Digital Assets

Who Will Inherit Your Digital Footprint in Texas?

Published on: December 27, 2023 | By Thomas W. McCulloch

Who Will Inherit Your Digital Footprint in Texas?

In 2024, the question of a decedent’s digital footprint is more relevant than ever. A digital footprint includes (but is not limited to) a person’s emails, texts, social media accounts, credit card accounts, cell phone data, and photographs – essentially, a digital footprint includes a wide array of personal information. As more questions arise about what will happen to this footprint upon an individual’s death, we look to Texas legislation, which has provided promising signs of progress.

Revised Uniform Fiduciary Access to Digital Access Act

In 2017, Texas enacted an Act, the Revised Uniform Fiduciary Access to Digital Access Act (sometimes referred to as “RUFADAA”), that dictates how an estate’s executor is able to access a decedent’s digital assets. Essentially, as long as the executor has valid legal authority and complies with each account’s terms of service, that executor can access the digital assets in question. There are certain restrictions under the Act – for example, it generally keeps the executor from accessing the decedent’s emails, texts, and social media accounts.

Importance of Digital Estate Planning in Texas

Published on: July 31, 2022 | By David W. Miller

In light of society’s ongoing reliance on technology, digitization of property, and additional advances in internet technology, the value of digital assets is evolving exponentially. As such, individuals must incorporate digital estate planning into their traditional estate planning process. An experienced Texas attorney can assist clients in ensuring that their estate plan is effective and comprehensive.

Digital Assets

Digital assets, in the context of estate planning, refers to any asset that exists only as a numeric encoding expressed in the binary form. These assets can exist in personal and business settings. For example, personal digital assets may include music, photographs, videos, and emails. In business, digital assets may consist of payroll systems, software, and customer service information.

Additionally, Metadata may contain information about the creation and owner of digital assets. However, it is essential to note that certain items such as computers, cameras, and cell phones do not qualify as digital assets.

Importance of Transferring Digital Assets

Historically, transferring property, assets, and cherished heirlooms has been the main focus of estate planning. However, taking into account the importance of digital assets in people’s everyday lives, transferring digital assets should be a critical aspect of any estate plan. Many unknowingly leave substantial amounts of digital assets unaccounted for after their passing. Failing to account for digital assets can result in losing items, such as photos and emails with sentimental and financial value.

Texas Estate Planning and Online Accounts

Published on: June 10, 2022 | By Thomas W. McCulloch

With more people than ever with personal information online, Texans may have questions about how to incorporate this information into their estate plan. Can another person take over their accounts after they pass away? Even if someone provides their account information to another, can they legally access the accounts? As people have different preferences over how their social media, email, and financial accounts are handled, the below information can be useful for Texans navigating the estate planning process. Planning ahead and updating this access and estate plans regularly can make life easier for loved ones after they pass away.

Revised Uniform Fiduciary Access to Digital Assets Act

Texas, along with other states, provides access to online accounts to a person’s legal representative if they meet one of two conditions, per the Revised Uniform Fiduciary Access to Digital Assets Act. First, the deceased must have activated a setting within their online account that allows disclosure of the account upon their death, or the deceased’s will must explicitly allow their representative to access their online accounts. Without either of these conditions, the representative cannot access the online accounts, even if they have been given the login information.

To meet the first condition—activating a setting within the online account—many social media platforms will allow individuals to name a “legacy contact,” which provides them with access to the account if the account holder passes away. However, it is better to include this information in an estate plan and be explicit about what accounts—be it social media, financial accounts or others—the estate’s legal representative can access.

Digital Currency and Its Effect on Texas Estate Plans

Published on: May 2, 2022 | By David W. Miller

Technology is constantly changing, and sometimes it is difficult to keep up with all of these futuristic alterations. One big technology that has gripped Texas—and the nation—is digital currency and assets. Because more and more people are getting involved in digital currency, the federal government has started to regulate and mitigate the risks of digital assets and their underlying technology. These pieces of legislation and regulations may be confusing to individuals just learning about cryptocurrency. Because of this, explanations to common questions about digital assets and their legislation are below.

What Are Digital Assets?

While the terms “digital asset” and “digital currency” have become more popular over the years, many individuals are still unsure of what these terms mean. Digital currencies are a form of digital money or monetary value. Similarly, a digital asset refers to financial assets that are issued or represented in a digital form through the use of a technology ledger. A digital currency, therefore, can be a form of a digital asset, along with cryptocurrencies, securities, derivatives, and other financial products. Digital assets can be exchanged across digital asset trading platforms. Digital assets have grown exponentially over the past few years: by November 2021, non-state issues digital assets reached a combined market capitalization of $3 trillion.

What Are Some Recent Laws Impacting Digital Assets?

One regulation that impacts digital assets was an Executive Order—entitled Ensuring Responsible Development of Digital Assets—recently signed by President Biden. The goal of this Executive Order is to create a national policy for digital assets by addressing the risks of cryptocurrency while also encouraging Americans to take advantage of its potential benefits. The Order directs various areas of the federal government, including the Justice Department, the Department of Treasury, and the Federal Reserve System among others, to study the legal and economic implications of creating a U.S. central bank digital currency. This would be a form of digital money with a national unit that has direct ties to a central bank.

How to Modernize a Texas Estate Plan

Published on: February 1, 2022 | By McCulloch & Miller, PLLC

As time goes on, society, life, and expectations change. One of these major alterations over the past twenty years has been the emergence and accomplishments of technology. While estate planning may not be the most noticeable area in which technology is relevant, technology has dramatically impacted this area and made estate planning accessible for more Texans than ever before. However, problems may also arise if people rely too much on this technology. Below is information on the current role of technology in estate planning and emerging technology in the industry.

