Why Digital Assets Matter
We often hear the warning that the internet is not real life. Although this is a useful insight for helping us avoid undue agitation from things we see online, we can’t avoid the fact that many of the activities of life happen on our computers and phones. Just as we accumulate physical possessions in the “real world,” we likewise accumulate digital assets that can be crucial to settling our affairs after we die.
The people we charge with responsibility for managing our estate will need access to our digital assets just as much as they will need the keys to our home. But the companies that manage the services storing all that digital information can be extremely hesitant to grant another person access to a decedent’s information. We need to plan carefully to give the executors and trustees we select the best chance that they can access the digital information they need to carry out our wishes.
What Counts as a Digital Asset
First, let’s consider the types of digital information that may be important to others after we die. There are certain digital assets that can have significant monetary value in themselves. These assets include digital currencies such as Bitcoin, as well as original copies of digital works, such as recordings.
Other digital assets may provide information about where to find things of value. For example, quarterly emails from an investment firm may indicate that there is an investment account that the executor should include in the estate. Armed with the information from the digital asset, the executor can contact the investment firm for more information.
In addition to digital assets that are inherently worth significant money and those that point to other assets, we all have digital assets that have significant sentimental value to our loved ones, such as photos that will bring back cherished memories, but only exist in digital form. If we state in our will that we want a certain family member to have access to our family photos, we need to provide a way for that family member to access those photos after we are no longer able to do so ourselves.
Why Access Is So Complicated
But serious obstacles arise whenever an executor or trustee attempts to access digital assets that are held in the accounts of someone who has died. The service providers who manage those assets face serious pressure to protect the assets from unauthorized access. Laws such as the Electronic Communication Privacy Act and the Gramm-Leach-Bliley Act impose strict controls on how companies share information about their customers and users of their services. These companies therefore have their own policies designed to keep them as far from violating these laws as they can. Thus, when an executor or trustee comes to a company claiming that a user has died and has given them permission to access the deceased person’s account, these companies can be wary. What’s more, dealing with the management of the assets of deceased users and customers is not a profit center for these companies so they have little incentive to be accommodating to those executors and trustees.
How the Law Helps: RUFADAA
To help balance the scales, 48 of the 50 states and the District of Columbia have adopted a uniform law that provides a way for others to get access to a deceased person’s digital assets. The law is called the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA. In Virginia, this law is codified at Va. Code Ann. §§ 64.2-116 – 64.2-132. The version of the RUFADAA that will be most relevant will the one for the state in which the company at issue has its headquarters. So California’s RUFADAA will be the one that governs a request to Apple, for instance.
What Executors Must Provide
RUFADAA allows an executor to access a deceased person’s digital assets when the executor provides the company that serves as custodian of the assets three things:
- A written request for disclosure in physical or electronic form;
- A certified copy of the death certificate of the user;
- A certified copy of the letter of appointment of the representative or a small-estate affidavit or court order;
Va. Code Ann. § 64.2-122. The custodian of the digital assets may also request the following from the executor:
- A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user’s account;
- Evidence linking the account to the user;
- An affidavit stating that disclosure of the user’s digital assets is reasonably necessary for administration of the estate; or
- A finding by the court that (i) the user had a specific account with the custodian, identifiable by the information specified in subdivision a or (ii) disclosure of the user’s digital assets is reasonably necessary for administration of the estate.
With these requirements met, the custodian has discretion to allow the executor full access to the deceased person’s account, allow partial access, or provide copies of any digital asset the deceased person would have been able to access.
RUFADAA protects custodian companies from liability if they provide digital assets to requesting parties so long as the procedures of the law are followed. The law also requires companies to respond to access requests within 60 days.
As shown above, the law itself is straightforward. But anyone who has dealt with customer service for a large company knows that requests such as the access requests our chosen executors may need to make can become complicated in any number of ways. Much depends on the company and the digital assets at issue. In addition, technology will continue to change, as well as the companies who produce that technology. The laws also are subject to change.
Giving Your Executors the Right Tools
So how do we ensure that the people we choose to settle our affairs will have necessary access to our digital assets. The best course is to equip our chosen representatives with two key tools: authority and information.
Our executors, trustees, and agents must be given explicit permission in our wills and powers of attorney to access our digital assets. This will allow them to show the custodian companies that they have authority to request access to our digital assets. Just as important, however, is to provide information about where our digital assets reside. That means providing a list of digital services we use as well as our usernames for those services. If our chosen representatives have proof of authority from us and clear information about where to look for our digital assets, they stand the best chance of carrying out our instructions for distribution of those assets.
Common Mistakes to Avoid
When thinking about and planning for management of digital assets after we are gone, we must avoid a couple pitfalls. First, note that simply sharing usernames and passwords with a trusted representative before your death is not enough. Many digital services check not only usernames and passwords when a person logs in, but they also check whether the login is being made from a different location or IP address than normal. If someone we have given your password attempts to log into our accounts after we have died, but is doing so from their own computer, the custodian company may flag this as suspicious activity and require additional authentication they cannot provide or even lock the account. It is better for our representatives to go in through the front door, using the RUFADAA process, rather than trying the back door using our passwords.
Something else to keep in mind is that the directions in our will, power of attorney, or trust documents will have no power to override any separate directions we have given the custodian company regarding how we want our digital assets to be handled. Many companies such as Google provide online services that allow users to specify who may have access to their accounts after they die. If we have used such an online service and given access to our spouse, then the company providing that online service will not be required to give access to another person named in our will. See Va. Code Ann. § 64.2-118.
Final Thoughts
The idea of end-of-life planning sometimes feels overwhelming, and adding considerations about the end of our digital life can feel doubly so. But these problems are not impossible to solve, and prudent planning is far better than ignoring the issue. Contact an estate planning professional to get your questions answered and learn how to manage the real-world effects of our online, digital lives.