan for the management or disposition of their digital assets may not be able to override the express provisions of the terms-of-service agreements between themselves and these private companies. The absence of an online tool or direction in a person’s estate planning documents may still result in limited access to a person’s digital assets or online information by their appointed fiduciaries. In that case, access can only be obtained through a legal process involving a court.

It’s a digital world after all. If your digital assets are just as important as the other assets you are passing on to your loved ones, it is important that you contact your estates and trusts attorneys. It may be time to consider an update to your estate planning documents, so that the provisions and protections of RUFADAA are properly incorporated into, and effectuated by, your existing estate plan.

Blake Birchmeier is an associate attorney with Conti Law practicing in the areas of business, estate planning and administration, trusts, elder law, nonprofit law, and transactional real estate matters. He finds satisfaction in helping both individuals and families plan for and navigate through unexpected events in life. Birchmeier received his J.D. from the Claude W. Pettit College of Law at Ohio Northern University in 2017 and a B.A. in history, with a minor in public history and museum studies, from Ohio Northern University in 2014.

Birchmeier is a licensed attorney in both Pennsylvania and Ohio. Since 2019, he has been a member of the board of directors for the Community Foundation of Greene County, Pennsylvania. He currently serves as the chair of the organization’s Marketing & Development Committee, as well as a member of the Governance Committee. Birchmeier is an avid golfer and enjoys spending time with his loving wife, Elissa, and their fluffy cat Sasha. He is also a loving son, brother, and uncle to a wonderful family residing in Ohio.