Don’t Forget Digital Assets

Melanie Bragg has heard the horror stories. A widow is locked out of her husband’s online bank account as bills pile up. A woman dies on an out-of-town trip and her family can’t access her smartphone for crucial data because they don’t have the passcode. 

“Your digital life is part of your legacy,” says Bragg, an estate planning and probate attorney in Houston. “A will that doesn’t address your online accounts, cryptocurrency, and digital files leaves your family navigating a maze of platform policies and federal privacy law at the worst possible time.”

It’s an increasingly common dilemma as we entrust more of the sensitive and sentimental details of our real-world lives to the digital space. 

Digital assets include everything from cryptocurrency and NFTs to private family photos and cloud storage accounts containing years of financial records. They also include things we may not think of as assets, such as financial software, blogs and YouTube channels, domain names, and social media profiles.

And don’t forget email accounts. They may provide the only trail for assets such as life insurance policies and online-only banking or brokerage services, and they may be the only repository for property tax assessments, legal filings, and notices from the IRS. They also serve as master keys for resetting passwords on other accounts and, increasingly, as vital gateways for multifactor authentication permitting entry to sites and services. 

“I see airline miles, hotel rewards, and those kinds of digital assets being forfeited due to lack of information of how to access,” says William “Bill” Dismuke, an estate planning and probate attorney at Dismuke & Waters in Arlington.

Maintaining a full list of the assets and their passwords, and making sure someone knows how to get to it, is an important first step. But is it enough? An engineer meeting with Dismuke proudly described how he had everything detailed in a spreadsheet that he and his wife had access to. “I said, ‘So what if both of y’all pass away? Who has access?’” Dismuke remembers. “And he just looked at me blankly because he realized no one else had access to that.”

Competing privacy regulations can complicate or even prohibit access. Some online services only permit authorized access by the original account holder. Others, such as Google and Facebook, provide online tools that let users designate a “trusted” or “legacy” contact with specified levels of access. 

In Texas, the designations you’ve made in those online tools take precedence over any designation in a will, trust, or power of attorney. If the service doesn’t offer them, the Texas Revised Uniform Fiduciary Access to Digital Assets Act (TRUFADAA) still requires explicit authorization from you for a fiduciary to access the content of email communications.

“Texas law gives us the tools to protect digital assets—but only if we use them,” says Bragg. “Every estate plan I draft now includes explicit language granting the executor authority over digital assets, because without it, those assets can be lost forever.”

That authority can be as brief as a single paragraph, Bragg says. However long it is, it does not include passwords or other private information that would become public once the will is published. Those are kept separately. One way to do that is through a digital estate plan, which lists your assets and passwords along with the names of who’s authorized to use them, and referencing the plan in your will.

“I have a document that my staff knows about that has all of my passwords,” Bragg says. “So my staff would know that my executor would have access to that, and they would know where it is and they would give it to him or her.”

That separate document provides an additional advantage: You don’t have to contact an attorney to update your will every time you change a password. You just note it on the document—whether the document is a formal digital estate plan in a lockbox or a scribbled note under your mattress, says Dismuke. 

What’s important is having something somewhere that grants access, he says, and referencing it across your estate plan, not just in your will. Because, he adds, “A will doesn’t get probated until somebody dies. But what if they’re disabled? So, usually, I put that provision in a trust where we got the spouse as an additional trustee or the child as the successor trustee.”

That way, you can ensure your digital assets are passed on and controlled the way you intended—the same as all of your other assets.