They already ask about retirement accounts, but advisors might want to ask their clients about their social media accounts as well.

With the signing of the Uniform Fiduciary Access to Digital Assets Act on Wednesday, New Jersey became the 24th state to enact laws guiding control of a person’s digital assets, like social media accounts, after their death.

Under New Jersey’s law, fiduciaries, including executors or administrators of estates, court-appointed guardians, trustees and agents with powers of attorney have the same powers to manage digital or virtual property on behalf of a client as they do tangible assets.

“This law puts forth a hierarchy in terms of what happens when a person becomes incapacitated or passes away,” says Matt Sommer, vice president of Janus Henderson’s retirement strategy group. “Step one is whether the online asset provider offers some sort of mechanism whereby a user can appoint an individual to have access to their account in event of death or incapacity.”

The second level of the hierarchy is an account-holder’s will or trust, says Sommer. If a person isn’t able to or neglects to make an election with an online provider, then he or she can still address the disposition of digital assets via a will.

The final level of the hierarchy is the terms of service agreement signed by users when opening a digital account.

“Nobody reads these things, they just click ‘accept,’ but there may be verbiage in a provider’s terms of service agreement that dictate what happens to their account under certain conditions,” says Sommer. “Regardless, wills and trusts kind of become the ultimate backstop for how digital assets will be addressed in most cases.”

Digital assets typically refer to online accounts protected by log-in identification and passwords, such as e-mail, social media and message board accounts. Computer files, drop boxes and web domains are also considered digital assets.

While the law doesn’t directly require that financial advisors handle their clients’ digital assets, it may impact some accounts and assets that fall under an advisor’s purview. In some cases, online bank accounts and virtual currency accounts fall under the definition of digital assets.

Definition Of Digital Assets

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