When deciding how to pass on their estates when they die, most people consider their real estate holdings, retirement accounts, and vehicles. But what about their email inbox, social media accounts, Venmo records, and crypto wallets?
Digital assets are commonplace now, so when working with an experienced estate planning attorney, a full accounting of your estate must include things like Non-Fungible Tokens (NFTs), cryptocurrency, intellectual property, and all online accounts used for socializing, networking, medical records, and gaming. If digital property isn’t specifically included in a person’s estate, family members or agents settling your estate can be locked out permanently.
Defining Digital Assets and How They’re Handled
Illinois law defines a digital asset as an electronic record that a person has a right or interest in, but the definition doesn’t extend to the money or property an account contains unless that asset is itself an electronic record. In other words, the law covers the record of a bank balance or a crypto holding, not the funds themselves. Digital assets broadly encompass a wide range of things such as:
- Social media profiles
- Online banking
- Brokerage accounts
- Cloud storage
- Digital photos
- Loyalty points
Before 2016, a federal law barred even close family members from accessing accounts after a loved one’s death. In 2016, Illinois adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which gives executors, trustees, and agents with power of attorney a way to manage records of online accounts after incapacity or death, through a three-step hierarchy. This process determines who can access the accounts and how much they can see.
This is how the hierarchy works:
- Platform tools. If the account holder has made arrangements for access to their account through the online platform’s dedicated tools, these instructions or the assignment of accounts to a specific person take precedence over information contained in their will. If this step is skipped, the account holder’s designated executor, trustee, or heir may only be given “catalog” information, not unrestricted account information, such as full texts of messages.
- Wills, trusts, and posthumous instructions. In the absence of a fiduciary named through tools on the account platform, the law looks to specific instructions left by the deceased in an official document (such as power of attorney). This authority does not necessarily provide carte blanche to explore all of an account’s contents; that still depends on the platform’s policies.
- Platform terms of service. In the absence of a clear designee named through the platform tools or the deceased’s will or legal documents, the host platform’s terms of service determine what an executor or successor can access. This is often limited to catalog information.
Avoid This Practical Trap: Passwords and Wills
Don’t make the mistake of putting sensitive account information like passwords to accounts in a will. That’s because wills become publicly accessible after they are filed for probate. Instead, name a fiduciary with authority to access accounts posthumously. Seal account information and passwords in a password-protected document or a letter of instruction that is kept with other estate planning documents.
How to Integrate Digital Assets in Your Estate Plan
Discuss the best route to your desired results with your estate planning attorney. Usually that looks like this:
- Inventory your accounts. Make a list of your banking, social media, cloud storage, cryptocurrency, and professional accounts.
- Use the tools provided by each account’s platform to name a legacy contact or account manager.
- Update wills, trusts, and powers of attorney to include specific language about handling digital assets, especially any written before the state regulations were adopted in 2016.
Proactively Protecting Your Digital Legacy
Digital accounts are easily overlooked when planning your estate because they are so much a part of everyday life. Consulting an estate planning professional from Legacy & Life Law Firm will result in a comprehensive set of documents that will protect your assets. Having a fiduciary in place to handle digital accounts provides peace of mind. Call for a consultation today.