Estate Planning in a Digital World: What Connecticut Residents Need to Know
Let’s face it—our lives have gone digital. From online banking and cryptocurrency to family photos stored in the cloud, much of what we own now exists online. But here’s the problem: If something happens to you, will your loved ones be able to access these digital assets? Without proper planning, your family could face unnecessary stress, legal hurdles, or even lose access to valuable accounts and memories.
For Connecticut families, digital estate planning isn’t just a good idea—it’s essential. Let’s break down what you need to know to protect your online legacy.
What Counts as a "Digital Asset"?
Digital assets include anything electronic that you own or have rights to. These can be grouped into four main categories:
Financial: Online banking, investment accounts, PayPal, Venmo, cryptocurrency, and credit card rewards points.
Business: Domain names, client data, intellectual property stored in the cloud, and online store accounts.
Personal: Photos, videos, emails, text messages, and medical records stored digitally.
Social: Facebook, Instagram, LinkedIn, TikTok, and other social media profiles.
Why Digital Assets Need Special Attention
Digital assets don’t play by the same rules as traditional ones. They’re governed by terms of service agreements, privacy laws, and platforms’ policies, which can make access tricky—even for your executor or family members.
For example, simply sharing your passwords with a loved one might not be enough. In fact, it could even violate the platform’s terms of service or privacy laws. Without proper legal permissions, your family could be locked out of critical accounts or face legal challenges when trying to access them.
How Connecticut Laws Affect Digital Estate Planning
Connecticut follows the **Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which provides a legal framework for accessing digital assets. However, this law requires explicit authorization in your estate planning documents. Without it, your loved ones could face significant hurdles.
Here’s what you need to know.
Power of Attorney and Digital Assets
One option is to use a power of attorney (POA) to grant access to digital assets. Keep in mind that the POA needs specific language to be effective. A standard POA might not be sufficient for digital assets. Many people mistakenly assume it’s enough to broadly grant their agent the power to manage their financial and legal affairs. It’s not. There are certain statutory powers that require explicit authorization and digital assets fall into this category. Connecticut follows the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which requires explicit authorization for digital assets in your POA document.
Your POA should include language that:
Explicitly mentions digital assets.
Grants authority to access, manage, control, and distribute those assets.
References electronic communications (emails, texts, etc.) if you want to grant access.
Overrides any terms of service agreements that might restrict access.
Without this language, service providers may refuse to grant access—even to someone with a valid POA.
Trust-Held Digital Assets
A trust is a great way to allow others to manage assets on your behalf. You can certainly do this with digital assets, but its a bit more nuanced than when dealing with traditional ones. Simply naming a trustee doesn’t automatically guarantee access to those assets. To ensure your trustee can manage your digital assets, your trust document should:
- Explicitly authorize the trustee to access and manage digital assets.
- Include instructions for transferring digital assets into the trust during your lifetime.
- Provide proof to service providers that the assets are trust property.
Many service providers require additional documentation beyond the trust certificate, so it’s crucial to plan ahead.
3 Steps to Protect Your Digital Assets
Ready to take action? Here are three steps every Connecticut resident should follow to safeguard their digital legacy:
1. Create a Digital Asset Inventory
Start by making a list of all your digital assets, grouped by category (financial, business, personal, social). Include usernames and account information—but don’t include passwords in this document. Instead, store passwords securely in a password manager or a sealed document in a safe.
2. Update Your Estate Plan
Ensure your estate plan explicitly addresses digital assets. This includes:
Granting your executor or trustee legal authority to access and manage your digital assets.
Specifying who should have access to which accounts (e.g., financial accounts for your executor, but not personal emails).
Including language that complies with Connecticut’s RUFADAA laws.
3. Review and Update Regularly
Your digital life is constantly evolving. New accounts are created, old ones are forgotten, and your wishes may change over time. Review your digital asset inventory and estate plan every couple of years—or whenever a major life event occurs.
Don’t Leave Your Family Guessing
Imagine this: Your family is already grieving your loss, and now they’re locked out of your online accounts, unable to access critical financial information or cherished photos. This is the reality for many families who don’t plan ahead.
By taking these steps now, you can protect your loved ones from unnecessary stress and ensure your digital legacy is handled according to your wishes.
Let’s Get Started
Digital estate planning doesn’t have to be overwhelming. As a Connecticut estate planning attorney, I help families navigate the complexities of protecting their online assets. Let me help you create a plan that covers everything—online and offline. Set up a consult in my Wilton office or we can chat over Zoom.
