Planning for these types of assets often gets tricky. Even if you’ve already added them to your will, that may not be enough to guarantee your heirs will have access to important online accounts or be able to follow your will. We go into more detail about how to plan for these assets below.
What Counts As a Digital Asset?
There are many different ways to define “digital asset”, but in legal settings, we often use the definition provided by the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Most states, including Washington, have adopted a version of RUFADAA, so it’s an important law to know about.
RUFADAA defines digital assets as “electronic records in which individuals have a right or interest.” That means just about any content stored in a digital format, whether on a platform or device, could be a digital asset. Most digital assets fall into one of the following categories:
Personal Digital Assets
Any photos you have stored digitally are personal digital assets. Your emails, social media accounts, and other online accounts also fall into this category, as do any personal blogs or websites.
Finance-related Digital Assets
Online banking-related accounts, credit cards, Bitcoin and other cryptocurrencies, and non-fungible tokens (NFTs) are all digital assets. However, the actual funds held in these accounts are physical assets and therefore should be included in your traditional estate planning.
Business-related Digital Assets
If you own a business, your company website, domain name, online utility accounts, and any digital intellectual property fall into this category. Planning for digital assets is an important part of your business legacy planning.
Many people are surprised to find out that their digital collections of music, novels, and movies are not digital assets they can transfer to their heirs in their wills. That’s because when you “purchase” these items, you are typically only paying a digital platform for a license to use them. You may not have bought the underlying materials themselves.
You may still be able to pass on your rights to this content to your loved ones, but it will depend on the service agreements you signed with the platform. A lawyer can help you determine what rights you will be able to pass on.
Why Digital Estate Planning Is Important
If you don’t create a digital estate plan, your digital assets will be handled in accordance with RUFADAA and state law. RUFADAA gives your fiduciary (typically the executor of your will) the legal authority to manage your digital assets. They have access to a list of your online communications, but not their content unless you gave prior consent. The RUFADAA default might not be your preference for many different reasons. For instance:
- You trust your fiduciary with financial matters, but you don’t want to give them access to all of your personal online accounts.
- You don’t think your fiduciary is well-equipped to handle certain digital assets properly.
- You would rather give different people access to different accounts and assets. For instance, you might want your children to have access to your photos but not your social media accounts.
- There are some accounts or other digital assets you don’t want anyone to access after you die; maybe you’d rather have them deleted or deactivated.
- You want the heir to your business to have access to the full content of your actual emails so they can find important information for continuing the business.
Creating a Digital Estate Plan
The best way to cover all of your electronic assets is to create a digital estate plan. Your digital estate plan should list all of your digital assets and accounts, provide any information needed to access them (such as usernames and passwords), and explain how each asset should be handled after your death.
For each digital asset, you can specify which person you wish to have access to it. You can also specify that an account should be deleted or deactivated after you pass away. Don’t forget to update tools like your email’s inactive account management settings and social media accounts’ legacy contacts; if you’ve named a successor there, that could outweigh what your digital estate plan says.
Like with a will, you will need an executor to carry out your digital estate plan. The executor can be either your will executor or someone else; just make sure both your will executor and digital estate plan executor know who each other are and are willing to work together.
From there, you will need to make the digital estate plan legally binding. Your estate planning attorney can help you take all the right steps. It helps to reference your digital estate plan in your will or a codicil to your will.
Finally, you will need to store your digital estate plan somewhere safe. That could mean giving it to your attorney or storing it in a locked cabinet. Whatever you choose, make sure your digital executor and will executor know where to find your digital estate plan.
Why Can’t You Just Put Everything In Your Will?
You may be wondering why you can’t just list all this information in your will. There are several reasons not to do this:
- Wills are published upon death. If you list all of your digital assets and passwords there, anyone can see them after you die.
- Wills are intended to deal with any physical property you own. Online accounts and subscriptions often can’t fit into a will since you likely don’t have true ownership rights.
- You can update your digital estate plan as often as you need to, without going through the time and expense of revising your will.
Your digital estate plan should be separate from your will, but you will want to tie the two documents together. For instance, you could add a provision or codicil to your will that references your digital estate plan. That will alert people to the existence of your digital estate plan.
Why Can’t You Just Give Your Loved Ones a List of Passwords?
You might also be wondering why you shouldn’t just give your spouse or children a list of online accounts and passwords. Here’s the challenge: having a password doesn’t necessarily give your children the legal authority to use it.
Many state or federal laws intended to protect against unauthorized computer access have a dark side: they make it harder for loved ones of deceased people to access digital assets. Your children could find themselves locked out or face legal trouble even if you intended for them to use the passwords. The best way to ensure your loved ones will have legal access is to create a legal document backing up their right to access your assets after you die.
Get Help With Your Digital Estate Planning
The Anderson Hunter Law Firm has been helping Western Washington residents with their legal needs for over a century. We have extensive experience with estate planning, including digital estate planning. Our lawyers can help you protect your digital assets and ensure your wishes are carried out.
Request a consultation with an experienced estate planning lawyer to start preparing a thorough, legally sound digital estate plan.