Digital Estate Planning: How to Protect Digital Assets
You’ve made plans for what happens to your money, your home, and your prized possessions when you die by listing those items in your will. But what about your digital footprint — your online banking accounts, digital files, and any other important information you've stored in online accounts? What about the years’ worth of digital photos you’ve stored in the cloud or the sensitive social media and email accounts and personal information stored online?
These digital assets aren’t likely properly addressed (or even mentioned) in your will. This means, at best, there will be confusion about who should have access to which online accounts, if anyone even knows which accounts you have. Creating a digital estate plan as part of your estate planning can ensure your loved ones know what digital assets you own and what you want done with each asset once you’re gone.
What Is a Digital Asset?
Under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which has been adopted by most states (including California, Indiana, and Connecticut), digital assets are “electronic records in which individuals have a right or interest.” In other words, a digital asset means any content stored in digital format — whether it’s stored on a digital platform or an electronic device. There are many types of digital assets, including:
Finance-related digital assets, such as accounts related to online banking, credit cards, Bitcoin, or non-fungible tokens (NFTs)
Note that under RUFADAA, the underlying financial assets themselves (e.g., the actual funds held in a bank account, the actual Bitcoin, etc.) are physical, not digital assets, and are therefore included as part of a traditional estate plan and subject to relevant estate planning laws.
Business-related assets, such as online utility accounts, company websites, domain names, and digital intellectual property
Personal assets, such as blogs, email, or social media accounts
What About Online Music, Books, and Video Collections?
As proud as you may be of your vast online collections of music, novels, and movies, it’s likely you didn’t actually buy the underlying materials themselves but only paid a digital platform for a license to use them. This means you have no right to transfer the actual music, books, or videos to your heirs. You may be able to pass on to your family the same rights you have — to listen, read, and watch for the duration of the license — but this will depend on the service agreements you signed with each digital platform.
Digital Estate Plan Defined
A digital estate plan lists all of your digital assets, provides access information (passwords, for example) for each asset, and directs how you want each asset to be handled after your death. For example, you may want your spouse or children to have access to your online photos but not your social media accounts. A digital estate plan allows you to choose a digital executor who will see to it that each of your online accounts is handled according to your wishes.
Digital Estate Plan vs. Last Will and Testament
A digital estate plan is informational and may not give your heirs legal ownership of anything. A will, on the other hand, deals with the physical property you actually own, such as your home, vehicle, and money, and it allows you to transfer legal ownership of those assets to your heirs.
Connecting Your Digital Estate Plan to Your Will
Adding a provision in your will that references your digital estate plan will alert people to the fact that you have such a plan and ensure it doesn’t get overlooked. If your will is already finalized, you can add a codicil (a legal document that amends or supplements your will) and reference your digital estate plan there.
Digital Estate Planning: Why Bother?
As this brief FAQ explains, there are several reasons why you should create a digital estate plan, even if you already have a will. (Note: If you have estate planning documents other than or in addition to a will, such as a revocable inter vivos trust, you may be able to add your digital estate wishes there. Speak with your estate planning attorney about what the best plan is for your particular situation.)
Why can’t I simply list my digital assets in my will?
There are a few reasons why this won’t work:
As explained above, a will deals with physical property you own, not online accounts or subscriptions to which you likely have no ownership rights.
In the United States, wills are published on the death of the testator (the person who created the will). If you list all of your digital assets and their access information (e.g., all of your passwords) in your will, the entire world will be able to see this information once you die. A digital estate plan is a separate document and is not published.
You can update a digital estate plan as often as necessary (e.g., as you acquire or get rid of certain online accounts) without having to revise your will, which can be time-consuming and costly.
Why can’t I simply give my spouse or children a list of my online accounts and passwords?
Just because your children have the password to your online bank account doesn’t mean they have the legal authority to use that password to access your account. Indeed, your children could run afoul of federal and state unauthorized computer access (i.e., hacking) laws by attempting to use your password after you die, even if you intended that they do so.
Doesn’t RUFADAA take care of digital assets?
Not entirely. RUFADAA does two main things: (1) it gives your fiduciary (the person you authorize to act on your behalf, such as the executor of your will) legal authority to manage your digital assets, and (2) it provides the custodians of digital assets (i.e., the owners of online accounts, such as the bank, Apple Music, or Amazon Prime) legal authority to deal with your fiduciary.
There are several reasons why relying on RUFADAA, rather than creating a digital estate plan, could result in your true wishes not being carried out:
If you rely only on a will, RUFADAA will allow only the executor named in your will to access your online assets, and this may not be your preference. A digital estate plan allows you to name a digital executor who understands how to navigate digital life and to state who should be given access to each of your digital assets.
For example, you named your lawyer as your executor in your will, and although you trust them to handle your finances, you feel quite differently about having them access your personal online information.
Or you named your uncle as executor, but he’s not internet savvy and may be confused about your online accounts.
Also, you may want to give access to certain online accounts to one person and others to someone else.
RUFADAA will allow your fiduciary access to all of your online accounts, but what if you don’t want your fiduciary — or anyone — to access certain personal information or sensitive accounts after you die? A digital estate plan allows you to instruct that certain online accounts are to be deleted or deactivated on your death.
Under RUFADAA, your fiduciary has access to a list of your online communications but not the content of those communications — unless you gave prior consent. In creating a digital estate plan, you have the opportunity to ensure, for example, that the fiduciary of your email account has access to your actual emails if that’s your desire.
A Warning: Dead Man’s Switches Trump RUFADAA
Note that under RUFADAA, an online account custodian’s tools directing the fate of an account on the member’s death trump a digital estate plan. For example, so-called dead man’s switch tools (such as Google’s Inactive Account Manager and Facebook’s Legacy Contact) permit the user of the account to name a successor to be notified if you don’t log into your account for a certain period of time. Be sure to update these so they’re consistent with your digital estate plan; otherwise, the digital platform tools may specify a successor you no longer prefer.
How to Create a Digital Estate Plan: Five Steps
Ready to create your own digital estate plan? Follow these steps:
Step One: Create a digital asset inventory.
List each of your digital assets and its corresponding information (login, password, account number, etc.). Be sure to review the service agreement for each in case there are measures you must take to ensure others can use your password after you die.
Step Two: Decide how you want each digital asset to be handled.
For each digital asset, specify by name the person(s) you wish to have access to it. Also, specify any online accounts you wish to have deleted or deactivated upon your death.
Step Three: Appoint a digital executor.
This may or may not be the same person you list as executor of your will. If it’s someone different, let each person know of the other’s role, and ask that they work together when the time comes. Be sure to choose a digital executor who is comfortable with technology.
Step Four: Make it legally binding.
Speak with your estate planning attorney about any steps required by your state to make sure your digital asset plan is legal. Also, reference your digital asset plan in the language in your will, or create a codicil to your will and reference the plan there.
Step Five: Store your plan somewhere safe.
Put your digital estate plan in a safe, such as a locked filing cabinet, or give it to your attorney for safekeeping. Let your executor and your digital executor (if they’re different people) know where to find the plan.
Subsequent Steps: Communicate and update.
Once your digital estate plan is complete, consider (1) informing your family about the plan so everyone is aware of your wishes and (2) making regular updates to your plan as you acquire or delete online accounts and digital assets. If you reference your digital estate plan in your will or a codicil, do so in terms general enough to apply to any updates.
Ensure Digital Assets Are in Good Hands
As people continue to develop a greater online presence, current and future estate planning attorneys should be aware of digital estate plans, and they should understand how such plans are handled in the states in which they practice.
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