Technology has changed many aspects of estate planning from the lawyer’s point of view. It’s as easy to meet with clients on a video call as in person, and documents can be reviewed and shared through a secure document portal. Estate planning attorneys now include digital assets as well as traditional assets, like real estate and financial accounts. A recent article from Cape Gazette, “Estate Planning for Digital Assets,” explains how to address digital assets.
The definition of digital assets itself is constantly evolving as new assets are added, but for the most part, they include:
- Electronic communication: emails, social media posts, blogs
- Reward programs: credit cards, airline miles, hotels.
- Financial accounts: PayPal, Venmo, online investment and banking accounts
- Digital asset collections: music, videos, photos
- Intellectual property: domain names, articles, books, artwork, videos
- Electronically stored data
The rules of ownership of data and the platforms holding the data are more complicated than most people think. The law attempts to balance the privacy of the original owner or creator of the data and a fiduciary’s need to access assets after the original owner’s death or incapacity.
Every time you create a digital asset, you are asked to agree to a contract, known as a Terms of Service Agreement or TOSA. This is usually presented as a long page of small type with a box to check to state you agree to the terms. With a single click, you’ve agreed to the terms of a legally binding contract prohibiting another person from accessing the account. Even if your executor or Power of Attorney has a username and password, they may not have the legal authority to access your digital accounts, although some states have passed laws to give fiduciaries some authority to access digital assets. Your estate planning attorney will know the law in your jurisdiction and incorporate this into your estate plan.
For your estate plan to protect digital assets, you’ll need to start by creating an inventory of all assets with this information:
- What type of asset
- Where it can be found (the URL address)
- User name
- Login information
- Does it require two-factor authentication, which verifies the user using a text to a mobile phone or email address?
You’ll also want to review each digital asset to see if there is any provision for assigning someone to manage your account in case of incapacity or death. Some of the larger platforms offer this ability, which is far easier than going to court to obtain photos from a loved one’s cell phone.
Another step to protect your digital assets is to name a digital executor through a Power of Attorney, so they can act on your behalf. It would be prudent to ensure that the POA includes a specific provision expressly providing the authority to access digital assets. This is required in some states.
Your estate planning attorney will help you protect your digital assets as part of creating a comprehensive estate plan.
Reference: Cape Gazette (Feb. 7, 2025) “Estate Planning for Digital Assets”