How to Create an Estate Plan for Your Digital Assets
When you think of “estate planning,” chances are your Facebook page, PayPal account, and Amazon Prime login probably don’t come to mind. But they should.
Depending on who you ask, the value of the average American’s digital estate is between $33,000 and $55,000. It includes everything from e-commerce storefronts to cryptocurrency. Even if you don’t dabble in crypto or have an Etsy store, your digital assets are more valuable than you thing. How would you value these things?
- Email accounts and contact lists
- Social media accounts
- Electronic health records
- Digital music, photo, and movie collections
- Personal and business documents
- Airline miles and other rewards points
- Cloud storage accounts
- Digital wallets such as Google Wallet or Apple Wallet
- PayPal or Venmo accounts
- Prepaid digital cards such as Uber, Starbucks, etc.
- Digital logins as gateways to your online accounts
It’s not enough to write all your logins down and give them to a trusted family member or friend to manage after you die. If someone logs into your account who is not authorized under the provider’s terms of service, he is possibly violating laws such as the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act. It doesn’t matter that you voluntarily gave them your credentials.
Most states have now passed some version of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which lays out a framework for legally managing the digital assets of someone who has died. It lays out instructions to help executors and fiduciaries access and dispose of the deceased’s digital estate.
Here’s what you should know about RUFADAA and how to begin planning for your digital estate.
Instructions given to electronic service providers override instructions contained in a will.
If you use Google’s Inactive Account Manager or Facebook’s Legacy Contact, for example, the person you name as your authorized contact has a type of power of attorney over those accounts. If you use an online custodial tool to name a trusted user, that person can override instructions from the appointed executor or administrator under RUFADAA.
If you don’t name an authorized user through an electronic service provider’s custodial tool, the legally appointed executor of your estate has the authority to manage the information and assets stored in your digital accounts.
Without a legal document, the electronic provider’s terms of service agreement has the final say.
This may seem benign, but many ToS agreements specify closing an account upon the death of the owner. If you get bills and account information via email, but your email provider closes your account when you die, your loved ones will lose an important source of information to help them settle your estate.
It’s not just a money issue, either. Your entire digital photo collection will be lost if your account is deleted when you die. Ditto all the movies, songs, and ebooks you’ve bought over the years.
It’s a good idea to name a digital fiduciary separate from the executor of your will.
Many people name a spouse or other family member as the executor of the will. Without a named digital executor, that person can access everything stored on your phone, laptop, tablet, email, and social media accounts.
You may want to keep certain things, such as text messages or emails, private from your spouse, siblings, children, or parents. Even perfectly innocent text messages can be misconstrued in the emotional period after a death. Something as minor as learning in a text message that a parent made a small loan to one child when the same parent had turned down a loan to another can start an ugly family feud. A husband learning his wife had connected, however innocently, with an old college boyfriend on Facebook could suffer unnecessary pain.
Even if your executor is not a family member, he may not be tech-savvy enough to manage all your digital accounts. Not everyone knows the value of web domains and social media accounts that are or could be monetized, for example.
Make an inventory of your digital assets
An encrypted list of accounts, usernames, and passwords stored on a thumb drive could serve this purpose. Alternatively, a handwritten list stored in a fireproof safe or safety deposit box would also work. Be sure to update it regularly.
Many digital estate advisors recommend a password manager such as SafePass or Dashlane. These tools are actually set up to transfer your digital legacy to a trusted user upon your death. Under RUFADAA, if you choose the custodial tool, your named custodian has control over all digital assets covered by the password manager regardless of instructions in your will.
Consult a qualified attorney
A lawyer can update your will or estate plan with instructions for managing your digital assets. You may wish to name one or more separate digital fiduciaries to handle different aspects of your digital legacy. Your lawyer can also advise you about which digital assets you can legally keep private from the estate if you have privacy concerns.