Why is Power of Attorney Important?

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Why is Power of Attorney Important?

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You can conveniently utilize a power of attorney to delegate management of your digital assets to a trustworthy agent. If you are concerned and unsure about what will happen to your digital assets if you become incapacitated, you may also offer your agent login credentials and instructions on how to handle your accounts. 

Consider how much of your daily life you spend online. Your email accounts, online banking applications, and social media profiles are examples of these linkages. What about the Vimeo profile, Nextdoor account, your Audible subscription, and that six-year-old Tumblr blog? This list never seems to end.

Every day, the list of possible digital entanglements—or, to be more polite, digital assets—seems to get longer. If you become incapacitated, who will manage your digital accounts? You may have thought about what will happen to your digital legacy once you pass away. Perhaps you’ve even made preparations for the inevitable. 

But what if you become ill or injured and cannot handle your digital life for weeks, months, or even years?

You may (and ideally should) create a durable power of attorney by appointing a trustworthy person—known as your agent or attorney-in-fact—to take care of crucial financial and practical duties for you to prepare for the unexpected. 

Even a power of attorney does not guarantee your agent access to your digital accounts. The ability of your agent to handle your digital assets partly hinges on the State and county in which you reside. Still, it is determined mainly by the steps you take now to prepare for future incapacity.

Incapacity and State Specific Laws Regarding Digital Assets

Many states have recently enacted a law allowing the power of attorney agents to control digital assets. The law is known as the Revised Uniform Fiduciary Assets Act (RUFADAA). It states that if your agent has a power of attorney that expressly grants them access to your online accounts and electronic communications, they can do so. 

The catch is that the RUFADAA does not apply to powers of attorney in every State. A few states, notably California and others, have decided to leave agents out of the picture, allowing legal representatives access only after your death. The National Conference of State Legislatures’ website offers an excellent resource where you can locate your State-specific law on the matter.

Regardless of whether your State’s digital assets law includes powers of attorney, there are a few steps you may take to ensure your agent can do digital asset management on your behalf.

Digital Assets and Powers of Attorney

If you want an agent or someone else you can trust to handle all or some portions of your digital assets, regardless of where you live, your best choice is to:

Give an individual or an agent you trust the power to handle your digital assets with a durable power of attorney. Provide details on how to access the accounts you will want your agent to manage—usernames, passwords, and so on—in a separate document.

The second stage is critical because, even in places where digital assets are legal, agents still have to deal with corporations who purposefully refuse to provide access and account information. 

Giving your agents immediate access to your login details will make it easier for them to access your digital accounts during these years when the law is new and in flux. If you opt to provide your agent with your login information, keep it secure and tell them where to locate it if they need it. Also, remember to update your information as it changes.

You might also write your agent a message describing how you prefer to handle your digital assets. You may, for example, request that your agent reacts to specific sorts of correspondence, change the amount of your automated online payments to reflect any yearly increases in your bills, or delete your Facebook account.

Clocr’s Digital Estate Solutions is RUFADAA compliant. Sign-up with Clocr today and get all the help you need in creating an Estate Plan for your Digital Assets or Digital Estate Plan.