The Current Role of Estate Planning and Technology

Estate planning can often be complicated and complex. Individuals have very specific needs and family dynamics that need to be represented in an estate plan in order for it to be effective. Technology—especially the internet—has been useful thus far to individuals wishing to create an estate plan; however, this information is often misapplied with devastating consequences.

How Holding Cryptocurrency Affects Texas Estate Plans

Published on: December 1, 2021 | By McCulloch & Miller, PLLC

With the emergence of cryptocurrency, many questions have arisen, including the impact of cryptocurrency on everyday life and the economy. However, whether someone has a small amount of Bitcoin or millions in cryptocurrency assets, many individuals do not consider how cryptocurrency assets should be incorporated into an estate plan. Incorporating cryptocurrency into an estate plan allows assets to be protected and ensures these digital goods are passed along after a person has died. Below are common questions and explanations about cryptocurrency and its role in the estate planning process.

What is Cryptocurrency?

Although the word “cryptocurrency” is used often, not many people know what cryptocurrency actually is. Cryptocurrency is a digital currency based on a network distributed across computers, and it is nearly impossible to counterfeit. Cryptocurrencies are decentralized, meaning they operate outside the control of governments. Bitcoin is the most well-known of the cryptocurrencies. Cryptocurrency is accessed through a private key, which is usually a password that only the owner of the cryptocurrency knows. Without knowing the private key, an individual cannot access, buy, or sell the money. Alternatively, some brokerage houses allow investors to purchase cryptocurrency through their existing accounts.

How Can I Incorporate Cryptocurrency into My Estate Plan?

Because cryptocurrency is digital, it is essential for individuals to include instructions in their estate plan on how to access these assets. Otherwise, if the person dies, the funds may be lost forever—or it may take years to regain access. Estate planning attorneys recommend including a list of all cryptocurrency assets an individual has, along with detailed information about the cryptocurrency’s private key and login information. This will allow beneficiaries to access digital assets and ensure they are not lost forever.

What to Know About Cryptocurrency, Taxes, and Estate Planning in Houston

Published on: September 9, 2021 | By McCulloch & Miller, PLLC

Information in this article is current as of the date of publication. The policies, regulations, and laws within are subject to change with the IRS, state, or federal legislature.

There’s no denying it: It appears that cryptocurrency is here to stay.

Once confined to hidden corners of the internet, cryptocurrency transactions are now accessible to almost anyone through popular payment platforms like PayPal. Even top financial advisors are now counseling investors who can afford some additional risk in their portfolios to invest in crypto. Indeed, earlier this month, El Salvador became the first nation to recognize Bitcoin as legal tender.

How to Incorporate Digital Assets into Your Estate Plan

Published on: May 20, 2021 | By McCulloch & Miller, PLLC

With the emergence of technology that becomes more and more a part of people’s everyday lives, it is important to keep these digital assets maintained for future usage. While people may not think about these assets—such as social media accounts, financial accounts, and emails—when drafting an estate plan, Texans should create a digital estate plan. This document identifies who should handle this information after the drafter has passed away and what to do with these digital accounts. Because this is an emerging area of estate planning law, below is an explanation of the steps Texans should take to create a digital estate plan with the help of an experienced attorney.

1. Make a List of Every Digital Asset

The first step in creating a digital estate plan is to make a list of every digital asset a person owns—this includes social media accounts, online banking accounts, and passwords to any website. As a part of this list, people should mark where the data is stored, whether online, on the cloud, or on a physical device, and their username and password for the accounts. This inventory will allow the executor—the person who will have access to the digital assets and follow the instructions according to the drafter’s wishes—to have all the relevant information at their fingertips.

How to Organize Digital Assets for Houston Estate Planning Purposes

Published on: December 18, 2020 | By McCulloch & Miller, PLLC

Individuals are normally told not to share their passwords with anyone for security purposes; however, there is one important exception. Individuals should make sure they have shared their passwords with a loved one, in case of their death. Doing so can be critical, as digital assets have become more and more prominent. People store important information online now, with no recourse if the person dies without giving someone else permission to access their digital information after their death. Below are some tips that individuals can use – either when crafting their Houston estate plan or afterward – to ensure their digital assets are not lost after their passing.

Creating a Digital “Vault”

Estate planning advisors will often tell their clients to create a drive or “vault” to store important documents and information. This can include estate planning documents, copies of personal identification, credit card information, and mortgage paperwork. Individuals should also include their digital login information and passwords too in this drive, so estate executors and loved ones have the ability to access it.

Managing Digital Assets in Your Houston Estate Plan

Published on: July 1, 2020 | By McCulloch & Miller, PLLC

Traditionally, a Houston estate plan has primarily focused on the distribution of tangible property upon a person’s death. However, now that we are firmly in the digital age it is important for everyone to consider how digital assets should be addressed in an estate plan. Digital assets and information include just about anything that is primarily accessed through a digital platform. Examples include social media accounts, email accounts, photos and videos stored on a computer or in the cloud, online banking and investment accounts, and even cryptocurrency.

How do Digital Assets tie into your Estate Plan?

It is important to spell out how such assets and information should be treated within an estate plan. Those who do not have a will leave their loved ones and estate administrators with no access to them. This could result in the permanent loss of data and information stored on an electronic device. With all of the memories we capture and store using our phones, that could be the equivalent of losing years’ worth of family memories. Perhaps even more alarming is the prospect of losing access to financial accounts that are primarily accessed through online banking. If an estate plan is silent about such assets, loved ones may have to put up with the headache and added expense of getting a court order just to access a decedent’s digital accounts and information.