End-of-life planning is essential to protecting your assets and ensuring they transfer according to your wishes. But what happens to your digital assets when you die? 

By now, most people have a digital facet to their life. While more and more of the things we value in life are digital, a 2018 survey conducted by The Digital Legacy Association showed that 69-77% of those polled had not shared access information for their digital accounts with a trusted family member or friend, and only 6% had documented what would happen to their digital assets after death.  

Imagine…if you died today and your loved ones were unable to gain access to anything online in your name, what would that include?

Digital assets are any electronic record you own, license or control. This would include just about any and every online account or digital file that you have authority to access.  

Digital assets include (but are not limited to) the following:

• E-mail Accounts
• Social Media Accounts
• Online Banking Accounts
• Online Investment Accounts
• Cash Transfer Accounts
• Online Shopping Accounts
• Blogs
• Message Board Accounts
• Cloud Storage Accounts
• Medical Records stored Online
• Digital Photos
• Cryptocurrencies
• Smart Phone (and all Apps & Other Items on It)
• Video Gaming Accounts
• Online Businesses
• Domain Registration Accounts
• Website Hosting Accounts

Basically, any online account or service you access that is protected by log-in security could be included as a digital asset.  

In addition to the earlier question of what would be included among your inaccessible digital accounts, consider the question, “What would be lost?”  

Here are just a few examples:

• Family photos and videos uploaded only to Facebook

• Bank information (statements) sent only electronically
• If all your information is now held online (no paper records, statements, etc.), and stored on a computer protected by unshared passwords, it would be difficult for others to gain access or even have knowledge of all accounts.

• Websites or blogs you maintain

• Domain Names You Own

• Smart Phone / iPad (and all apps & items on it)
• Within each digital platform, there is a smorgasbord of variation in terms and conditions of service and transfer of ownership. Many of your digital assets are not really assets at all but licenses that terminate upon your death with no right of survivorship. An example of this can be found in the terms of Apple’s iCloud (which, by the way, is embedded into every Apple device to store photos, files, music, documents, etc.), stating “unless otherwise required by law you agree that your account is non-transferrable and any rights to your Apple ID and content within your account terminate upon your death.” If the provider of digital assets does not expressly delineate the right of survivorship, it may still be very difficult to gain access to these assets as providers are reluctant to grant access to accounts because of fear of violating confidentiality and federal privacy requirements. 

• Cryptocurrency
• One area where ownership rights are clearer is in decentralized assets (such as cryptocurrencies). These assets will remain available after death and can be passed on; however, the contents of the wallet can only be accessed via a private key. If you die and have not provided access to the private key to your executor, the assets are immovable and will be lost. This is termed the “black hole” wallet because the cryptocurrency remains valuable, but inability to transfer renders it essentially worthless.

• This can become a huge burden for fiduciaries required to file a decedent’s final income tax return. If the decedent actively traded cryptocurrency during the year, they may have substantial income tax due on those trades. With the remaining cryptocurrency trapped in the black hole, the fiduciaries would be unable to sell to cover any taxes due. Additionally, for estate tax purposes, individuals who die with considerable value in cryptocurrency that becomes irretrievable upon death may have an estate tax bill on an essentially worthless asset.  

You may be wondering whether advance planning is really necessary? Couldn’t a trusted person just get someone to hack into the accounts to gain access?

There are four main obstacles to this:

1. Passwords - If heirs don’t know your passwords, it can be very difficult to gain access. Some passwords are easy for experts to bypass…others are practically impossible.
2. Data encryption - Some encryptions scramble data so well that it is impossible to unscramble without the proper passcode. 
3. Criminal laws - Laws at federal and state levels prohibit unauthorized access to computer systems and private personal data. Without an estate plan that specifically grants your fiduciaries the authorization needed for access, the digital data may be lost.
4. Data privacy laws - Federal data privacy laws prohibit online account service providers from turning over content of electronic communications to anyone other than the owner without owner’s lawful consent. So, companies like Google and Facebook may lock your content unless you give express permission for others to access it. That may leave your heirs unable to gain access to photos, email message, or information stored in the cloud. Gaining access would likely require a court battle with an online service provider, and that could be extremely expensive.

Aside from valuable data being lost or irretrievable, there are also risks associated with allowing digital assets to linger after you’ve passed.

• Someone could access a username and password for your email and then use that information to gain access to other accounts, such as a bank account or credit card.

• Social Media Accounts could stay online long after you’ve passed. This is great for those wishing to write a memorial or positive message, but also a prime opportunity for trolls to post untruths or unflattering information, further adding to the grief of your family and friends. Facebook, for example, will memorialize an account with proof of death (but you still have no ability to capture photos or data shared). Facebook does allow for naming of a Legacy Contact who can manage your account after your death. Facebook also allows for stating that you want your account deleted after your death. These features, of course, must be selected in advance by the account owner.  

You can avoid these obstacles relatively easily by including digital property in your estate plan. You can make arrangements for full access to your digital property and make sure that no valuable or significant digital property is overlooked.

It’s important to be deliberate with your digital assets. Here are some steps to take:

• Develop an inventory of your digital assets.
• Determine digital assets currently held and how you’d like your digital executor to manage those assets in the event of death or disability
• Understand what you really own. You may have thought you purchased a digital asset, but you actually purchased a non-transferable license to use the asset. That’s the case with iTunes. Check terms of agreement for vendors of music or other digital assets 

• Include all online accounts 
• Email
• Social Media
• PayPal and other cash transfer apps
• Amazon
• Shopping Sites
• Reward Programs
• Banks
• Investment Platforms
• Insurance Policies
• Medical Records digitized
• Smart Phone and all apps on it

• Include digital property
  
• Domain names
• Virtual Currency

• List the name and web address of each account or asset, and any account number
• Include all information needed to access the account or item.
• If a second authentication step that sends passcode to cell phone or email, include details about that.  
• Security questions and answers setup with the account should be included.
• Include all important passwords. Passwords are key to helping executors and relatives manage your estate after your death. Password managers such as Last Pass, Sticky Password, Dashlane and 1 Password will encrypt and store logins, so you only have to remember one password. These companies use software that encrypts the master password and stores it only on your devices, so even if the password management company is hacked, your account would be safe.

• Store List in a secure location and let your digital executor know how to access it
• Optima offers a secure portal for your documents
• FidSafe is a free, secure online safe deposit box, to save digital backups of electronically scanned essential documents (such as bank statements, birth certificates, insurance policies, tax records, etc.)
• Everplans is another digital asset management platform
• If you store digital assets in the cloud, back them up to a local computer or storage device on a regular basis, so that heirs can access them with fewer obstacles.

• Name a Digital Executor – this is not a legal or enforceable designation, but this person can assist your executor with the digital aspects of your estate.

• Establish a digital will providing specific consent (laws require you to state specifically that your heirs have the rights to your digital assets upon your death) for e-mails, social media messages, photos, etc. The Digital Legacy Association has free templates available to assist in this process https://digitallegacyassociation.org/social-media-will-template/ (note: legal experts point out a digital will is a statement of wishes rather than a legally binding document.)

• If your state allows, you may be able to formalize your digital estate plan into a legally binding document (or a codicil to a Will). If you can do this, be certain not to include any password information, as your will becomes a public document at your death, meaning anyone could read and gain access to sensitive information. Rather, refer your Will to an outside document that contains the necessary information needed to settle your digital estate.

As with all other assets, organization and advanced preparation will greatly relieve the stress and burden on your family in locating and gaining access to your digital accounts.