A critical part of any estate planning process is identifying your assets. Typically, this process starts by listing real estate, accounts, vehicles, business interests, and a wide variety of other items to be considered upon death. It is important not to overlook the identification of key digital assets when preparing your estate plan.
Our “online footprints” are expanding rapidly. The information we store online is valuable for a variety of reasons. Photos and emails may be important for sentimental reasons. Authorized or unauthorized persons who gain access to financial information stored online can cause substantial financial harm. Some digital assets, like Bitcoin, are as valuable as paper currency carried in a wallet. You may have a large collection of digital songs, movies, and other works of art. Business owners may have exclusive control and ownership over commercial websites.
Following your passing, or your incapacitation, who will have access to these digital assets? What will become of the records? How will the people you want to have access get that access? How will the people who have a duty to preserve your assets be able to protect those digital assets when you are unable to assist them?
Terms of Service Agreements often control digital assets. For instance, Facebook now permits users to select a “legacy contact” who is given control over the account in the event of a user’s passing. Other online services may or may not have similar options. Digital assets are often licensed to you for a specific period and not owned. These licenses may or may not be assignable upon death or incapacity.
At Slotegraaf Niehoff, P.C., we advise our clients to identify their digital assets in writing. We can then begin the process of determining how to handle each of those assets. We will work with you to identify the relevant terms of service and move to take advantage of the control the digital service provider offers.
We will then include language in your Will, Trust, or Power of Attorney documents that empowers your fiduciary to manage those assets. In 2016, Indiana adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which provides a good frame of reference with respect to how key digital assets can be managed after an owner’s death by a properly appointed fiduciary. You should not assume that the powers you have given your fiduciary in a document prepared 10 years ago necessarily gives your fiduciary the right to access and manage your digital assets. It is important to include language in your estate planning documents that makes these powers explicit.
Anyone serving as a fiduciary should review the language of the instrument appointing them to their position and consider their duties with respect to digital assets. Securing these digital assets may not be easy, and the consequences of failing to secure such assets may be significant. A personal representative, for instance, may be accountable if the estate suffers a loss because the personal representative failed to take reasonable steps to prevent someone who obtains password information from accessing online accounts and making unauthorized transfers.
It is easy to predict that issues arising out of the transfer or control of digital assets in the estate planning context will only grow as our increasingly technologically dependent society ages. The law will continue to scramble to catch up to the technology. We encourage you to be mindful of your digital assets and the unique issues presented by these assets so your estate and fiduciaries are aware of your preference and are prepared to act on your behalf.
If you have questions about your digital assets and estate planning, contact the attorneys at Slotegraaf Niehoff P.C in Bloomington, Indiana.