The Estate Advisor’s Role under the Revised UFADAA

The disposition of digital assets after death has increasingly become a question of clients planning an estate. While some digital accounts hold cryptocurrencies or payment gateway assets, others are nonfinancial, yet equally or more valuable in terms of worth to beneficiaries. Accounts including online bank or brokerage accounts and other locked digital assets should be given special attention to ensure transferability of those assets to heirs or beneficiaries without probate at the time of an estate holder’s incapacitation or death. Since enactment of the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”)  of 2015, an estate advisor can assist a client in the creation of a directive with express instructions, identifying a representative responsible for their user access credentials once they are gone.


The Role of an Estate Planning Advisor

Estate planning advisors can assist a client in planning for transfer and administration of digital estate assets. Like traditional estate planning, an advisor, usually a licensed attorney, will provide legal advice and drafting of the necessary will or testamentary documents during the formation of an estate or trust. Under the RUFADAA, and estate planning advisor can assist a client in the assignment of a representative to administer their digital assets at time of incapacitation or death.


Steps to Estate Planning of Digital Assets

Planning enables an executor or other named representative acting as a fiduciary of an estate, to distribute the value of digital accounts to heirs and beneficiaries without the involvement of a court probate proceeding. Fiduciaries will have different levels of knowledge about digital account assets, and in some cases more than a single fiduciary will be necessary to properly administer, liquidate, or transfer complex digital assets (i.e. cryptocurrency in cold storage) to beneficiaries. Here are four basic (4) steps to estate planning of digital assets:


  1.     Advise a client to store usernames and passwords in an encrypted, digital format with multi-factor authentication security is recommended.
  2.     Estate planning of digital assets begins with cataloguing an inventory of accounts with user access credentials for future access by a representative.
  3.     Documented directive naming an estate representative with power of attorney to administer digital account assets will reduce complications of will or trust execution after a decedent’s death.
  4.     Record of custodial online tools available for management of user accounts with any instructions to override terms of service or other legal actions will expedite the estate execution process.


Exceptions to Fiduciary Access

An estate planning client may wish to restrict some digital assets from a named fiduciary, power of attorney or other representative. If an estate planning client requests nondisclosure of digital assets from a fiduciary, family member or other beneficiaries, an exception can be made in estate documentation, identifying a separate estate executor or other representative for administration of account content after they have passed.


Ask a licensed attorney specializing in estate planning and matters of probate litigation about transfer of digital assets to an estate.


Estate Law Attorney Practice

Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate law matter involving digital assets.      

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