We live in a digital world, with online platforms being preferred by people over traditional pen
and paper. Every piece of information can be stored and accessed through the Internet — and
this does not exempt a person’s assets. Online wallets, email records, social media, etc. are
becoming more and more utilized, which poses a challenge to estate planning.

Key Discussion Points

Attorney Philip Ruce of Stone Arch Law Office spoke with KSTP to talk about digital estate
planning and share professional tips on how to plan digital assets so they are safe, accessible,
and included in the management and division of an estate.

The Challenge in Digital Assets

A single person can have a lot of different accounts online, from their social media to their online
banking profiles. Autopay accounts, online wallets, and cryptocurrency have also been
developed, which contain assets with actual value. All of these are protected by passwords, with
some even going as far as having data encryption.

Only the account holder has access to these accounts and the information or assets that they
hold. And that is precisely how it becomes a problem in estate planning. Upon the account
holder’s death, their loved ones will not be able to access these online accounts on their behalf.

There can also be criminal issues involved in doing so because they don’t have the rights to
these digital platforms.

How to Plan Digital Assets

Digital assets and accounts are just as important as physical property such as a house or car,
for example. They should form part of an estate plan. Attorney Philip Ruce shared three things
individuals need to do to ensure that their digital assets are accounted for and can be accessed
and divided when the time comes.

Keep an Inventory of Passwords and Accounts

In traditional estate planning, an individual would need to have an account of their assets. They
need to list the properties they own, where their money is, what types of bank or retirement
accounts they have, etc. The same should be done when it comes to digital assets.

Individuals should have an inventory of their online accounts and digital assets, as well as their
passwords. They can have it in a notebook, a spreadsheet, or software like Lastpass and
Dashlane to manage their login information. Also, things like security questions and two-factor
authentication should be considered.

Of course, standards of safety should still apply, but having this inventory will allow trusted
people and loved ones to access these accounts come time to divide the assets.

Make Sure There’s a Digital Executor

Similar to a personal representative or executor that’s appointed to manage an estate, there
should also be a digital executor who will be in charge of accessing and managing online
records. However, the digital executor will be a little more informal because they cannot
distribute the assets.

Their only role will be to access digital records. Even so, the digital executor should be someone
who is trusted, such as a family member. If no digital executor has been selected, there are
statutes in Minnesota that allow the executor or personal representative of a will to access
digital records on the owner’s behalf.

Consult With a Professional

The process of accessing digital records is a complicated one that adds to the overall
complexity of estate planning. Technology changes so fast and laws are lagging behind
technological developments. There is nothing solid in place that helps the courts govern digital
assets, so these things are played out by ear.

Talking to and coordinating with an attorney will help an individual put a plan in place for their
digital assets and ensure that the process of accessing and dividing them will be seamless.

Read the Full Interview Below

Interviewer:
Well, I found this out when my father passed away in 2012, there’s a lot to do for loved ones left
behind. Now some of the obvious things, like mortgages, cars, and credit cards, but something I
definitely didn’t prepare for, and I’m sure others are in the same boat, was trying to get online
access to bank accounts, passwords, and so many things. They now live solely on a computer.

Interviewer:
Estate planning attorney Philip J. Ruce from Stone Arch Law has some strategies to help
protect our digital lives. He joins us now this morning. Philip thanks for being with us.

Philip J. Ruce:
Thank you so much for having me back. It’s good to see you both today.

Interviewer:
So talk a little bit about this digital estate planning. I mean, we know what estate planning is.
You kind of mentioned it in the intro. Digital though, it’s not new, but it is something kind of new
when you talk about planning.

Philip J. Ruce:
Absolutely. And it’s becoming a bigger and bigger deal. When we think of traditional estate
planning, we’re thinking about the house, and the money, and the bank accounts, et cetera.
This is going to be similar, but we’ve got some additional obstacles.

We’ve got all these passwords, and we have digital encryption. And sometimes, if folks aren’t
careful and they try to access this information the wrong way on someone else’s behalf, there
can be some criminal issues there too.

If you think about all the things you have online, you have these email addresses. If you own the
rights to a website or a URL or many of them, in some cases, all of our online bank accounts, all
of our social media accounts like you said, there’s a lot of new things coming about. And also,
what about family videos and family photos that are stored online. We need someone to
download those before they disappear.

Interviewer:
Right? And things that just pop in my head like autopay. So many people have signed up to
have the money taken out of their account automatically. That’s something you don’t think of.
Somebody passes away that money is still coming out of there.

Philip J. Ruce:
Absolutely. And you brought up a really interesting statistic, which is that two and a half million
people who have passed away have had their information used fraudulently. When I was talking
to somebody about this topic last week, they just mentioned casually, “I had an uncle who
passed away a couple of years ago and I started getting friend work requests from him.” And
that obviously was information that was taken, but that’s alarming. Right?

