Including Digital Assets in Your Estate Plan

What Are Digital Assets?

In an increasingly paperless world, it is crucial to account for digital property in the estate planning process. In your last will and testament, you will appoint a personal representative (or executor) to administer your estate after you pass away. Your personal representative’s first task is to marshal all of your assets. As more of our activities are conducted online, simply gathering documents and physical items belonging to the deceased person does not cover everything.

Digital property can be found in a broad range of places, including cloud storage services, online accounts, and storage devices like hard drives and USB flash drives. Digital refers to information stored in binary (i.e. ones and zeros), which can be processed by computers.

Types of digital property include;

• Media files like photos, videos, and music
• Any type of document, such as Word or Excel
• Digital artwork and graphics
• Websites, blogs, and domain names 
• If you own a business – client lists, software, intellectual property like copyrighted materials and logos, documents detailing business processes, data and analysis regarding the business, and so on
• Digital storefronts, such as on eBay
• Social media, networking, and other types of accounts
• Bitcoin and other types of cryptocurrency

Inventory Your Digital Life

Comprehensive estate planning now requires that you inventory of all your online accounts and digital property. Many people conduct banking and other important financial affairs exclusively online and no longer receive paper statements. It is also a good idea to include information about any recurring payments you make.

By providing an exhaustive list of your online accounts, you allow your personal representative to understand what you have and everything they need to address.

Access to Online Accounts

Until a few years ago, your personal representative might have run into problems legally accessing your online accounts. Even if you provided them with your username and password, they ran the risk of violating a company’s terms of service or being charged with hacking (or unauthorized access). Simply having the login credentials was not enough to grant them legal access.

Fortunately most states, including Maryland and Florida, have passed their own versions of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). These statutes govern how fiduciaries like executors, guardians, and trustees access digital assets from custodians (i.e. service providers like Apple, or Facebook).

The RUFADAA “does not presume that family members and fiduciaries can access digital assets because of their relationship with the account owner. Instead, the statute requires express authorization before anyone—family member or fiduciary—may access the content of a digital asset.” – Ryan Wibberley, Forbes.com

Under the RUFADAA, it is important to explicitly grant (or limit) a personal representative, trustee, or guardian access to your online accounts. Otherwise, a provider’s terms of service, which may state that the right to access your account is non-transferable and terminates upon death, may control.

Password Managers or Vaults

There are several online services, often called password managers or password vaults, that allow users to securely store all their passwords. The account is typically set up with a long and complex master password, which is required to gain access to the vault. If you use one of these services, it is important to plan how your personal representative can obtain your master password after your death.

For example, SecureSafe has an inheritance feature, and LastPass and Dashlane have Emergency Access features that allow users to designate a person who can request access to the account in case a user has died or is incapacitated. For important accounts that require 2-factor authentication to log in, you can generate backup codes for your executor to use. Many of the password manager services allow you to include notes along with the passwords you share, so these codes could be saved there.  

Your master password should be kept in a safe place, such as a safe deposit box. There are several ways to ensure your personal representative can gain access to the safe deposit box after you’ve passed away. The simplest is letting your personal representative or trusted loved ones know where the safety deposit box key is. You can also grant your personal representative access to the safe deposit box before you die. Some safe deposit box holders will allow you to designate a successor. State laws and safe deposit box holders’ policies vary, so it is best to consult a lawyer where you live.

No matter what security method you choose, it is crucial to let your appointed representative know how to locate important passwords after you die. Be sure to also provide them with access to your main phone and computer – since logging into those usually requires a pin or password. 

Handling Social Media Accounts

Each social media platform has its own user agreements and terms of services. For example, Instagram’s policy is that “the account of a deceased person can either be reported and then memorialised, or an immediate family member can request that the account be deleted.”

To make it easier for loved ones, many tech companies like Google and Facebook have created online tools within their platforms that allow users to plan ahead and direct what will happen to their accounts after they die. Facebook has a Legacy Contact option, which allows you to appoint a person who will have access to your account after your death.

Although their features are constantly evolving, here is a good primer on the policies of several popular social media platforms. Determine how each social media service you use addresses deceased users, then plan accordingly with specific instructions for how you would like each account to be handled.

Music and E-books

Music you have purchased through iTunes, Amazon, or Google, and e-books you have purchased on a Kindle or Nook, usually cannot be legally transferred to an heir the same way CDs or books can. Although your loved ones can access this digital content with your username and password, they may not have the license to use it. The terms of service often specify that the license to use the content is non-transferable, even after the buyer dies. Essentially, these services allow you to purchase a license to listen to music or read books, but that license most likely terminates upon your death.

DNA Test Results

In addition to providing your estate representative with login and password information, specify what you want done with your results. Some DNA and ancestry testing services allow you to appoint a beneficiary.

Bitcoin

Securely store your private key, as this is the only way to access your wallet. Let your family know how to access the private key, whether it is on paper in a safe deposit box, in a password vault, or hardware wallet. Some cryptocurrency services allow you to transfer funds to a designated beneficiary after a lengthy period of inactivity.

Finding an Estate Planning Attorney

As more aspects of our lives are managed and stored online, it is increasingly important to provide a seamless way for personal representatives to gather digital property and access online accounts. The best estate planning strategy depends on your unique circumstances and the laws that apply. If you have questions about how you can plan for the future, contact Bethany Shechtel, Esquire.