Aaron Charles Gregg

What are Digital Assets in a Will?

“Most family members may not have a clue what we have floating out in cyberspace. Accessing or deleting accounts can be tricky for family members, if they don’t have your login credentials.”

Most of us overlook the amount of information and assets we have online, from social media to networking websites, frequent flier miles, online bank accounts, subscriptions, photos, websites, etc. The list of most people’s digital assets has grown considerably in recent years, and yet most have no plan for what should happen to those assets when their owner dies.

This is a growing problem, says msn money, in an article making the case clear: “From Facebook to iTunes to Amazon, You Need A Digital Will!” Every website has its own legal requirements for dealing with the original owner’s death, almost aways hidden deep within the Terms of Service Agreement we all click on without reading. Some have created processes for executors, while others have not. What can you do to make it easier for your executor?

Make a list of everything you access online. Be prepared to be surprised at just how much your life occurs online. Compile a list of all online accounts, usernames and passwords. You probably have to do this bit by bit, as a marathon session might take a long time. Use either a password manager with top-notch security or a password-protected spreadsheet you update around once every three months.

This is especially important for accounts with monetary value. But sentimental value counts too. A side note: all those playlists you’ve created on iTunes? They are non-transferrable and when you die, they are deleted.

What do you want to have happen to each account? You’ll need to decide what you want to happen to each account and, depending on the account, state it clearly in what’s known as a directive. You may want to preserve some, or you may want to shut down others. Some free email accounts are automatically shut down, if they are not used for a certain period of time. Others should be down immediately to prevent fraud. Scammers prefer accounts where the owners have died, since they are often an easy entry to the person’s online identity.

Facebook is one of the platforms allowing you to designate a Legacy contact, so the person can memorialize the account, allowing only friends to see the page and removing some information. If you want to have the page deleted on death, Facebook provides directions.

Each platform has its own rules. Most rely on provisions regarding privacy protection: only the original owner is authorized to access the account. There are now federal and state laws prohibiting accessing private online data, which have created significant obstacles for loved ones to access digital assets. Don’t expect anyone to resolve your digital accounts after you pass, unless you have a digital will. Even with one, there might be issues.

Your estate planning attorney will help you add the correct language to your estate documents as to what you want to happen to each account. It’s important to ensure that your estate plan gives your executor or other fiduciary authorization to access your digital assets and what you want to happen to them. Remember—don’t put account names, usernames, or passwords in a will, as it becomes a public document during the probate process.

Without an inventory of digital assets, it may be simply impossible to ascertain where digital assets are located and how to access them. Looking at credit card statements for autopayments may be a place to start, or at least to stop the autopayments.

This is a relatively new asset class, with laws varying from state to state. Speak with your estate planning attorney to ensure your digital assets are protected, as well as traditional assets when creating or reviewing your estate plan.

Reference: msn money (Dec. 19, 2021) “From Facebook to iTunes to Amazon, You Need A Digital Will!”

How Do I Prepare a Digital Estate Plan?

“However, in a world where more and more of our personal information is stored online, it's also imperative to make a digital estate plan, so your loved ones can access your digital property.”

Today there is a new kind of asset class requiring attention when creating or reviewing your estate plan: digital assets. A recent article, titled “Everything you need to know about digital estate planning” from the Daily Herald, describes what needs to happen to protect your digital life.

Let’s start by defining a digital asset. These include social media, email accounts, online subscription services, personal images (photos and videos) stored online, blogs, online businesses, cryptocurrency, websites, web domains, gaming accounts and gambling websites, to name a few.

Signing up for any of these accounts involves a lengthy terms of service agreement (TOSA), which we all scroll past without reading and click “Agree.” What we don’t realize is our agreement is a legally-binding contract with the platform or service provider agreeing to whatever terms they have created. Many of these TOSAs include provisions stating when the original owner passes, the company may terminate their account, regardless of the value of the digital property or the wishes of the owner.

Most states have adopted legislation of some kind to address digital assets after the person has passed. Generally speaking, they grant the traditional executor or representative access to digital information. However, here’s the problem: the tech companies stand by their contracts. Protection of the original owner’s privacy is often cited as the reason contents cannot be shared with another person. Even if the executor knows the username and password, they may find the account and its content deleted. The executor may only find a small portion of the online information or be accused of committing fraud for logging on using the decedent’s username and password.

