Whenever you reply to an email, browse social media, or store photos in the cloud, you generate a digital record that belongs to you. Just as you plan for the inheritance of your physical possessions, it is equally important to consider the fate of your digital assets.
What will happen to your digital photos once you pass away? How will your social media accounts be managed? Do you want your family to have access to all your emails? These are significant questions that require your attention now.
The individuals responsible for handling your estate after your passing will need access to your digital assets. However, in most states, your executor does not automatically receive such access. That is why it is crucial to appoint a digital executor and legally provide them with the necessary information about your digital accounts.
“Simply sharing your login ID and password casually is insufficient,” Marold explains. “You need to express in writing that you are granting them the authority to access and manage your digital assets.”
Yet, with the many digital aspects in your life and new ones constantly emerging, how do you begin creating an estate plan for your digital assets?
Start by conducting a digital audit. Before formulating an action plan, take stock of your digital presence. Marold suggests compiling a list that summarizes all your online accounts and digital assets, such as:
- Devices such as computers, external hard drives, flash drives, tablets, smartphones, digital music players, e-readers, and digital cameras.
- Electronically stored information or data, whether online, in private cloud storage, or on physical devices.
- Online accounts include banking and cryptocurrency, email and communications, social media, online shopping, and rewards, photo and video sharing, NFTs, video gaming, online storage, and websites and blogs you manage.
- Registered domain names.
- Intellectual property, including copyrighted materials and trademarks.
“The audit helps you realize the extensive scope of the subject matter,” Marold emphasizes. “It reminds you to explore digital corners that may not be immediately apparent.”
After taking inventory, consider a plan for each digital asset. Determine the desired outcome for each asset. Would you like your social media accounts to be deleted upon your demise? Should your digital photos be passed on to a family member who would treasure them the most? Who will be responsible for canceling your online subscriptions?
To better understand your options, familiarize yourself with the laws specific to your state. In most states, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been implemented, allowing individuals to manage their digital assets similarly to tangible assets.
RUFADAA permits designated fiduciaries to manage digital property, including computer files, web domains, and virtual currency. However, it limits a fiduciary’s access to electronic communication accounts and content, such as emails, text messages, and social media posts, unless you explicitly grant consent in a power of attorney, will, trust, or other official documents. RUFADAA employs a three-tiered priority system to determine the disposition of a digital asset:
Tier 1: If a digital service provides a tool for designating the fate of your account after your passing or incapacitation, that designation supersedes all other documents. For example, platforms like Google, Facebook, Apple, and others offer legacy contact services or inactive account managers that allow you to assign trusted individuals to handle your digital data.
Tier 2: If you have yet to use a designated tool provided by a digital service, the instructions specified in a power of attorney, will, trust, or similar legal document will be followed.
Tier 3: In the absence of any legal documents, the terms of the service agreement of the digital service provider will dictate the fiduciary’s access to your account. It’s important to note that these agreements often restrict access to the original owner.
When deciding whether to grant access to each digital account, consider the information contained within. “There will be instances where granting access is appropriate and others where it may not be,” advises Marold. For instance, granting access to your email account would mean providing access to all the emails within, including potentially sensitive information you may not want to share.
Finally, put your plan into action. Armed with an inventory of your digital assets and a general understanding of the law, you’re ready to document your wishes officially. This may involve appointing an executor responsible for managing your digital assets after passing. This digital executor can be the same as your regular executor or someone else.
“Perhaps there is a family member who excels in handling online matters and would be best suited to be your digital executor,” suggests Marold.
The role of your digital executor may include the following:
- Distributing your digital assets to your beneficiaries.
- Archiving or deleting files and hardware.
- Closing accounts, terminating subscriptions, and managing financial obligations.
- Modifying or deleting social media accounts and notifying friends and followers of your passing.
Consider formalizing your digital asset plans and communicating your wishes to your family. Explaining the process to your loved ones will make the process easier for them.
Additionally, just as it is essential to regularly review your overall estate plan, keeping your digital asset plan current is wise. Regarding password management and cryptocurrency, your digital executor will need access to usernames, passwords, and private keys. Online password managers can be helpful in securely storing and updating passwords, but ensure that you make the necessary arrangements for your digital executor to access them. In the case of cryptocurrency, the private key is essential for accessing funds stored in a crypto wallet. Your digital executor must have specific access to this key; otherwise, they won’t be able to retrieve the funds.
In order to have a complete estate plan, it is important to include planning for your digital assets. By taking action in advance, you can make sure that your digital property is handled in accordance with your preferences, which will provide your loved ones with peace of mind and reduce their burden during difficult times.