So we want to make sure not just when it comes to fraudulent information, but that practical
aspect as well. We have all these utilities that are being paid online. What happens if somebody
gets a hold of a credit card and it’s just on autopay out of that bank account. These heirs, these
people who are supposed to be getting money from the estate, that’s going to be noticeable, but
not right away.

Interviewer:
So Philip, how do you start? Where do you start? Because even just hearing you discuss it can
sound pretty overwhelming.

Philip J. Ruce:
It can feel that way. There are three things that I like people to talk about. The first one is taking
an inventory of passwords and accounts. The second is making sure there’s a digital executor.
And the third is to make sure you’re consulting with a professional.

So when it comes to that inventory of passwords and accounts, similar to traditional estate
planning, how we’re going to get an idea of what is it that we have out there? What kind of
property, what kind of money, what kind of bank accounts, retirement accounts, et cetera, do we
have out there? We want to make sure we have a list of our accounts and if possible, our
passwords.

The average American has something like 100 passwords that they track. If you’re watching
this, you probably already have some list that you’re creating. Whether it’s a notebook, whether
it’s an Excel spreadsheet or something like that. So you’ve probably got a head start on that.
Make sure that’s updated, make sure it’s complete.

The standard warnings apply as far as making sure that it’s safe. Right? But also we have a
couple of other concerns. We’ve got some of these common security questions that people
might have to answer. But also what happens with all this two-factor authentication. Have you
ever logged into something from a new device or you have to change a password and they want
to send you a code. Where does that code go? It goes to a cell phone, or it goes to an email
address. What happens if someone needs the code to get into the email address?

Interviewer:
And you can’t unlock that stuff. Legally you can’t unlock any.

Philip J. Ruce:
Absolutely. It’s incredibly problematic. So we want to make sure we’re keeping an inventory of
that. There are software programs available. There’s for example, Lastpass and Dashlane are
two that I see pretty regularly. I don’t get anything from them. It’s just something I see a lot. And
you can just remember one master password and it will remember all your passwords for you.
That can be really helpful. Not only that, I can tell you that on the software I have. I have my wife
appointed as a trusted contact so she can contact them and say, “Hey, I need this master
password.”

I’ll get a notification. If I don’t answer in 10 days, because I can’t, she’ll get that master
password. And then she’s off to the races.

Interviewer:
So to name somebody a digital executor, is that something they’d need to see an attorney for?
Or is that something they could handle on their own?

Philip J. Ruce:
So a digital executor is going to be a little more informal than an actual personal representative
or executor that’s appointed by a judge. This is your point person who can access online
records. This person is not allowed to distribute assets. So this wouldn’t be somebody who
takes your online currency or some of your digital currency and doles it out. But we want
someone who can access these things, these digital records.

This should be someone that you trust, of course. And if you don’t have someone like this, who
you want to name separately, there are statutes in Minnesota that allow the executor, the
personal representative, to actually access this stuff on your behalf. If you work with our team,
we really do empower them specifically in the will document to be able to do this. So they can
track down this stuff and make sure things go where they need to go.

Interviewer:
So people can do a lot of this on their own though. At some point, they do want to reach out and
consult a professional on this. Right?

Philip J. Ruce:
Absolutely. There are some things when it comes to that digital executor. For example, there
are some companies like Facebook that allow you to name a point person. I think they call it a
legacy contact who can kind of shut that stuff down. Make sure these people are listed
appropriately, absolutely people can do that.
One of the biggest issues with online information in the court system is just that if there’s no
plan there, then we’re kind of making it up as we go. Nothing changes faster than tech. Our laws
change. They change slower. But the interpretation of how we do this stuff is changing every
day. So I would talk to a professional and make sure that you’re at least coordinating this the
way that you have to. You haven’t missed something because you probably have honestly.

Interviewer:
Before we go, for anybody out there who may be into crypto. I’m assuming there’s a whole
nother level of weirdness to deal with that.

Philip J. Ruce:
Right? So now we’ve got this combination of not just something that’s online, that lives online,
but it actually has quite a bit of value, potentially. One of the issues we’re running into here. So if
you go to a traditional bank account or equities account, like a brokerage account, you can
name a pay on death beneficiary, someone who gets that money.

Companies like Coinbase haven’t gotten around to that yet. These are places that house this
sort of asset, which means it’s going to go through probate. These assets are subject to
creditors. They are part of the estate, so if you say everything goes to my kids, well, that’s where
it’s going to go. So if you get that out of the estate, outside of the probate process, kind of
unofficially, it can be really problematic. So that has to be incorporated directly into the will.
Incidentally, I’ll add one extra thing. Don’t take these passwords or password keys for your
crypto or anything else and put them in the will because that is a public document. It goes
through the court system. Very important. That’s the other thing.

Interviewer:
Philip, thanks. Every time you’re here. I think we could keep going on for a whole show. Thank
you so much.

Interviewer:
Well we appreciate your time today. Good to see you.

Interviewer:
Valuable information.

Interviewer:
And we posted the contact information for Philip and the team at Stone Arch Law at
Minnesotalive.com if you want to check him out.