Big tech companies take the position the data and accounts were owned by one person. As a result, they have a responsibility to protect the person’s privacy. Therefore, they are not legally permitted to share data or content. The headlines of heirs trying to get family photos or police departments attempting to get evidence represent a tiny portion of the many people trying to access their loved one’s digital property. There are also millions lost in cryptocurrency from actual owners who forget their keys, or owners who never shared information with their heirs about accessing crypto wallets.

What can you do to protect your digital assets?

Appoint a digital executor in your will and provide them with the necessary materials to access your digital assets.

Create a digital asset inventory. There are online programs for this purpose, or you can use paper and pen. If you create a spreadsheet on a computer, you should encrypt it. Otherwise, you can expect it to be hacked and stolen. The only question is when, not if!

Keep the inventory up to date every time you change a password or username.

Decide what you want to happen to each digital asset after your death. Do you want your Facebook account changed to a “memorialized” account for a period of time? Or would you prefer it to be shut down, immediately?

Certain digital platforms have a process for assigning an executor—not many, but some. Find out what the policies are for all of your accounts.

Don’t share any digital asset information in your last will. The last will and testament becomes a public document when it is filed in the court. Anyone can gain access to it. Protect it the same way you would protect any major traditional asset.

Talk with your estate planning attorney about your state’s digital assets laws. This is still a relatively new asset class, but one that deserves the same level of protection as other assets.

Reference: Daily Herald (Nov. 10, 2021) “Everything you need to know about digital estate planning”

Estate Planning and Cryptocurrency

“Digital assets have been around for quite some time. However, they seem to be dominating headlines again this year. In part, you can thank high-profile figures, such as Elon Musk, for promoting cryptocurrency, or music artist Grimes for selling $6 million in NFTs.”

The increase of people investing in digital assets has not been matched by an increase in the number of people preparing to pass on these assets, which can be of considerable value. This new class of assets requires a new kind of estate planning, according to the article “Cryptocurrency and Estate Planning: What Digital Investors Should Know” from Forbes.

Cryptocurrency is digital currency used to buy online goods and services and traded in several markets. Cryptocurrency is not issued by any government. Instead, it’s created and managed through blockchain, a technology comprised of decentralized computers used to record and manage transactions. Users claim cryptocurrency is extremely secure. Sometimes, cryptocurrency is so secure that a lost password can cause the owner to lose millions.

The most popular cryptocurrencies are Bitcoin, Ethereum, Dogecoin and Binance Coin, although there are many others, and it seems like a new cryptocurrency is always being introduced. The total value is estimated at $1.35 trillion.

Another digital asset class gaining in popularity is the NFT, or non-fungible token, used to buy and sell digital art. Each NFT, which is also supported by blockchain technology, can be anything digital, like music or artwork files. The buyer of an NFT owns the exclusive original and the artist, in some cases, retains proprietary rights to feature the artwork or make copies of it. Numerous NFTs have already sold for millions.

Owning digital assets without a plan for passing them along to the next generation, could leave heirs empty handed.

Even if your family knows you own cryptocurrency, and even if they know your passwords or have access to the digital wallet where you keep your passwords, they still may not be able to access your accounts. Probate for digital assets is still very new to the courts, and if you can avoid probate for this asset class, you should.

Blockchain technology, the system behind cryptocurrency and NFTs, requires a private key to access each account, typically in the form of a long passcode. Just as you would not put account numbers into a will, you should never put passcodes or usernames in a last will and testament to prevent them from becoming part of the public record. However, only by understanding how each currency works after the original owner dies and preparing to provide the information to your executor, can your heirs receive these assets.

The nature of cryptocurrency is decentralization. There is no governing body that oversees or regulates cryptocurrency. Laws around cryptocurrency are still evolving, so your estate plan may benefit from a trust to protect digital assets.

Don’t neglect to have the necessary discussion with your heirs, including a knowledge transfer of the step-by-step process they’ll need to know to access your digital assets. An estate planning attorney with experience with digital assets and your state’s laws about digital assets will help protect these assets and ensure they are passed to the next generation without evaporating into cyberspace.

Reference: Forbes (July 21, 2021) “Cryptocurrency and Estate Planning: What Digital Investors Should Know”

What are Digital Assets in an Estate?

“Today, so many aspects of our lives are managed virtually. We keep currency, photos, music, documents, bills, medical records, artwork and even our social lives online or ‘in the cloud.’”

Planning for what would happen to our intangible, digital assets in the event of incapacity or death is now as important as planning for traditional assets, like real property, IRAs, and investment accounts. How to accomplish estate planning for digital assets is explained in the article, aptly named, “Estate planning for your digital assets” from the Baltimore Business Journal.

