How Will Pennsylvania’s New Digital Asset Law Effect Your Estate?
What are Digital Assets?
Most people in Pennsylvania have some sort of digital assets by now. Virtually every financial institution in the country now offers online account access, e-statements, and virtual transactions. The digital revolution has added tremendous convenience to consumers. This convenience has created some legal hurdles, especially when it comes to estate and trust administration. Some stock trading apps, or bank accounts are completely virtual with no brick and mortar locations. Acorn, Robinhood, and Capital One are completely virtual.
The Problem with Digital Assets and Estates.
It isn’t common for us to discuss in detail how much money we have and where we stash it. The best way to discover someone’s assets after they die is to go though their files and papers. An executor may begin looking through the person’s documents and there may not be one scrap of paper to alert the executor to an account or asset. This can lead to thousands of dollars of estate funds to go undiscovered and unclaimed.
Funds held by an institution like Capital One or Acorn are not considered digital assets. The login credentials, e-statements, and emails, however, are considered digital assets. Often these are the only clues to the location and value of these assets. With the younger generations having more of their life entwined with the digital world, some of their digital creations have real value. Digital art, video game accounts or items, and website domains are all examples of truly digital assets that can have real value.
The New Digital Assets Act.
In an attempt to address this problem Pennsylvania enacted SB 320 known as the “Revised Uniform Fiduciary Access to Digital Assets Act.” The new act gives executors access to online accounts and digital assets, and also allows for individuals to incorporate their digital assets into their estate plan.
The law gives digital custodians (Facebook, Google, Apple, etc.) the ability to create a method for the user to choose who can get control over the asset after they die. This would be different than just clicking through the terms of service. If there is tool created by the site or custodian then the estate planning documents can address this issue.
The custodian can ask for some documentation (e.g. power of attorney), to link the executor or agent under power of attorney to the account owner. One unique aspect of Pennsylvania’s law is that it prohibits the custodian from requiring a court order. This can be a huge burden for an executor and an expensive proposition for the estate.
As the demand for estate planning around digital assets grows, it is essential that your estate planning documents address these needs and consider the implications of your decisions. Traditional language in wills, trusts, and powers of attorney may not be sufficient to handle your digital assets properly.