By The Wyoming LLC Attorney TeamJun 14, 2022
This article emphasizes the importance of including digital assets in your estate plan, covering hardware and data. It highlights the need for careful organization and providing steps to manage digital assets effectively. The article also mentions the evolving legal landscape around digital assets. Consultation with a knowledgeable attorney or online service provider is recommended when creating a digital estate plan.
If you look closely at your digital assets - and everyone should - you will likely find that your online accounts are worth quite a lot. And if you’re like most people, you can probably identify an heir you want to have the things you wrote or pictures you have taken of those you love or memories you have made.
However, as you put together an estate plan , there is an overarching question you must ask about everything you own, including your online accounts and the data stored on your smartphone, your tablet, or your social media and/or cloud accounts. If something happens to cause your death or disability, what happens to all of those digital assets?
With this article, we will discuss the best ways to include those digital assets in your overall estate plan. After all, your estate plan must include any digital assets you might own. It is just as important to make sure your will's executor knows exactly where to find your important digital assets as it is for them to know where to find the title to your car and your bank account information if you plan to leave those assets to a specific heir after you're gone.
That means you have to provide them with the information they need to access information on your computer and online accounts. If you have a financial power of attorney to allow someone to handle your affairs in the event of your incapacity, you need to ensure that your agent can obtain access to this information. That person is your digital executor.
The term "digital asset" refers to both hardware and data:
This includes equipment such as computers, external hard drives, flash drives, tablets, phones, e-readers, digital cameras, and digital music players. In many cases, such items may have monetary value separate from the data stored on them. In those cases, they will be considered part of the "probate estate."
This doesn’t just include data stored on your own hardware, but also the data you have stored on third-party servers. These can include:
While you may have online access to bank accounts, credit card accounts, brokerage accounts, and other financial accounts, for estate planning purposes, the underlying accounts are the real assets contained in those accounts.
That said, however, your digital fiduciary will need the information necessary to access these accounts. As for email and social media accounts, each company has its own rules and regulations when it comes to closing an account when the account holder dies or becomes incapacitated.
Because every company does it differently, closing these accounts, especially social media accounts is often a complicated and time-consuming process that usually involves sending legal documents like a death certificate and/or court documents to the company to the company. In most cases, the terms of service
prohibit the transfer of an email or social media account to another person, or allowing someone else to use your login information and full access to the account. However, if you provide that information to your digital fiduciary, they can more easily access and close the account. The company may also automatically delete an account after a certain period of inactivity.
In estate planning law, the person you designate in a will to handle digital assets is called your digital executor. A person who is given a power of attorney (POA) is called an agent. The general term, "digital fiduciary," covers both people as part of your estate plan. There is currently no federal law governing the designation or duties of a digital fiduciary, although as fast as the digital realm is changing, that could shift at any time, given the growing focus on information gathering and sharing assets via email and social media companies.
The change is already starting in earnest. As of early 2020, when the pandemic hit, at least 30 states have adopted laws dealing with this subject. Most of these have adopted the Uniform Fiduciary Access to Digital Assets Act, although a few states have passed their own laws, and it is likely that other states will enact something similar in the future.
Your digital fiduciary should definitely be someone you trust, but it's just as important to make sure they have the knowledge needed to manage your digital estate. If your executor or agent doesn't have sufficient knowledge, you can designate a separate co-fiduciary for digital assets.
As an alternative, you can designate a person to assist your executor or agent with digital assets, without appointing that person as a co-executor or co-agent. However, make sure your digital fiduciary knows where to find your list of digital assets and login information. This compilation of lists should be securely stored, preferably alongside your will and other important documents. Make sure your digital fiduciary has access to this information. It's possible to store all of the information digitally, as long as you have sufficient security from hackers.
Here are five steps you can take in order to put your digital estate in order:
When you’re creating your digital estate plan, you should take into consideration the law in your state. It is always advisable to consult with a knowledgeable attorney or to get help from an online service provider.