Navigating the Digital Frontier of Estate Planning

In today’s digital-first world, our lives are increasingly intertwined with technology. From social media profiles to cryptocurrency wallets to mobile payment services, our digital footprint has become a significant part of our personal and financial lives. 

As such, it’s crucial to consider these digital assets when planning for the future, especially when it comes to estate planning and wills.

“Think about your daily activities and how many of them involve the internet. Whether you conduct your banking and bill paying online, post or browse social media, send and receive emails, upload photos or view medical records, a good part of your day may be spent online,” says AARP. “That’s why creating a digital estate plan is becoming increasingly important.”

The Changing Landscape of Assets in Wills

Traditionally, wills have focused on physical assets like real estate, vehicles and personal belongings. However, the rise of digital assets has introduced new complexities to the estate planning process. 

Cryptocurrencies, Non-Fungible Tokens (NFTs) and other online-only assets now represent significant value that needs to be accounted for in your will.

Cryptocurrency and NFTs: Keys to Your Digital Financial Kingdom

Cryptocurrencies like Bitcoin and Ethereum, as well as NFTs representing digital art or collectibles, can be valuable assets.

Including these in your will requires special consideration due to their unique nature and the technical knowledge required to access and transfer them.

“The adage ‘not my key, not my coin’ is really relevant here. If you don’t have the keys to the cryptocurrency — if you don’t have those private keys or if you have not set up a succession plan to get access to those private keys — the cryptocurrency may be lost upon death or disability,” explains Karin Prangley in an Estate Planning Essentials video presented by the American College of Trust and Estate Counsel. “Without a succession plan, a crypto could be lost forever.”

Online Accounts and Digital Files

Beyond cryptocurrencies, your digital estate may include a wide range of assets, both financial and personal:

• Digital files (including photo and video sharing) stored in cloud services like Dropbox, OneDrive, iCloud, Google Drive and others
• Social media accounts and profiles such as Facebook, Instagram, TikTok, LinkedIn, YouTube and others
• Email accounts
• Online banking, brokerage and financial accounts including retirement accounts and payment services such as PayPal, Venmo and others
• Credit card accounts
• Subscription services such as Netflix, Amazon Prime, Hulu, Spotify and others
• Domain names, blogs and websites
• Digital businesses, online stores and e-commerce accounts
• Online utility accounts
• Loyalty programs, including airline miles and hotel points
• Gaming and chat room accounts
• Personal and business contact lists
• Text, graphic and audio files, or other digital intellectual property

Options for Including Digital Assets in Your Will

Digital asset trusts and digital asset memos are two options for including digital assets in your will.

Digital Asset Trusts

One effective way to manage digital assets is through a digital asset trust. This specialized trust can help avoid probate while providing clear instructions for asset distribution. It allows you to appoint a trustee with the necessary technical knowledge to manage these assets. Key benefits of a digital asset trust include:

• Avoiding Probate: By placing digital assets in a trust, you can bypass the probate process, potentially saving time and maintaining privacy.
• Centralized Management: A digital asset trust provides a centralized location for managing various digital assets, making it easier for trustees to access and distribute them.
• Flexibility: These trusts can be structured as directed trusts, allowing the grantor to retain control over the digital portfolio even after transfer.

Digital Asset Memos

A digital asset memo is a document that accompanies your will, providing detailed information about your digital assets and how to access them. While not legally binding on its own, it can be referenced in your will to provide crucial information to your executors.

Managing Digital Accounts After Death

Many online platforms now offer options for account management after the owner’s death:

• Facebook’s Legacy Contact feature allows you to designate someone to manage your memorialized account.
• Google’s Inactive Account Manager lets you decide what happens to your data after a period of inactivity.
• Apple’s Digital Legacy program enables you to add Legacy Contacts who can access your account after you’re gone.
• Instagram does not have a Legacy Contact option like Facebook but does allow for the memorialization of an account upon proof of death, such as an obituary.
• X does not allow accounts to be memorialized, but you can request the removal of a deceased user’s account by presenting a copy of the deceased’s death certificate.
• LinkedIn allows you to close the account of a loved one via an online form which will require the date the person passed away and a link to their obituary.
• Pinterest is another social media site with no memorial pages but the option of an online form to provide proof of death to close an account.
• Snapchat requires a death certificate to close an account of someone who has died.
• For YouTube, you can close an account via Google support.
• TikTok does not offer memorial accounts so a family member or legal representative will need to contact the company to request deactivation.

Appointing a Digital Executor

A digital executor is responsible for managing your online presence and digital assets after your death. Your digital executor does not have to be the same person as your estate executor in your will, though many people choose to have the same person manage both aspects of their estate.

Digital executor duties may include:

• Accessing and closing online accounts
• Managing digital assets
• Transferring or deleting digital files
• Managing social media profiles
• Distributing or transferring ownership of digital assets to beneficiaries
• Ensuring that sensitive digital information is protected and handled appropriately
• Adhering to instructions as outlined in the digital estate plan

While the concept of a digital executor is relatively new, their legal authority can be established by explicitly naming them in your will and granting them power over your digital assets.

Securely Sharing Access Information

One of the biggest challenges in digital estate planning is securely sharing access information.

“We’ve been living in a connected world for about 25 years … so many of us have amassed a lot of online content,” Daniel Steiber, GoodTrust CEO, told AARP. “Managing the digital presence of a loved one should be top of mind … for both pragmatic and emotional reasons.”

Consider these options:

• Use a password manager and provide access instructions in your will.
• Store information in a secure physical location and provide details in your digital asset memo.
• Use a digital vault service designed for estate planning purposes.

Never include actual passwords or access keys in your will, as it becomes a public document after probate.

Keep in mind that the No. 1 thing many people can do to help facilitate access to their digital information after their death is to provide their smartphone passcode to a digital executor or loved one.

Legal Considerations for Digital Assets in Texas

Texas has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which provides a legal framework for fiduciaries to access and manage digital assets.

This law allows you to use online tools or legal documents to direct custodians on how to disclose your digital assets to designated fiduciaries, specifically:

• RUFADAA gives internet users control:Lets users decide whether their digital assets will be preserved, distributed to heirs or destroyed.
• RUFADAA respects privacy interests: Prevents companies from disclosing the contents of a user’s email and social media without the user’s consent.
• RUFADAA provides efficient uniformity: Standardizes the rules in each state for access to digital assets when the user dies or becomes disabled.

Protecting Privacy and Security

Digital executors should take steps to ensure the privacy and security of the deceased’s digital legacy:

• Use secure methods to access accounts
• Change passwords after gaining access
• Enable two-factor authentication where possible
• Be cautious about sharing sensitive information
• Follow the deceased’s wishes regarding account closure or memorialization

Updating Your Digital Asset Information

The digital world is constantly evolving, and so are your digital assets. It’s crucial to regularly review and update your digital estate plan:

• Add new accounts or assets as you acquire them
• Remove outdated or closed accounts
• Update access information if changed
• Reassess the value of digital assets, especially cryptocurrencies and NFTs

Consider reviewing your digital estate plan annually or whenever you experience significant changes in your digital life.

Taking Action with Sloan Docs

Planning for your digital legacy doesn’t have to be complicated or expensive. Sloan Docs offers easy-to-use templates for basic family and personal legal documents, including wills and estate-planning documents. 

Our platform allows you to create comprehensive estate plans that include provisions for your digital assets, all at a fraction of the cost of traditional legal services.

Contact Sloan Docs today to create a will that protects all your assets, both physical and digital.