Managing your digital assets

The Caldwell Law Team

Have you ever wondered how your digital assets are managed when you are unable to manage them yourself? What happens to all your online accounts when you die? In today’s world, it is extremely important to plan for your digital assets.

First of all, just what are digital assets? Digital Assets are intangible personal property stored and/or accessed by any electronic means, whether on a personal computer, cell phone, computer network, portable electronic storage device or media, or through and/or over the internet. These can include your bank accounts, investment accounts, accounts with health care providers, social media accounts (such as Facebook and Twitter), gambling and poker accounts, email accounts, and accounts with utility companies. Giving your helpers (agents, Trustees, and executors) the right to manage these assets on your behalf is critical to the success of all estate plans.

Digital assets are most commonly protected by passwords, sometimes more. Given the multitude of digital assets we all have, managing the passwords for each one (which should be different and difficult to “crack”) can be a daunting challenge. Happily, password managers allow you to store your online passwords in one location. Instead of keeping your passwords in a variety of notebooks, word documents, sticky notes, etc., you can store your password by using computer software. Not only do password managers keep all your passwords organized, but you need to only remember one password to access your other passwords. In addition, when you change passwords, a password manager can automatically update your stored password database—you do not need to input the changes manually. Using password managers allows you to use more sophisticated, and therefore safer, passwords for your account. There are a number of password managers on the market, including Bitwarden, LastPass, 1Password, Dashlane, Keeper, and KeePassXC. Some are free, some must be paid for.

In addition to making it easier for you, password managers make it easier for your helpers. But, helpers beware: Having access to the principal’s passwords upon incapacity or death is not enough. Helpers must also be authorized to use the passwords and access the principal’s various digital assets. Without authority to do so, they could be breaking the law. Fortunately, there are simple steps to prevent this from happening. Many digital assets have established a legacy contact tool to authorize your helpers to manage your accounts.

Legally, your digital assets now have some protection. The Revised Uniform Fiduciary Access to Digital Assets Act of 2015 (RUFADDA) was enacted to: 1) “give fiduciaries the legal authority to manage digital assets and electronic communications in the same way they manage tangible assets and financial accounts . . . and 2) give custodians of digital assets and electronic communications legal authority to deal with the fiduciaries of their uses, while respecting the user’s reasonable expectation of privacy for personal communications.” In short, RUFADAA provides your helpers access to your digital assets and allows digital service providers (“custodians”) to implement rules protecting your information.

RUFADAA contains a three-tiered approach to what governs a helper’s access to your digital assets:

Online tool provided by service provider
The user’s directions in their will, trust, power of attorney, or other record
The terms-of-service agreements adopted by the provider

Online Tools

Online tools are offered by service providers to allow a user to give access to their digital assets to an agent upon their incapacity or death. The use of an online tool provides access to the designated helper without the helper needing to take additional steps. Under RUFADAA, if a user activates an online tool, the online tool supersedes all other means of access to a digital asset. Thus, it is important to coordinate your estate plan with the online tools your provider may offer.

Directions in Your Estate Plan

Your estate plan will designate who can access your digital assets and which digital assets they can access. Authority to manage digital assets is found in general durable powers of attorney, wills, and trusts. This authority allows your helper to manage your digital assets along with your other assets. However, a helper cannot access the content of your electronic communications unless they receive permission from the service provider. Unlike the use of an online tool, this process takes time. Without permission from online service providers, your helper can view only the record of communications sent and received and not the contents of those communications.

Terms-of-Service Agreements

The terms-of-service agreements (TOSA) are the guidelines of the service provider. If you do not use the service providers online tools or give your helpers authority in your estate plan, the TOSA dictate who can obtain access to your digital assets. Most service providers’ TOSA prohibit anyone other than the original user from accessing digital assets. Therefore, it is critical to utilize the online tools or include authority in your estate plan giving your helper access to your digital assets.

To ensure your wishes for your digital assets are honored, here are some steps you can take:

Make a list of your digital assets. What are your digital assets? Are there any assets you can delete or consolidate? Who do you want to access your digital assets upon your death or incapacity? Are there any digital assets you want to keep private?

Use service providers’ online tools to designate who can access your digital assets upon your death or incapacity.

Give your helpers authority to access your digital assets in your estate plan.

Make sure the person you have designated via the online tool is the same person designated in your estate plan.

Cell Phones

Cell phones are the equivalent of a computer in your pocket. Your helpers’ access to your phone also needs to be established. A few simple steps allow your designated helpers access the contents of your phone upon your death. Instructions for Android users can be found in your Google account. Instruction for iPhone users can be found in settings.