Your digital assets—basically, everything you store or access on your phone or computer—hold value for your loved ones, whether financial or sentimental. Planning your digital legacy starts now.
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As more parts of our lives rely on the internet, the larger our digital footprints have become. The photos you once had in an album on the coffee table might reside in cloud storage now, and you probably check your email more than your mailbox.
As with your real estate and physical property, you want your digital property to be in the right hands after you die. Consider, for example, how you can ensure your family members will be able to access all your family photos. Who will continue or close your online business? What should happen to your Facebook account? Understanding your digital assets is key to building a modern estate plan.
What Is the Definition of a Digital Asset?
There is no agreed-upon definition for what a digital asset is, and the scope of the definition changes between industries. For estate-planning purposes, however, digital assets can be defined as content that is stored digitally and digital representations of physical assets. That encompasses online accounts and files on your computer or phone. These assets can have monetary value or sentimental value.
Digital assets often include historically physical things you can now access on a computer, such as music albums, photos, or text documents. “Digital” does not have to mean online — you may save, store, and access digital assets on your own hardware (such as your computer, phone, tablet, or hard drive). Or you can store them on the internet.
Examples of digital assets include:
- Digital collections of media files, such as photos, videos, and music; and documents and records, such as PDFs, text files, databases, and contact lists
- Electronic communication accounts, such as email, social media, online dating profiles, and gaming accounts
- Your websites, blogs, and domain names
- Marketplace accounts where you are selling, buying, or betting, such as Amazon, eBay, or Sportsbook
- Online loyalty program rewards, such as for airlines, credit cards, or retailers
- Items stored on the blockchain, such as cryptocurrency and non-fungible tokens (NFTs)
- Online accounts that manage physical assets, such as finance accounts or utility accounts
Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This law governs how someone can access the digital accounts and records of someone who has died. RUFADAA defines a digital asset as “an electronic record in which an individual has a right or interest.” However, your state’s version of RUFADAA might have a different definition.
How Do I Include Digital Assets in My Will?
You can create a “digital will,” which is a document detailing how your loved ones can access your digital assets and what you would like done with your data. You can appoint one more digital fiduciaries (similar to an executor) to oversee your wishes.
To share access to your accounts, you must gather login information for all your online accounts. The easiest way to do this is to use a password manager, for which you can usually assign an emergency contact. There are several other ways of managing your passwords and access keys, but no matter what method you use, you should record the following information:
- The website URL or name of the app
- The email address you used to create an account
- Your login (your username or email)
- Your password
- Answers to any security questions for that account
- Whether you are making any regular payments under that account (include subscriptions and note the last four digits of the saved credit card)
Keep this document separate from your traditional last will and testament because you want to keep your digital access information private when your will goes to probate. That could put you at risk for identity theft or fraud. Keep all your password information in a safe place, such as your attorney’s office or a safe deposit box. Take care to provide specific instructions for accessing your digital wallets (where you store crypto, like Bitcoin or Ethereum).
Your digital will can be legally binding, particularly if you reference it in your traditional will. Start creating your will online with our state-specific Last Will and Testament forms.
Diving Deeper: Essential FAQs About Digital Assets
Digital assets can get complicated quickly. Here are some important concepts to help you create a comprehensive digital estate plan.
What Is the Difference Between Ownership and Licensure?
Just like physical items, some digital assets are owned, and others are licensed. You own files you have created, such as your photos. However, most of your accounts only provide you with a license to use their services. The scope of your ability to access your online accounts depends on the service provider’s terms of service agreement.
Services that allow you to stream movies, download books, or use software usually give you a user license, not ownership – that means you have purchased the right to use it pursuant to your agreement. These licensed items are protected by Digital Rights Management, which prevents you from, for example, copying or giving an audiobook you purchased to a friend.
Your social media accounts are also licensed to you, and this license expires upon your death or termination of the company. Most terms of service only authorize you, the account holder, to log into your social media accounts, even though that is hard to enforce. Social media and communication platforms each have their own policies for how a loved one can close your account after you pass.
