What Digital Assets Should I Include in an Estate Plan?

When planning your estate, you may think of physical property such as your house, car, cash, or jewelry. Making an estate plan for these assets is important. But what about your digital assets?

Digital estate planning is more important than ever as our lives increasingly move online, from financial accounts to family photos. Your estate plan should include digital assets along with traditional ones to account for all your assets.

But what are digital assets, and how do you make an estate plan for them? Contact a local estate law attorney for legal advice.

What Are Digital Assets?

A digital asset is anything in digital format that has value and that an individual or company owns. Access is only one part of the equation. The next challenge is understanding what people have in their digital inventory.

“You want to consider all of your assets [in estate planning],” says Ohio estate planning attorney Jay E. Michael. “Whether the assets are digital… any asset needs to be addressed. Any and all.”

1. Digital Hardware

This is anything that stores digital information, such as computers, hard drives, flash drives, smartphones, tablets, digital cameras, or other digital devices.

2. Non-Monetary Digital Assets

These include photos, documents, videos, games, or music that you have stored digitally or in the cloud. These types of digital assets don’t have monetary value in themselves. However, they do have sentimental value and are often things you want to leave to your loved ones and beneficiaries.

3. Online Accounts

You may have many online accounts for different aspects of your life, from finances to communication. Online accounts include:

• Email accounts
• Social media accounts
• Messaging accounts
• Online banking accounts
• Online credit card accounts
• Other online financial accounts, including investments and stocks
• Online marketplace accounts (such as Amazon)
• Online storage accounts with digital files (pictures, videos, music)
• Online subscriptions

“Everyone these days has Facebook; everyone has Instagram,” says Samah Abukhodeir, with The Florida Probate & Family Law Firm in Coral Gables. “Pictures on Facebook from 10 years ago—that’s something the family would want.”

4. Intellectual Property in Digital Format

This could include logos, videos, or other artistic works you’ve created online, such as music, pictures, and stories.

5. Domain Name

A domain name is the name of your website.

6. Cryptocurrency

Cryptocurrency (crypto) is any digital currency that uses a decentralized transaction verification and management system (blockchain) instead of a central banking authority. Cryptography or encryption (coding methods that make data inaccessible to everyone but the intended user) secures cryptocurrency. The most popular type of cryptocurrency is Bitcoin.

“Holding a crypto asset in an exchange/marketplace [such as Coinbase] and holding the asset in an offline digital wallet is very different,” says Shawn Snyder, at Snyder & Snyder in Davie. “The former is more traditional, uses passwords and usernames that are normally recoverable, and generally can be accessed via fiduciary methods such as powers of attorney, trusts, and probate. Storage of digital currency outside of these exchanges is decentralized, and there is no method of recovering lost passwords or usernames.”

7. NFTs

NFT stands for “non-fungible token.” NFTs can be anything from images to music videos to games. They are digital assets created by assigning an identifying code to a digital object (an image, video, etc.) through encryption. The code is unique to that digital object and allows individuals to own that specific digital object.

For example, instead of just viewing a picture of your favorite superhero, you can own that image by making it an NFT. Like cryptocurrencies, NFTs are blockchain encoded. However, the similarities end there. Cryptocurrencies, like U.S. dollars or other currencies, can be exchanged for one another. This is “fungibility.” NFTs are not like money in this respect. They are unique items that can’t be exchanged for one another. This is why they’re called “non-fungible.”

8. Accumulated Points

You may have points through loyalty programs with hotels, airlines, etc.

Does Your Estate Plan Need to Include Online Assets?

“Many people have the impression that if they have power of attorney and a will, without specific mention of digital assets and devices, everything is taken care of,” says Maria Galante, an elder law and estate planning attorney at Porzio, Bromberg & Newman. That’s increasingly not true. Wills, trusts, powers of attorney, and guardianship orders now need to include language about the management of digital property and devices.

“More and more people are keeping vital information about themselves and their assets in digital formats,” says M. Kent Olsen, an estate planning and probate attorney at Olsen & Mahoney in Denver. “It’s important for their estate to have access.”

“There was a time when to figure out what assets an estate had, all you had to do was wait for the mail to come,” says Arthur Trakas, who has a solo law firm in Astoria. “Today, they are pushing everyone to go paperless. So, finding those assets can be more challenging if the person hasn’t accounted for everything.”

