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Bar Association of San Francisco Member Benefits: Publications

Estate Planning for Digital Assets

 

By John E. O’Grady O’Grady Law Group, APC

 

“Technology is dramatically changing the way we trusts and estates attorneys practice law…and the law we practice. Our old models of marshaling assets in probate and trust administration need a major face-lift,” explained Stephen Wu, a partner in Silicon Valley law firm Cooke Kobrick & Wu LLP, in his riveting and essential “Marshaling Assets in the Internet Age” discussion on March 14.

Our clients live in the Internet Age — and everything from their financial accounts to their social accounts (like Facebook or online photos) to the files stored on their computer and their handheld ‘digital wallets’ need to be effectively, which means often means ‘quickly’, rounded up by fiduciaries, upon the incapacity or death of the principal, with the advice of counsel. But current published guidelines for marshaling assets simply don’t do enough to address—and in some cases incorrectly address—how we should handle digital assets. This opens up room for confusion, increases attorney workload and even puts us at risk for a malpractice lawsuit.

For instance, in a recent Florida case, the post-death handling of electronic information is becoming a central issue. Children of the decedent are seeking sanctions against representatives of his deceased second wife, because she deleted software from the family computer, and her representatives viewed information on it without preserving it in a forensically sound manner. (See In re Estate of Nelson McLeod, No. 2006-CP-001186-NC, Sarasota County, Florida).

Trusts and estates attorneys need to employ new models of estate planning and administration to avoid these considerable risks to ourselves and our clients. We must now include online assets, electronically stored information, privacy concerns, and more considerations from the date of the initial client meeting to the close of estate administration. We must counsel fiduciary clients to consider using a professional forensic expert not only for reviewing computers and data, but also to ensure that this information
is preserved for reason-ably foreseeable potential litigation. We must also check for and consider all online accounts, even those with just sentimental value, and counsel for the effective preservation and recovery of all account information.


 

John O’Grady, O’Grady Law Group, APC, is the Chair of BASF’s Estate Planning, Trust & Probate Law Section. Email john@ogradylaw.com to learn more about how to include the changing digital landscape in your estate planning practice.

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