Estate planning has become more difficult with the introduction of technology into every aspect of an individual’s life. Years ago, people filed away bank books, stock certificates, financial statements and most other important documents in a filing cabinet or a safety deposit box. When a loved one passed, it was more likely than not family members could gather all the deceased’s assets and financial records by dropping off the contents of the filing cabinet and safety deposit box with the family’s attorney. E-mail wasn’t invented or hadn’t been widely adopted. Bills were put in the mail and paid via check.
Fast forward to 2017. Financial statements, bills and most correspondence are sent via e-mail. Bills are auto-paid. Some people don’t even have a checkbook. Others use banking services with banks that don’t have an actual branch office. Photographs are taken with your phone and stored in the cloud. An individual could literally live a paperless life if they were so inclined, needing only their login to access their “digital assets.”
What is a “Digital Asset?”
“Digital asset” means an electronic record in which an individual has a right or interest. This could be word processing documents, audio and video files stored online, photos on a flash drive or stored in the cloud, e-mails, and text messages, among many other possibilities. Additionally, an individual could have several “digital accounts” – e-mail, social networking, social media, financial and bank accounts and a blog or website.
Why is digital asset planning necessary?
In the event of your death or incapacity, your loved ones may need access to your various online service providers (i.e., Google, Yahoo!, Facebook) to make sure bills are paid, to gather assets and notify others of your death or incapacity. However, some internet company terms of services restrict access exclusively to the individual who created the online account. A number of these companies include in their Terms of Service Agreement specific details on how the accounts will be impacted in the event of the death of the account owner. For example, Yahoo!’s policy pursuant to their Terms of Service is to terminate your account, permanently deleting all contents after they have been notified of your death. If you used Yahoo as your personal e-mail address and had your statements and bills sent exclusively to your e-mail address, your family may have a hard time gathering assets and paying your final expenses.
Recent news has highlighted the necessity for digital asset planning for grieving family members who have lost a loved one. A roadside bomb claimed the life of Lance Corporal Justin Ellsworth in November 2004, less than two months after arriving in Iraq. Justin’s family had frequent communication with him via e-mail while he served overseas and Justin was also keeping an online journal of his time in Iraq. When Justin’s father approached the e-mail provider for access to Justin’s e-mails, the company denied his request on the basis of privacy, adhering to their terms of service, denying survivors the rights to Justin’s e-mail account. The e-mail provider – Yahoo! Without a digital asset plan, Justin’s family had to fight a lengthy legal battle to recover access to Justin’s email account.
Unexpected events like accidents, illnesses, or even death can occur without notice, making it critical for loved ones to have ready-access to the information they need to assist you and carry out your wishes with confidence. No one wants to fight a legal battle to get access to a loved one’s documents while at the same time grieving for their loss. Follow this simple, four-step plan to make a difficult time easier for your loved ones.
Protect Your Digital Assets – Follow These 4 Steps
- Make a list of your digital assets and accounts. Use your list to also identify how to access each account, the type of account and what device you typically use to access the account.
[*HINT: Use our (Family Records: Quick Access Guide) as a start]
- Create a plan for your digital assets. Start thinking about what you want to happen and who you want to have access to these assets when you pass. For example, you may want your Facebook page turned into a memorial for well-wishers to offer condolences to your family rather than deleting your account.
- Choose a Fiduciary. Who can you trust to make sure your plan with respect to your digital assets will be carried out? This can be your personal representative, executor, agent, conservator or a trustee.
- Update your estate plan. Meet with your estate planning attorney to implement your plan in your estate planning documents and keep them in a safe location.
Still Have Questions? Contact your Advisor to discuss how they can help implement your digital asset plan!
Monthly Investment Review: April 2017
April provided investors very solid returns, continuing this year’s excellent performance from the stock and bond markets. The S&P 500 rose 0.9% this month. Global stocks rallied even more, as the MSCI ACWI gained 1.4%. The U.S. bond market, represented by the Bloomberg Barclays Capital Aggregate Bond climbed 0.8%. For the year, the S&P 500 is up 6.5%, the ACWI up 7.9%, and the bond aggregate has gained 1.6%
Market participants paid extra attention to global politics in April. The first round of the French elections point to a likely victory in the second round by Emmanuel Macron in early May. Macron is a strong supporter of the European Union and his likely victory provided some breathing room to European markets and contributed to the strong performance by global stocks.
Global economic growth should continue at a moderate pace. The International Monetary Fund raised its forecast for global growth from 3.4% to 3.5%, which would be the fastest rate of growth in the last five years. These positive expectations were dampened by a poor first quarter GDP report in the U.S. First quarter growth has been systematically weak in recent years and a rebound is expected in the latter three quarters.
The biggest risk we see in the markets is, paradoxically, excessive calm. There has only been one day this year where the S&P 500 dropped more than 1%. In 1996, there 17 by the end of April. Neither is normal, but keep in mind the investing seas are not always this calm.
 Revised Uniform Fiduciary Access to Digital Assets Act §2(10) (2015)
 Maria Perrone, What Happens When We Die: Estate Planning of Digital Assets, 21 COMMLAW CONSPECTUS 195 (2012)
 Id. 195-196.
This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Due to volatility within the markets mentioned, opinions are subject to change with notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Please note that neither CWM, LLC nor any of its agents or representatives give legal or tax advice. For complete details, consult with your tax advisor or attorney.
MSCI ACWI INDEX
The MSCI ACWI captures large and mid-cap representation across 23 Developed Markets (DM) and 23 Emerging Markets (EM) countries*. With 2,480 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
S&P 500 INDEX
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.