Digital Assets:  Are They Part of Your Estate Plan?

by Jenny Ling, Esq.

When you think about the “assets” that you want to make a plan for when you die, you probably think of the things that you can see – your house, car, artwork, jewelry.  Even your bank accounts, retirement accounts, stocks, bonds and savings that you get statements for.  But your estate also includes your digital assets and these may be tougher to find.  If you don’t make a plan for those digital assets, your family may end up losing money you’ve earned or treasured family memories.

Digital assets come in two types – those with financial value and those without.  Digital assets with financial value are things like any bitcoin or cryptocurrency you may hold.  It also includes the money left in your Venmo or Paypal accounts as well as any domain names, websites or blogs that you may own.  These types of assets are treated much like other items in your estate that have financial value – as long as your family knows about them.  Your family may not be aware some of these accounts exist, let along how to access them.  That is why we help you make and update a detailed Family Wealth Inventory – a list of all of your assets and how to access them so your family isn’t left wondering where to find these items after you’re gone. 

Your estate also includes digital items that don’t have any financial value but they likely hold tremendous sentimental value.  These are things like that thousands (if you’re anything like me) of photos that you have stored in the cloud or your email and social media accounts.  It also includes books and songs you may have purchased and downloaded.

Though you might not realize it, you may not actually own many of these digital assets at all.  When you purchase digital property such as Kindle e-books or music files, all you really own is a license to use it.  In many cases, that license is for your personal use only and is non-transferable.  Whether or not you can transfer these assets depends almost entirely on the account’s Terms of Service Agreements (TOSA) that you agreed to (often just by clicking a box) when you opened the account.  While many TOSAs restrict access to accounts to only the original user, some allow access by heirs or executors in certain situations.

Carefully review the TOSAs of the online accounts that are most important to you to determine if you own the assets itself or just a license to use it and whether you can transfer the license to anyone else.  If you only have a license to use the account and no ability to transfer it, it may not be possible for your loved ones to access the account if something happens to you.  And even if you provide the passwords for these accounts to your loved ones, they may violate the TOSA just by accessing it.

The Revised Uniform Fiduciary Access to Digital Assets Act

The Revised Uniform Fiduciary Access to Digital Assets Act has been adopted in Washington State and lays out guidelines under which fiduciaries, such as executors and trustees, can accesses digital accounts.  The Act allows you to grant a fiduciary access to your digital accounts upon your death or incapacity, either through an online tool provided by the service provider or through your estate plan.  For example, Google and Facebook provide tools to assign someone to manage your account if you pass away.  If an online tool is not available or if you do not set it up, the Act gives priority to directives in your Will, Trust or Power of Attorney.  So as long as you use the provider’s tool – if there is one – or include instructions in your estate plan, your digital assets should remain accessible to your loved ones.

Make Digital Assets a Part of Your Estate Plan

With technology rapidly evolving, it’s more important than ever to make sure that any plan you created will cover all your assets, whether they exist online or not.  We can help you create a plan that keeps up with the ever-changing world we live in.  Contact Us today to set up your complimentary 15-minute estate planning consultation to discuss how we can help you Make a Plan!

Jenny Ling is a partner at the Law Offices of Jenny Ling, PLLC.  She focuses her practices on estate planning, business succession planning, business and bankruptcy.