Digital asset is the term used to describe all electronically stored information and online accounts. Some digital assets have monetary value, like cryptocurrency and accounts with gaming or gambling winnings, and some may be transferrable to heirs. These include bank accounts, domains, event tickets, airline miles, etc.

Ownership issues are part of the confusion about digital assets. Your social media accounts, family photos, emails and even business records, may be on platforms where the content itself is considered to belong to you, but the platform strictly controls access and may not permit anyone but the original owner to gain control.

Until recently, there was little legal guidance in managing a person digital files and accounts in the event of incapacity and death. Accessing accounts, managing contents and understanding the owner, user and licensing agreements have become complex issues.

In 2014, the Uniform Law Commission proposed the Uniform Fiduciary Access to Digital Assets Act (UFADAA) to provide fiduciaries with some clarity and direction. The law, which was revised in 2015 and is now referred to as RUFADAA (Revised UFADAA) was created as a guideline for states and almost every state has adopted these laws, providing estate planning attorneys with the legal guidelines to help create a digital estate plan.

A digital estate plan starts with considering how many digital accounts you actually own—everything from online banking, music files, books, businesses, emails, apps, utility and bill payment programs. What would happen if you were incapacitated? Would a trusted person have the credentials and technical knowledge to access and manage your digital accounts? What would you want them to do with them? In case of your demise, who would you want to have ownership or access to your digital assets?

Once you have created a comprehensive list of all of your assets—digital and otherwise—an estate planning attorney will be able to update your estate planning documents to include your digital assets. You may need only a will, or you may need any of the many planning tools and strategies available, depending upon the type, location and value of your assets.

Not having a digital asset estate plan leaves your estate vulnerable to many problems, including costs. Identity theft against deceased people is rampant, once their death is noted online. The ability to pay bills to keep a household running may take hours of detective work on your surviving spouse’s part. If your executor doesn’t know about accounts with automatic payments, your estate could give up hundreds or thousands in charges without anyone’s knowledge.

There are more complex digital assets, including cryptocurrency and NFTs (Non-Fungible Tokens) with values from a few hundred dollars to millions of dollars. The rules on the valuation, sale and transfers of these assets are as yet largely undefined. There are also many reports of people who lose large sums because of a lack of planning for these assets.

Speak with your estate planning attorney about your state’s laws concerning digital assets and protect them with an estate plan that includes this new asset class.

Reference: Baltimore Business Journal (Sep. 16, 2021) “Estate planning for your digital assets”

Does Your Estate Plan Include Digital Property Protection?

“It’s difficult to go a few hours without interacting with a digital account. Whether that is email, online banking or social media, many daily tasks involve digital informational storage.”

One of the challenges facing estate plans today is a new class of assets, known as digital property or digital assets. When a person dies, what happens to their digital lives? According to the article “Digital assets important part of modern estate planning” from the Cleveland Jewish News, digital assets need to be included in an estate plan, just like any other property.

What is a digital asset? There are many, but the basics include things like social media—Facebook, Instagram, SnapChat—as well as financial accounts, bank and investment accounts, blogs, photo sharing accounts, cloud storage, text messages, emails and more. If it has a username and a password and you access it on a digital device, consider it a digital asset.

Business and household files stored on a local computer or in the cloud should also be considered as digital assets. The same goes for any cryptocurrency; Bitcoin is the most well-known type, and there are many others.

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been adopted by almost all states to provide legal guidance on rights to access digital assets for four (4) different types of fiduciaries: executors, trustees, agents under a financial power of attorney and guardians. The law allows people the right to grant not only their digital assets, but the contents of their communications. It establishes a three-tier system for the user, the most important part being if the person expresses permission in an online platform for a specific asset, directly with the custodian of a digital platform, that is the controlling law. If they have not done so, they can provide for permission to be granted in their estate planning documents. They can also allow or forbid people to gain access to their digital assets.

If a person does not take either of these steps, the terms of service they agreed to with the platform custodian governs the rights to access or deny access to their digital assets.

It’s important to discuss this new asset class with your estate planning attorney to ensure that your estate plan addresses your digital assets. Having a list of digital assets is a first step, but it’s just the start. Leaving the family to fight with a tech giant to gain access to digital accounts is a stressful legacy to leave behind.

Reference: Cleveland Jewish News (Sep. 24, 2020) “Digital assets important part of modern estate planning”