Today, virtually everyone owns (or licenses) digital assets, from email and social media accounts to digital photos and videos to online banking and brokerage accounts. Unlike traditional, physical assets, digital assets leave little or no “paper trail.”
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. Here are steps you can take to ensure your digital assets are known and accounted for properly.
The first step is to take inventory of these assets, which include, but are not limited to, the following:
- Email accounts
- Social media accounts
- Digital photo, video, music and book collections
- Online banking and brokerage accounts
- Payment services, such as PayPal or Venmo
- Cryptocurrency or nonfungible tokens (NFTs)
- Online betting accounts
- Blog or website content and domain names
- Online video channels, such as YouTube, that produce advertising revenue
- Online reward programs and points, such as credit card rewards or frequent flyer miles
Make a comprehensive list of all your digital assets, together with website addresses, usernames, passwords, and account numbers. For those stored on computers, external hard drives, smartphones, tablets or other devices, 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.
Keep in mind that many sites use two-factor authentication for added security. To log on to these sites, in addition to username and password, users will need a one-time code sent via text, email or an authentication app. To ensure your representatives have access to these sites, you’ll also need to be sure they have any passwords or PINs needed to obtain one-time codes.
Providing your representatives with login credentials to access your digital assets is critical, but it’s 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, may 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.
Revised Uniform Fiduciary Access to Digital Assets Act
For digital assets that you own, such as cryptocurrency or 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 license is nontransferable and terminates 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.
Turn to your advisor
If you rely on providers’ TOSAs, there’s a risk that these assets will be lost forever. Keep in mind that legal authority alone isn’t enough: You must also give your representatives detailed instructions, together with login credentials, for any assets you wish them to access. Contact your estate planning advisor for help addressing your digital assets in your estate plan.
Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.