In a digital world, many things we hold dear are not tangible. We store our treasured family photos, songs and movies, and important business and personal correspondence on online accounts. We manage our money, taxes, and utilities through online accounts and files. What happens to all of this digital property when you die?
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What Are Digital Assets?
Any content stored in digital format can be considered a digital asset. You likely have digital assets on your computer, cell phone, and external hard drives. Examples of digital assets include:
- Online banking accounts
- Social media accounts
- Blogs and domain names
- Email accounts
- Cloud storage accounts
- Online store and shopping accounts
- Subscription service accounts
- Utility accounts
- Gaming accounts
- Cryptocurrency and NFTs
Typically, you set up a username and password when creating an online service account. Companies that administer such accounts tend to have policies and agreements you agree to when you open an account. For example, some online service providers only allow the account owner to access the online services. While this can help prevent unauthorized use of your digital accounts, it could also be a barrier for your family if they attempt to access your digital accounts when you die.
If your family members seek to access your digital accounts when you die, the online service providers may deny them the login information they need. After a certain period, the online service providers may deactivate or delete the accounts. Your family may lose access to your digital property if this happens.
What is Digital Estate Planning?
If you are already familiar with traditional estate planning, you know that a person often chooses a personal representative or executor in their will. The personal representative handles debts and distributes the remaining tangible assets to the beneficiaries. A personal representative may not automatically have the authority to manage your digital assets. They could face significant challenges if they attempt to access your online accounts without preauthorized access. Digital estate planning allows you to make it easier for your family to access the digital property that they need.
State laws on digital estate planning continue to evolve, but there are actions that you can take now to help your family handle your digital assets when you die. If you do not create a digital estate plan, it could be difficult or even impossible for your family to access the information they will need when you pass away.
Traditional vs. Digital Wills
You can only transfer property that you own in a traditional last will and testament. Technically, many of the online accounts you use do not give you ownership rights. You have a license to the music or movies you stream rather than ownership. You do not own your social media accounts or email accounts, so you cannot transfer them to your heirs in your will. This means that when you die, the companies have control of these accounts.
A digital will addresses how you would like your digital assets handled. In your digital will, you can choose a digital executor to carry out your wishes. For example, if you have an online marketplace that you want to shut down when you die, you could state that in your digital will. Review the terms of service and other policies and agreements to ensure that the assets are transferable first. Then you may instruct your digital executor to transfer the assets in your digital will.
Keep in mind that you may include the actual assets in an account in your traditional will. For example, a PayPal account is a digital asset, but the money in the account can transfer through a conventional will.
What Happens to My Digital Assets Without a Digital Estate Plan?
What happens if your family needs to access your digital assets, but you did not make a digital estate plan? Nearly every state has enacted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which allows personal representatives to access the digital property of the deceased. Under the Act, a person granted authority in a will to handle the deceased’s property may be allowed to access certain digital assets.
However, the Act restricts access to electronic communications such as emails and social media accounts. Your executor may only be able to gain access to files directly related to wrapping up your estate. The rest of your digital life would have to be managed piecemeal by your loved ones or live on until the domains expire or close. Technology changes faster than the law can, so it is important to revisit and update your digital will every few years.
How To Prepare a Digital Estate Plan
You can take several steps to help your family access your digital assets when you are gone. One of the most helpful things you can do is leave instructions about your online accounts for your family members.
You will want to put these instructions for your family members or digital executor in a document separate from your traditional will. This is important because a traditional will becomes public when submitted to the court. You do not want information about your digital assets and passwords made public and risk identity theft.
Inventory and Organize All Your Digital Assets
If you want to make sure that you have accounted for all of your digital property in your digital estate plan, start the process by making a list of all your digital assets. Remember your most common types of digital assets, such as social media accounts and email accounts.
To help your loved ones access your online records and accounts, you should provide the usernames and passwords to the accounts. The easiest way to organize your account information is by using a password manager, such as LastPass or 1Password, but you can also list this information in a word processor. Password managers can store other sensitive data, like credit card information, PINs, access keys, and digital copies of documents like your birth certificate and Social Security card. Some digital asset organizers allow you to name an emergency contact. Remember to review this list periodically and update it if your login information changes.
