The Digital Catch-22 in Estate Planning

If your wills, trusts, powers of attorney or advanced medical directives are more than two or three years old, you have probably created a nightmare for your spouse or loved one. Life has changed. Many things you do now are online—you bank online, you shop online with credit cards that you manage online, you make your medical appointments online, order your prescriptions online and are told when to pick them up online. Over the years you have signed up for an incredible number of online services and every one of them has a service agreement, the thing you don’t read, but click “I accept.”

Estate planning at one time or another is important to most of us. Whether you are worth millions or are of modest means, people want control of where their money goes. Most work a lifetime to acquire their assets and have strong preferences about where the assets go when they die.

Wills and trusts are used to control assets in death situations. Trusts can also be used during a person’s lifetime to administer assets for them in an orderly way or can be used to benefit others, such as children or charities.

If a trust is not used, powers of attorney are needed to empower others to handle your business matters when you are disabled by sickness or are unable to make decisions personally. Advanced medical directives are used to appoint people to make medical decisions for you when you are incapacitated.

There is one common thread related to all of these legal instruments—they require a person or entity (spouse, child, friend, bank or trust company) to act on your behalf when you are unable to act for yourself. People often choose their loved ones to act for them because they trust them implicitly. Some may have served in such capacity for their parents or others and know that performing such tasks can consume a great deal of their time and effort. All want to make it as simple as possible.

Going online has made life convenient; it brings the world to your doorstep. You are there and in charge. When you are not there because of disability or death, your agent—the person acting for you as executor, administrator, trustee, etc.—has to meet the requirements of the service agreements. Most service agreements will only accept legal instruments which have provisions in them regarding digital property. If your wills, trusts, powers of attorney or advance medical directives do not contain such digital property provisions, then your agent may likely have to go through onerous procedures to gain access to your accounts. Passwords, data, pictures, videos, anything stored in the cloud, your Facebook account, Twitter account and much more are all digital property. Some service agreements require you to designate in the service agreement who shall have access when you cannot act for yourself. Read the service agreement!

If you are a particularly organized person, keeping all your passwords in a password program and always keeping it up to date, and your wife of 50 years or child, who is your power of attorney, is good with computers and have the passwords, then access may not be a problem. But if a problem arises, they have to contact a real person about the account. When it becomes clear that they are not the account holder, then your education of them about your passwords and where they can find your information on the computer, tablet or handheld device is all for naught. The real person may very well deny access for failure to comply with the service agreement. The problem was not fixed—you have just delayed your agent’s nightmare.

Call your attorney and by a codicil to your will and/or amendment to your trust, add the digital property provisions. It is not hard to do. You do not need to redo the whole will or trust. For powers of attorney and advanced medical directives, which are simpler documents, it is easier for the attorney just to rewrite them. Don’t do it for yourself, do it for the one whom you have asked to help you when you cannot help yourself.

Eugene M. Elliott Jr. is an experienced attorney, who is a solo practitioner in Roanoke. Currently, he serves on the Virginia State Bar Executive Committee and Council.