The COVID-19 pandemic brought about many changes in 2020, including a drastic rise in the number of people working and communicating remotely. With more and more people working and living their lives online, the number of digital assets owned by people has also catapulted. A recent study estimates that the average American has over $55,000 in digital assets. As owning digital property becomes increasingly more necessary and common, the need to account for digital assets in an estate plan has become more important than ever.
Digital assets are any electronic records that you own, license, or control. This includes all of your online accounts (email, online banking accounts, social media accounts, digital photos and videos stored in the cloud, etc.) and any digital information stored on your phone, computer, tablet, or other electronic devices. Digital assets can have sentimental value (photos, videos, journals, etc.) or financial value (online bank accounts, online literary works, vlogs and blogs that produce revenue, etc.). Accounting for all types of digital assets in your estate plan is essential. If your estate plan does not properly account for digital assets, your family members and/or fiduciaries may be unable to access online financial accounts, turn off your social media accounts on a timely basis after your death, or retrieve priceless family photos or videos stored in the cloud.
The following are some of the obstacles that your family members and/or fiduciaries will face after your death if you have not provided the information and authority necessary to access your digital assets:
- Unknown Digital Assets – If you do not maintain an updated and comprehensive list of your digital assets, family members/and or your fiduciaries will have a difficult time determining what digital assets you had, and where they are stored.
- Unknown Usernames and Passwords – Almost all digital assets are password protected. If family members and/or your fiduciaries do not know your usernames and passwords, they will be unable to access information stored on your electronic devices or in your online accounts. Additionally, your family members and/or fiduciaries may be unable to turn off or delete your social media accounts on a timely basis after your death.
- Federal and State Laws – Federal and state laws prohibit unauthorized access to private personal data. Data privacy laws also prohibit online account service providers from turning over the contents of electronic accounts to anyone other than the account owner, unless the owner has given express permission for others to access it. These laws help protect against fraud and identity theft, but also make it very difficult for family members and/or your fiduciaries to access your digital assets and information after your death. As a result, this lack of access can make it difficult for your family members and/or fiduciaries to properly access, inventory, protect, and administer your digital assets after your death.
To avoid these obstacles, and successfully protect and pass on your digital assets after your death, it is essential that you properly address digital assets in your estate plan. Your digital-savvy estate plan should include the following:
- Provide Explicit Authority to Access Your Digital Assets in Your Estate Plan Documents – The first step to successfully protecting your digital assets is to make sure that your estate plan documents specifically authorize your fiduciaries to access the content of your digital devices and accounts. Your financial power of lawyer, will, and revocable trust should all include provisions explicitly granting your fiduciaries the authority to access your digital devices, accounts, and information. Your estate plan documents should also allow your fiduciaries to reset or recover your passwords. If you are not comfortable granting full access to all of your digital information, you can also provide specific instructions with respect to which information you wish to make accessible in your estate plan documents.
- Prepare a Detailed Inventory of Digital Assets – Once you have provided for access to your digital assets in your estate plan documents, you should make a detailed list of all of the digital assets that you own or control – your hardware, software, online financial accounts, email accounts, social media accounts, etc. Additionally, you should provide your usernames and passwords for each of these digital devices and accounts, and update the list of usernames and passwords on a regular basis. This detailed list of digital assets, usernames, and passwords should be kept in a safe place along with your estate plan documents. Creating a detailed inventory of your digital assets will make the administration of your estate much easier, as your fiduciaries will know what digital assets you have, where to find them, and how to access them.
- Contact Social Media and Email Service Providers to Determine Whether They Offer an Online Tool Allowing the User to Provide Directions for Disclosure to a Designated Recipient – Some social media and email service providers allow a user to provide directions for disclosure of digital assets to a specified third party, or “designated recipient.” If you have created an online tool granting access to a fiduciary, your estate plan documents should make explicit reference to the online tool to reduce any confusion or contradiction. It is also recommended that the fiduciary to whom you grant access to your digital assets in your estate plan documents be the same fiduciary you name in the online tools.
- Back Up Digital Data Stored in the Cloud – For digital data stored in the cloud, you should back up the data to a local computer, hard copy disc, or other personal storage device on a regular basis so that your fiduciaries have easier access to them.
As our work and personal life continue to be increasingly lived online, our use and ownership of digital assets will continue to grow. Accordingly, it is imperative that you account for your digital assets in your estate plan, so that those valuable assets are properly protected and passed on to your loved ones. To prepare a new estate plan, or to update an existing estate plan to include provisions necessary to protect your digital assets, please contact Estate Planning lawyer Jackie Luthringshausen at 847-705-7555 or
[email protected].
