Digital Assets – What a Practical Planner Can Do! Presented by – Paul S. Viren, CLU, ChFC, AEP® Introduction of the topic of Digital Assets and how the average financial and estate planner can assist our clients and colleagues in navigating the complex world of digital assets.

What is a “Digital Asset?” Technically speaking, digital assets are any “electronic record” that you own, license, or control. Content – images, documents, files, media Access to personal information or accounts Some type of value – points, rewards, currency, etc. Records of information Passwords Defining what the client has for digital assets is important to determine the depth of planning needed for the client. Very few clients have no digital footprint and as financial planners and advisors we need to raise the issues of proper planning for the best interest of our clients.

Who’s Asset is it? Both During Life and at Death? Do we (or clients) have a right to the “property?” Some digital assets are the actual property of the client, like cryptocurrency – sort of. Other assets like media content, music and videos from artists, we are essentially leasing from the provider.

What we will learn today! Become aware of the issues and challenges of digital assets in estate planning What language in the estate planning documents are needed to address the digital assets? How do we prepare our clients and keeping us informed of their digital inventory? Become proactive in discussing with our clients (and ourselves) about their digital footprint. Helping keep clients digital data secure. Read the outline as described in preparation for more details

Computer Fraud & Abuse Act 1986 - CFAA The Movie War Games with Matthew Brodrick that almost started WWIII The Goal is to - Punish persons for accessing a computer without specific authorization Exceeding this authorization and taking forbidden actions Computer fraud of personal assets and information is rampant. Our clients, if serving as personal representative or attorney in fact, may find themselves in a situation where they may be looking out for the best interest of the estate or disabled person but may in fact be breaking federal laws in impersonating their family member or client.

Terms of Service Agreements – TOSA’s TOSA’s – will often prohibit anyone, other than the account holder from accessing the digital account! If you give a family member, friend, fiduciary access it still may be prohibited by the TOSA and thus a violation of CFAA. The TOSA is universal in the fact that we sign off on agreeing to the terms not knowing completely what the consequences are for the family. Once again, the representative may be violating the terms of the agreement and other federal laws.

Uniform Fiduciary Access to Digital Assets Act - UFADAA 2014 Act was designed to help responsible persons gain access to digital assets. The act allows access to digital assets just as if they were traditional property. The Service providers fought back hard claiming privacy of their clients information vital. The first round (UFADAA) of updated laws was designed to help relieve some of the challenges that CFAA imposed for managing digital assets. It was however hotly debated and the service providers did not like the change in their business.

Revised Uniform Fiduciary Access to Digital Assets Act - RUFADAA In September, 2015 the lawmakers revised the law to appease the online service providers The law DENIES access by default but may be overridden by the user through the estate planning documents with certain key “Trigger Words.” Not long after the updated (RUFADDA) was made into law which was more accommodating to the service providers as well as those persons and institutions that are helping their clients manage these digital accounts and assets. There are problems that remain today and undoughtedly there will be more changes to come.

Revised Uniform Fiduciary Access to Digital Assets Act - RUFADAA An executor no longer has authority over the content of electronic communications (private email, tweets, chats), unless the deceased person explicitly consented to disclosure. An executor can get access to other types of digital assets, but now he or she must petition the court and explain why the asset is needed to wrap up the estate. If a fiduciary does not have explicit permission through a will, trust, or power of attorney, custodians can look to the terms-of–service agreements to determine whether to comply with requests for access to a deceased person’s account. Custodians may: Request court orders; Limit their compliance by providing access only to assets that are “reasonably necessary” for wrapping up the estate; Charge fees to comply with requests for access; Refuse unduly burdensome requests. Custodians may not provide access to deleted assets or joint accounts. The financial and estate planner need to be aware of the complexities in navigating the digital world and help the client be well prepared for their future in the event of a disability or death.

What does a Practical Planner Need to Know? Review with clients their digital footprint – Inventory of their on-line accounts Categorize between accounts with monetary value and sentimental value Especially important for business clients as well as individuals Review with clients how are they keeping their information secure Step by step process of how best to start the process with your office and with clients.

If you want your executor or agent to have access: Leave your executor or agent information and instructions about how to access your accounts and files Write a letter or note Include access information and instructions. Secure your letter in a safe place. Keep your letter up to date These specific steps may seem simple and almost too basic, but without the signed letter of authorization granting the authority to a third party the service providers and holders of digital assets will have limited access to information.

Digital Assets – How to Access as a Fiduciary / Executor Assets with Monetary Value Banks Credit cards Reward programs Brokerage and Investment Cryptocurrency Digital Wallet You-Tube Pay-Pal, Square Employee Benefits Social Security The list of Digital Assets with Monetary Value – not inclusive.

Digital Assets – How to Access as a Fiduciary / Executor Assets with Sentimental Value Password management Facebook LinkedIn Snapchat Amazon – online retailers Travel E-mail Cloud based storage Medical Records Dating sites List of digital assets that have Sentimental Value – not inclusive

Who is granted authority? Spouse Business Partner Significant Other Children Guardian Attorney CPA Other? Who should be granted authority? Can it be a firm rather than a person?

Examples to learn from… Senior Client – Single, some signs of cognitive issues, children live far away… Business Partner – Each with varying skills. The CEO and person handling the “office” becomes disabled. What next? Husband and Wife – Do they have access to each others digital accounts? Simple examples and case studies to reinforce the need for proper planning and communication. Senior client – simple case study and fact pattern. Who should have the written authorization? Where should the letter be kept? Does it depend on the complexity of the digital footprint? How to communicate to the client and the family. Business Partner – giving specific authorization to the business partner to access important business information that each should have access to. Some service agreements are only for one person and not the client's business. Husband and wife – sharing digital information. In some situations clients do not want their spouse to have access – for a variety of reasons. How to make certain the authority for only the specific information is granted requires and inventory and specific authorization.

Best Practices – What do we need to do? Check list to discuss with the client to be prepared Inventory of Digital Assets Updating legal estate planning documents to include digital keywords Letter from account user to outline their granting permission to an authorized user. Communication to all parties that have a role in the planning Review security measures to protect digital information Review these best practices that should be added to the normal existing and new client protocol for annual reviews and client management.

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