Is It Illegal for My Fiduciary to Access My Accounts?
The terms of service for your account frequently include language that prohibits other people from accessing your account. This is designed to protect you from hackers and stop unauthorized content sharing. However, RUFADAA supersedes your terms of service agreement and authorizes your legally appointed fiduciary to have the same access rights as you do. Your personal representative must prove that you consented to them accessing your account and a copy of your death certificate. Check your state’s version of RUFADAA for more details.
What Happens to My Accounts After I Die?
Some websites allow you to designate someone who can manage your account after death. For example, Google has an Inactive Account Manager, which allows you to control what happens to your account after a set period of inactivity. Similarly, you can assign and provide a private key to a legacy contact for your Apple ID and control which information they can access.
Some social media and networking sites, such as Facebook and Instagram, allow you to designate legacy contacts who can either memorialize or delete your account. Many platforms, including Amazon and Twitter, require your survivors to provide a death certificate before the company closes your account. Others, such as DropBox, also require your survivors to prove they are legally entitled to access the account but will automatically close your account after a set period of inactivity.
Policies addressing posthumous account access continually evolve, so check back every few years to see your options.
Are Loyalty Points Transferable Digital Assets?
Every company has its own rules regarding loyalty points. From hotel points to airline miles to credit card rewards, the terms and conditions of use often stipulate that any earned benefits are not property. That means you do not own them and do not have a legal right to pass them to your heirs. That does not mean they all disappear when you pass, however.
Policies regarding transfers vary drastically, granted the company has a policy at all. Sometimes your rewards are forfeited upon your death, while other companies allow a one-time transfer of points out of your account. You may need to name the points beneficiary in your will for some programs. Check the terms and conditions for each program, or your representative can call customer service for details. It is easier to use your reward points while you are still able.
Digital Access: How Is My Bank Account a Digital Asset?
If cash is considered personal property, but you have an online bank account, are your available funds also regarded as digital assets? In short, no – but your online access is a digital asset.
The funds in your bank account are physical assets of yours. Your online bank account is a digital asset because it gives you access rights to manage your funds and view your statements. Whoever oversees your financial accounts after you pass should have access to your email account so they receive all statements, alerts, and policy changes.
You can give your digital fiduciary access to your online bank account in your digital will. This is different than assigning a beneficiary for your bank account.
How Are Blockchain Assets Different?
To access your assets stored on the blockchain, such as cryptocurrency or NFTs, you need two keys – one public, which functions like an account number, and one private, similar to a password. Unlike the rest of your accounts, blockchain technology is decentralized, meaning that transactions do not go through a company or bank, and the assets have no personally identifying information. As a result, if you lose your keys, there is no service that can reset your password or provide you with any account information. If nobody ever learns that you have assets stored on the blockchain, the assets essentially fall into a “black hole” when you pass.
While your executor or digital fiduciary may be able to recover account information after your death under authority from RUFADAA, the law was written as blockchain assets were just emerging. Whether your representative can access your cryptocurrency and NFTs without explicit consent is currently unclear and up to each state.
Can Digital Assets Be Placed in a Trust?
Yes, some digital assets, such as Bitcoin, can be stored in a trust. Cryptocurrency and NFTs are considered property by the IRS for tax purposes and placing them in a trust will help you avoid probate and avoid or lower various estate and inheritance taxes. You will still need to take extra measures to protect access to your blockchain assets. Because this technology and the laws around it are changing rapidly, it is wise to consult an attorney or financial planner for your blockchain asset protection plans and related insurance policies.
Consult an Attorney
The state and federal laws around digital assets and estate planning continually evolve. If you have complicated digital assets, such as intellectual property, it may be wise to seek legal advice from an estate planning attorney in your state.
Not all legal documents need to start with an attorney, and digital estate planning is no different. Whether you are planning for your death or incapacity, you can use our forms to create your essential estate planning documents:
- Last Will and Testament forms
- Financial Power of Attorney forms
- Health Care Directive and Living Will forms