What Will Happen to Your Digital Assets After Death?

What Will Happen to Your Digital Assets After Death?

Digital records are valuable assets to many individuals; however, most do not realize that they are at high risk to be lost or inaccessible after death. Your “digital assets” include the following:

1. Electronic communications, such as emails, social networking sites, and blogs;
2. Online reward programs;
3. Financial accounts;
4. Digital collections, such as music files, photographs, and videos;
5. Business accounts, such as customer databases including personal and sometimes confidential information; and
6. Cryptocurrencies.

Certain laws and many terms-of-services agreements (those things you absolutely read every line of before accepting in order to sign up for an account) prohibit third-party access, which includes fiduciaries. Therefore, unless you have a very well written estate plan that addresses the digital asset, federal laws may limit your fiduciary’s right to access. So, even if your fiduciary has the proper authentication (username and password) to access the digital asset, the fiduciary may not have legal authority. Under federal law, violation is considered a criminal act.

The good news is that state legislators are taking a closer look and, as of August 2019, 41 states (including Arizona) have enacted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This act allows fiduciaries to access, copy, and manage certain digital assets. A creator of the digital asset may give affirmative consent for disclosure, either online or in paper record, which is deemed to override certain terms-of-service agreements. However, absent the affirmative, even under RUFADAA, a fiduciary may not be granted access to the record, so it is important to consider this as part of your estate plan.

Make a plan that includes the digital assets:

1. Create inventory of the digital assets;
2. Know what planning options are available for your state;
3. Consider the terms-of-services agreement before creating a digital asset;
4. Write an affirmative consent for disclosure; and
5. Create instructions for the digital asset within a will, trust, or power of attorney document.