Increased digitalization has led to a new hiccup in estate planning: how to transfer digital assets when you die. Simply giving someone your username and password for all your digital accounts is not enough. Since the goal of estate planning is to communicate who should get your assets after your death and establish an effective and efficient framework to do it, digital assets need to be part of that plan. Here are three important steps to take.
- Understand what counts as a digital asset.
When discussing digital assets, most people immediately think of personal or work computer files or online social media accounts. The world of digital assets extends far beyond social media, Word documents and Excel spreadsheets, however, including things like valuable domain names, cryptocurrencies, online storefronts, website gateways to financial assets, contact lists, cloud storage, digital medical images and files, digital photos and music, subscription accounts, and blogs.
- Make sure your heirs have legal authority to access your accounts.
So, what makes transferring digital assets at death so problematic? Setting aside the practical issues posed by tracking online accounts and/or safeguarding usernames and passwords, the act of giving someone your digital account credentials at death does not necessarily mean that they have the legal authority to access those accounts. Technically, heirs could be accused of hacking for trying to access a loved one’s digital accounts after death, even if that’s what the person intended! In addition, most people don’t realize that ownership rights for most digital assets are typically set when agreeing to Terms of Service Agreements (TOSAs) with online providers. TOSAs routinely prohibit the transfer of online accounts to anyone else upon your death. Without the proper legal authority, a third party accessing your accounts may violate the provider’s TOSAs and could lose access to the account.
- Work with an estate planning firm that’s knowledgeable on the latest laws.
Under Illinois law, fiduciaries can have access to a person’s online accounts, manage them or close them once they die. However, your estate planning documents must contain certain language specifically granting the fiduciary access to these digital assets.
If you’re not sure whether your estate plan grants permission for your fiduciaries to access your digital assets, or whether it includes clear instructions on how to handle specific digital assets at death, our attorneys can help. We can also review the terms of service agreements for your online accounts to help you understand if and how others can receive permission to access the account. Please get in touch anytime to get started.