Digital Assets – Planning for Your Estate

Many of us feel a bit freer or feel relief after we have created an estate plan. The decisions on which family members will inherit your home, artwork, and money have been decided. But the outstanding question is whether all assets have been accounted for. I am specifically talking about digital assets. Although digital assets may not be tangible, they are still assets that should be designated to loved ones. If an estate plan does not account for digital property, family may have difficulty accessing and transferring them.

*This blog is for educational purposes only and should not be considered legal advice. The use of the Paths Law Firm website does not constitute a client-lawyer relationship.

What Are Digital Assets?

Digital property or assets are any assets online. With the advancements in technology, more people have assets online, including email accounts, social media accounts, PayPal accounts, and much more. Below is a list of common online assets. Many of these assets should be considered when working with an estate planning attorney (It is important to note, not all digital assets are transferable upon death).

Can I Just Give My Family the login to My Digital property?

The question of digital property and granting access to the property can be a touchy subject and at times a legal issue. Digital property is like a physical property because it can be passed down to whomever through an estate plan. However, the laws around digital assets are evolving, as well as the practices of social media accounts and other online platforms and search engines. Because of evolving laws, gaining access can pose challenges. There are four primary obstacles one may face when a family member dies regarding accessing their digital assets.

1. Login Information – If family members do not know the username and password to login to a computer, smartphone, online accounts, or cloud-based storage accounts they may not be able to gain access to that property. While there are ways to gain access in some cases, others may be more difficult depending on the login process and if data is encrypted.
2. Data Encryption – Data that is stored digitally may be encrypted. This creates a whole new set of issues regarding gaining access. Encryption can modify the data making it impossible to access without the passcode or proper credentials.
3. Criminal Laws – Both Federal and State laws are in place prohibiting unauthorized access to computers, personal data, and online assets. These laws are focused on the prevention of identity theft and fraud. Violations of these laws can be construed as criminal acts. For more information refer to the Stored Communications Act, 18 U.S.C. §§2701-2712, and the Computer Fraud and Abuse Act, 18 U.S.C. §1030). Federal laws that govern unauthorized access of digital assets may also limit a fiduciary’s ability to access a decedent’s digital property as well. Even if a fiduciary has access to the username and password for an online account, he or she may not legally have the right to access the information. To help fiduciaries gain legal access to digital assets, the Uniform Fiduciary Access to Digital Assets Act (UFADAA) has been enacted in many states, including the state of Missouri. This act governs access to digital assets
4. Federal Laws on Data Privacy- Most often, data privacy laws prohibit a service provider from giving access to online accounts or the contents of the accounts to any individual besides the owner. Because of this, accounts such as social media may be locked so the content cannot be accessed. Also, many service providers require the account holder sign terms of service strictly prohibiting the third party from accessing an account. The terms of service agreement may also exclude access to a fiduciary.

Digital Properties That Cannot Be Passed on Through Your Will

Many of your digital assets cannot be passed on through a will. This may be because they have no tangible or monetary value or because the decedent doesn’t have the legal right to transfer them. Assets not transferable are usually because the user agreement prohibits the transfer of the digital property to a new owner. Most generally, the value of non-transferrable digital assets is based on sentimental value. Some examples of digital properties not transferable are the following:

• Email accounts – While email accounts are not transferable, there are channels with most email service providers to gain access to a decedent’s accounts. One example is a Google email account. It is important to note a Google account holds more than just email. It may include documents on Google Drive, Google photos, or even funds in Google Pay. A family member can contact Google, when a loved one passes, to obtain all of the property i.e. documents, photos, funds, etc., by providing proof of death. Another option through this service provider is to use their Inactive Account Manager Tool. The owner of the account can specify what information is shared after they pass or after the account has been dormant for a specific period.ÂThis process allows an account holder to set up one or more account administrators. The last option would be to provide account information to log in to obtain the data. 
• Social Media Accounts – Like email accounts, Social Media accounts, are not transferable. However, many Social Media platforms have options allowing one to direct what happens to the account after the death of the account-holder. One example is Facebook. A Facebook account can be deleted or can set up designating who has the right to access the account by setting up a legacy contact allowing the account to be later managed by that individual.
• Domains – Many domain registrars and hosting companies have processes allowing a request to transfer ownership when someone dies. Each entity will have a different process however, for most they will require a copy of the beneficiary’s driver’s license as well as a copy of the death certificate.
• Subscription accounts (such as movie streaming) – – If there are subscription accounts needing to be handled, some service providers allow them to be transferred while others simply close the accounts with proof of death. Each service provider will have their processes and request information showing the subscription owner has died.
  

Digital Properties That Are Allowed Transferable Through a Will

The general rule for digital assets is if they have a tangible or monetary value, they can and should be included in your estate. This allows a planner the opportunity to determine how these assets are disbursed. Some examples are as follows:

• Bitcoin
• Digital music files
• Digital photos
• Frequent flyer miles (depending on the service providers policies)
• PayPal accounts
• Money due to you from online stores such as Amazon and Etsy

If a beneficiary is not designated for digital properties, they will pass on to residuary beneficiaries.  This is recommended for any digital assets owned. We should all review the policies and licensing agreements to have a better understanding of what can be transferred and what the procedures are to do so.

Estate Planning for Your Digital Assets

When planning for an estate, it is important to remember the executor may need access to digital assets. This is to ensure any outstanding bills are paid and to follow instructions on the disbursement of these properties. Because of this, it is important to include the wishes for all the property, including digital data. Be sure to create a list of all digital assets and include login information and instructions in writing on how these assets are to be managed or resolved.

When working with Paths Elder Law, Kansas City Estate Planning Attorney, we understand how important it is to cover all the bases. There may be priceless photos or documents in the cloud important to the family. Our staff will work with you to ensure nothing is left out and your plan is solid. If you or a loved one are ready to get started on planning your estate, contact Paths Elder Law. We are here to provide you with peace of mind in planning for the future.