Five Steps To Add Digital Assets to an Estate Plan

“We’re living in a mostly digital world now,” says Michael Wild, managing partner at Kelley Kronenberg in Fort Lauderdale. “Protection of digital assets is definitely something we spend a lot of time talking about.”

“Most of the time, we are the ones informing our clients about the need to deal with digital assets when we are preparing a will. We alert them to the fact that they have digital assets, and that any will should make a disposition of those things,” says Donald Hamburg, an estate planning and probate attorney at Golenbock Eiseman Assor Bell & Peskoe in New York City.

In many ways, creating an estate plan for digital assets is like creating an estate plan for any other assets you own. Whether making a plan for your real estate or your cryptocurrency, you’ll want to:

1. Inventory

First, make a complete inventory of your assets, digital and non-digital.

In the past, says Patrick Conner, an estate planning attorney at Husch Blackwell in St. Louis, “trying to track down assets, we used to just intercept mail. Now, everybody is getting electronic statements, so it’s a lot harder to know what assets they have. And having the ability to access those after someone passes on is a challenge.”

2. Beneficiaries

Decide how you want to distribute the assets and who your beneficiaries will be.

3. Create a Will

Create a last will and testament that specifies your wishes. If you already have a will addressing your other non-digital assets, you can add an amendment (called a codicil) to account for the digital assets.

4. Appoint a Digital Fiduciary

When creating your will, appoint a digital fiduciary. “Digital fiduciary” is a broad term that could refer to two types of personal representatives:

• Power of attorney: A person authorized to make decisions about your digital assets on your behalf if you become incapacitated. You can also appoint a power of attorney through a directive instead of a will.
• Digital executor: A person appointed to distribute digital assets as specified in a will after the person’s death.

5. Make a List

Put your digital account information in an accessible, safe place. Ensure your digital fiduciary knows how to access the information when you die. Include passwords, private keys/PINs, and any other account information that will be necessary to follow your wishes.

“My most organized, diligent clients will frequently type out information on people to contact, information on assets, and where the information is located,” says David Kirch of Kirch, Rounds, & Bowman in Aurora. He recommends keeping this information with your other estate planning documents, such as your original will or power of attorney.

It’s not enough to leave passwords and usernames in a safe place for heirs to find, says Glendale estate planning attorney Arminé Bazikyan. The best way to make sure your loved ones can legally access the information is to say so in your will and other estate planning documents.

In fact, if a widow uses her husband’s passwords without written authorization, she may be breaking the law. Michael Rosen-Prinz, an estate planning partner at Loeb & Loeb in Los Angeles, says that people erroneously think that “just by being named as an executor or a successor trustee of a revocable trust, that person has the absolute guarantee of access to [digital] information.”

Are There Digital Property Laws?

There is currently no federal law concerning digital fiduciary responsibilities. However, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) provides uniformity at the state level. Most states and the District of Columbia have adopted the RUFADAA.

RUFADAA sets guidelines for digital fiduciaries in managing a deceased or incapacitated person’s digital assets. Generally, the law allows fiduciaries to access the deceased person’s digital assets as long as an estate planning document provides authorization. If a will or other estate document doesn’t explicitly grant access, the fiduciary can seek a court order to gain access or look at the service provider’s terms of service.

In addition to RUFADAA, other federal and state laws are relevant to the digital estate planning process. For example:

• Your state’s estate planning laws and probate process
• Data privacy laws that protect your electronic communications
• Criminal laws that target identity theft and unauthorized access to your accounts

“Every power of attorney, every will, every trust should provide an appointed fiduciary or agent access to online accounts and digital assets,” says Judith Grimaldi, elder law attorney and a founding partner at Grimaldi Yeung Law Group.

Digital fiduciary duties are complex. If you’re a digital fiduciary, it’s a good idea to speak with an estate planning attorney about your role and responsibilities.

Questions for an Estate Planning Attorney

“The way we used technology during life to make our lives easier can actually complicate how we wrap up a person’s financial affairs after death,” says Anne Coventry, an estate planning attorney with Pasternak & Fidis in Bethesda.

Speak with an estate planning attorney to create an estate plan that covers your digital assets. An attorney can assist you through estate planning, preparing legal documents like a will and directives, and ensure you don’t leave anything out.

Visit the Super Lawyers directory to find an estate planning attorney in your area.