Estate Planning: A Plan for Digital Assets
By Kristin Hall, Esq.
Associate at Selzer Gurvitch Rabin Wertheimer & Polott, P.C
As we grow increasingly more reliant on technology in our everyday lives, it has become important to address what happens to our digital assets when we die or otherwise lose the ability to manage those assets on our own.
What are digital assets? Digital assets are the electronic records that create our digital footprint. All our photos, videos, messages, music, e-books, movies, games, passwords, e-mails and data files, as well as cryptocurrency such as Bitcoin, are our digital assets. Our digital assets have sentimental value, and they have monetary value, which is why we should make sure someone has the right to access and control that data in accordance with our wishes when we are no longer able to.
Gaining legal access to another person’s digital assets may not be as simple as having a username and password. There may be additional security measures such as two-step verification or security questions that would prevent access to digital assets. There are also laws protecting against unauthorized access to devices and digital materials, even if the person seeking access is a fiduciary appointed to act on our behalf (such as a personal representative or an agent under a power of attorney). Planning for digital assets and the complexities of access to them should be a key part of every estate plan.
To provide a way for fiduciaries to have access to digital assets, most states (including Maryland, DC and Virginia) have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). RUFADAA prevents the release of digital information to fiduciaries without the consent of the user (i.e., the account owner) and provides a three-tiered system of priorities for allowing access.
Absent an online tool, estate planning directives and terms of service, the RUFADAA default rules will apply. The default rules give the fiduciary some access to information and some power to manage the assets but not full access.
To demonstrate how this three-tiered system works, imagine this scenario. A person passes away, and this person has many years of family photos stored in an Apple iCloud account. Apple has a new online tool, the Legacy Contact feature in iOS version 15.2, where the user can designate someone to have access to the iCloud account if he or she passes away. Imagine the user in this scenario did not designate a Legacy Contact.
Under RUFADAA, if a Legacy Contact had been designated, that person would be able to access the family photos. However, because there was no person designated, the next step to determine access is determining whether the user had left any instructions in a will, trust or other document about access to the account. Imagine the user in this scenario died intestate and left no written instructions about the photos or other digital assets. Without written instructions, the final analysis under RUFADAA is Apple’s terms of service. Notably, under Apple’s terms of service, an iCloud account is non-transferable and rights to the content terminate upon death. However, Apple states on its support page that access can be requested with a court order specifying that the user gave consent to release the information. If no planning for digital assets has been done to access the family photos, someone would have to file a petition with the court to get the family photos with no certainty of a successful outcome. Is this what the user intended?
To plan for digital assets, a user should take advantage of online tools when they are available and also make sure that the user’s wishes are addressed in estate planning documents. A specific bequest of digital assets can be included in a will or trust. Powers to manage the digital assets and access the content of digital assets can be given to the personal representative, trustee or agent under a power of attorney. Also, the fiduciary can be given instructions to preserve, transfer or destroy information. An inventory of digital assets, including usernames and passwords, should be prepared, so the digital assets can be located. The person designated as fiduciary should understand the user’s plan for digital assets and be trusted to carry them out.
In this digital age, the legal framework surrounding fiduciary access to digital assets is still in the early stage of development. When we plan for digital assets, we walk a fine line between protecting our privacy and managing our assets. To successfully walk that line, anyone who has digital assets (practically everyone) must take the necessary steps to make sure his or her wishes are carried out. If you have questions or want to establish a plan for your digital assets, the attorneys at Selzer Gurvitch are here to help you.