Cryptocurrency (like Bitcoin and Ethereum) and NFTs require special attention. Because cryptocurrency is decentralized, there is no organization to contact if you want to access a digital wallet or its contents. For your loved ones to access your digital wallet, you need to give them your unique identifier and password for each wallet you have. However, because this is highly sensitive information, you should leave it in a secure place, such as a safe deposit box, and not written out in your will. You can also store your cryptocurrency and NFTs in a revocable trust, keeping it out of probate and adding an extra layer of privacy.
Decide How You Want Your Digital Assets Managed
As you think about how you want your digital assets managed upon your death, do not forget to check how the service provider’s policies, user agreements, and custodial tools play a part in what happens to your digital estate when you are gone. Look for this information before leaving instructions on handling your digital assets. Some online assets, such as audiobooks, music, or movies, can’t transfer based on the terms you agreed to when you opened the account.
Many companies have legacy policies that deal with what happens to your online account when you die. For example, Facebook allows family members to “memorialize” an account so that users can continue to post messages and view photos. Microsoft automatically closes an account after two years of inactivity.
Other companies offer custodial tools which allow you to authorize someone to access your digital account when you die. For example, Google’s inactive account manager lets you designate someone to access your Google assets after you have died. Some companies, like Snapchat and TikTok, do not offer heirs access and require proof of a death certificate to delete the account without the owner’s permission.
If you have accounts that generate income, decide whether you want someone else to continue to run the account or close it. If you have a blog or other online presence, would you like the blog to remain up, or would you like it removed upon your death? You may want someone to make a final post to your followers (written by you or your appointee). Indicate what you would like to happen with each account, and then decide who you want responsible for carrying out your wishes.
Pick a Digital Executor
A digital executor is a person who manages your digital assets when you are gone. You can also designate your digital executor in a durable power of attorney document, allowing them to manage your accounts if you are incapacitated or otherwise unable to make decisions for yourself. Choose this person carefully – pick someone you trust and who is tech-savvy enough to perform the necessary duties.
You can name the same person as the executor of your traditional estate and your digital executor, but you may want to choose two different people to fulfill these roles. You might not want to place the added stress of managing your digital assets on the executor of your traditional estate. They may not be well-versed in digital assets or comfortable with overseeing them. If you are primarily concerned about your financial accounts, consider naming your financial power of attorney as your digital executor.
If you choose to have two different people serve as executor of your estate and digital executor, help them work together by leaving instructions. For example, your digital executor could assist the executor of your estate with the digital aspect of your assets. Regardless, it is a good idea to reference your digital will in your traditional will and name the digital executor.
Discuss the duties and responsibilities of a digital executor with the person you designate to fill the role. Although “digital executor” is not a legally binding designation, they must understand what you expect of them. Leave instructions that let your digital executor know how to find the necessary information to get into your digital accounts. Consider appointing your digital executor to be the custodian of your accounts where you can.
Store Your Digital Estate Plan Documents in a Safe Place
If your digital executor cannot find the instructions you left for them, it might be impossible for them to carry out your wishes. Put your digital estate plan documents in a safe and accessible place. Be sure to let your digital executor know where they can find the documents. It could be wise to place your digital estate plan documents in a home safe with your other legal documents.
Another option is to leave your estate planning documents with your attorney if you consult one to prepare your digital estate plan documents. You can create a digital estate plan on your own, so it is up to you to decide if you need to speak with a legal or financial advisor about your digital property and what will happen to it when you die.
Considering Putting Together a Digital Estate Plan?
In the long run, it could be an immense help to your family if you have a digital estate plan in place. Your digital accounts could contain vital information that your executor needs to settle your estate. Also, your family could want the items of sentimental value that you have in your accounts, like photos and other media.
You can make a traditional will yourself with FindLaw’s state-specific estate planning services.
Without access to your digital assets through a custodial tool or digital will, your family may have few options for accessing your digital accounts. Rather than risking the loss of your digital property, start planning today.