June 8, 2022

This paid piece is sponsored by Woods, Fuller, Shultz & Smith PC.

By Lisa J. Maguire, shareholder

Whether or not you know it, you are acquiring digital property nearly every day. This digital property consists of what are called “digital assets.” Digital assets may be personal or business related. They include things that may not have much monetary value but do have sentimental value, such as social media accounts or photos and videos stored to the “cloud.” However, they also include things that do hold value, such as domain names.

Other common digital assets include email accounts, online banking accounts, e-commerce accounts, online chatrooms, loyalty program benefits such as credit card points or airline loyalty programs, cryptocurrency and other trading accounts, online betting accounts and blog content — basically any personal information you may have on your computer, cellphone or tablet.

Just like any other property, your digital assets will survive you. So how can you be sure that when you die your digital assets will be disposed of in the way you desire? You need to create a digital estate plan.

If you choose not to create a digital asset plan, your loved ones are likely to face obstacles. Most likely would be the inability to access your digital assets because of not having access to your usernames or passwords. Other types of data encryption also may inhibit access. Other obstacles may be federal and state laws. For instance, criminal laws may make it a crime to access digital computer systems and private personal data without the authorization of the owner. Additionally, without the owner’s consent, data privacy laws may prohibit online account service providers, such as Google, from turning over digital content to anyone other than the owner.

To create a digital estate plan, first, make a list of all your digital assets and their corresponding usernames and passwords. Additionally, create a list of frequently used security questions and answers. You also could utilize a password manager program to help store your digital asset information in one place. To cover your bases, it is also a good idea to frequently back up data onto your computer or external hard drive.

Next, determine which digital assets you would like to preserve and which digital assets you would like to die with you. Once you have done so, decide where to store them and how they will be transferred upon your death. If a method of transferring your digital assets is not chosen until after your death, there will be fewer options available to you.

One option is to store your digital assets in a living trust. This will allow the user to access his or her digital assets during lifetime as trustee and will provide for a successor trustee to have access upon the user’s death. However, certain service providers may prevent accounts to be owned by a trust.

Additionally, whether you can preserve a digital asset may depend on the digital asset itself. For instance, Facebook does not allow the management of an account after death. Instead, it has a legacy contact tool, which allows a user to designate a fiduciary to have the ability to terminate or memorialize the account upon the user’s death. You should consult the terms of service of your digital assets while formulating your digital estate plan so that you can understand what must be included within your legal documents so that your survivors do not have to jump through hoops to gain access to your digital assets.

The last step in formulating your digital estate plan is to identify someone to carry out your wishes.

After you have formulated a digital estate plan, it is time to update your legal documents to make it official. First, determine which legal document will house your digital estate plan. Do not include it in your will! While you should reference your digital estate plan in your will so that it can be easily located and identified, you should not use your will to create your digital estate plan for two reasons.

First, your will becomes public information when you die. Your digital estate plan will consist of private security information, such as your usernames and passwords. You would not want to share this information with the general public. Second, the formalities required to create and amend a will are extensive. Having to frequently update your will as passwords change is inconvenient and inefficient.

Next, provide consent in your legal documents, such as a will, power of attorney or trust, granting an appointed individual access to your digital assets so it can be ensured they are either preserved or deleted in accordance with your wishes.

Given the recent creation of digital assets and their never-ending evolution, the law surrounding their estate planning is developing as we speak. Today, only five states have passed laws governing digital estate plans. Because of this, it is important to stay up to date on the state of this developing area of the law.