When it comes to digital assets, it’s important to know that, unlike many assets, they leave little to no “paper trail.” Thus, unless your estate plan specifically provides for them, it may be difficult for your family to access these assets — or even know that they exist. Let’s take a look at how to properly address digital assets in your estate plan.
Inventory your assets
Make a comprehensive list of all your digital assets, together with website addresses, usernames, passwords and account numbers. These assets may include:
- Email accounts,
- Social media accounts,
- Digital photo, video, music and book collections,
- Online banking and brokerage accounts, and
- Online reward programs and points, such as credit card rewards or frequent flyer miles.
Be sure to provide instructions for accessing them, particularly if they’re password protected or encrypted. Store the list in a secure location and be sure your family knows where to find it. Consider using an online password management solution to simplify the process.
Authorize access
Providing your representatives with login credentials to access your digital assets is critical, but it’s likely not enough. They’ll also need legal consent to gain entrance to and manage your accounts.
Absent such consent, they may violate federal or state data privacy laws or, in the case of financial accounts, even be guilty of theft or misappropriation. It’s unlikely that the authorities would prosecute your representatives for unauthorized access to your accounts, but it’s advisable to ensure they have explicit authority rather than rely on their possession of your login credentials.
Follow federal laws
For digital assets that you own, such as bank and investment accounts, your estate plan can provide for the transfer of assets to your heirs. But many types of digital assets — including email and social media accounts, as well as certain music and book collections — are licensed rather than owned. These assets generally are governed by terms of service agreements (TOSAs), which typically provide that the licenses are nontransferable and terminate on your death.
Fortunately, there are laws that govern access to digital assets in the event of your death or incapacity. Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which provides a three-tier framework for accessing and managing your digital assets:
- The act gives priority to providers’ online tools for handling the accounts of customers who die or become incapacitated. For example, Google provides an “Inactive Account Manager,” which allows you to designate someone to access and manage your account. Similarly, Facebook allows users to determine whether their accounts will be deleted or memorialized when they die and to designate a “legacy contact” to maintain their memorial pages.
- If the online provider doesn’t offer such tools, or if you don’t use them, then access to digital assets is governed by provisions in your will, trust, power of attorney or other estate planning document.
- If you don’t grant authority to your representatives in your estate plan, then access to digital assets is governed by the provider’s TOSA.
To ensure that your loved ones have access to your digital assets, use providers’ online tools or include explicit authority in your estate plan. If you have questions on how to properly address your digital assets in your estate plan, please contact us.
© 2024