Access and Control of Digital Accounts at Death
Updated: Jul 9, 2020
This post does not substitute for legal advice
Today, I’ve decided to talk to you about a sad subject: what happens to your digital accounts after your death. I often like to point out in estate planning presentations that Ben Franklin, Scarlett O’Hara, and Daniel Defoe (not the actor but the writer) have all stated in some fashion, “the only thing certain in life are death and taxes.” So because it is inevitable that death will happen to each of us, let’s take a moment to consider an issue that will only grow in importance in the years to come. Who controls your digital accounts upon your death? As more and more of us move our lives to social media accounts, email, and storing data on the cloud, this will become a vital issue in your estate planning process.
As you’ve probably guessed, the answer is not always clear. In a majority of states including Maryland, privacy laws, anti-hacking laws, and the digital service’s own terms of usage will often preclude your executor from gaining access to your digital accounts. You could list your passwords in your will (or in a notebook near the computer), but this will not solve the problem because again the same laws listed above still do not give your executor legal control of your digital accounts. In many cases, your estate’s executor will need to go to court and get a court order. This can create additional hassles that your loved ones probably do not want to deal with when settling your affairs.
State legislatures are beginning to wake up to this growing issue and are passing laws to allow for an executor to gain control of a deceased person’s digital accounts. Virginia has passed such a law, allowing executors the right to request access to the deceased’s digital accounts. Delaware’s General Assembly has recently passed such a bill, now waiting on the governor’s signature. The Maryland General Assembly has considered such legislation in the past, but as of writing this post, nothing has been enacted. Currently, the Uniform Law Commission, a body of members appointed by each state to help develop uniform state laws, is drafting a uniform law granting access to executors.
So why as an agricultural producer should you be worried about this? I’m guessing many of you already have email accounts and are utilizing your email as a filing cabinet much like I do with my work email account. You potentially have important business records stored in those email accounts that your executor may need to access to continue on the farming operation. At the same time, producers are poised to store more and more yield, input, and production data on digital cloud accounts with companies such as John Deere and Monsanto. We will avoid today the bigger issue of data ownership (do you own that data, does the data company, or do you both have some joint ownership rights?), but the ability to access that information will be important. Having laws in place to facilitate your executor and heirs’ ability to access this important data to keep the farm running is only going to grow in importance over the coming years.
Those of you utilizing a business organization structure, such as an LLC or corporate structure, may have a leg up until Maryland fixes this hole in the law. Setting up digital accounts in the name of the company would allow the successor to fully access the accounts upon your death. This would allow the child who plans to take over the farm to have full access to the farm’s digital accounts with fewer hassles. This is possible because the idea with a business organization is it can be continued on after the death of the owner, while a sole proprietorship (the business form used by 83% of all MD farms) ends at the death of the owner. You may want to discuss with your accountant and attorney the benefits which come with utilizing a business organizational structure besides just the potential to ease transfer of digital assets at death. This is potentially one fix in Maryland until the General Assembly changes the existing laws to allow for executor access to digital records.
For more information on Estate Planning for Maryland Farm Families, click here.