Personal property, assets and other information is moving online. These include email accounts, cryptocurrency, credit card accounts and photos. Estate planning must address issues on access and disposition of these assets to help avoid problems for an estate’s executor or any heir.
These assets are financially significant. The average American had digital assets worth more than $35,000 in 2013. People are routinely handling their transactions online, such as paying bills, dealing with their bank accounts and storing important information online.
Digital assets that are not allocated after their owner’s death, such as credit card or bank accounts, also face the risk of theft or abuse. These assets also include sentimental items that should not be lost, such as photographs.
The ownership rights of digital assets may be complicated. These are usually contained in the terms of service agreement with the online service provider, which is a large volume of complicated boilerplate language that online users agree to without reading. These agreements usually prohibit the transfer of online accounts to anyone else when the owner dies, which leaves them in limbo.
Not keeping track of the online location of digital assets and constantly-changing login information and passwords may result in digital assets being permanently inaccessible. This information, however, should not be listed in a will because it may undergo the public probate process. Storing this information must comply with the federal laws, which can penalize any prohibition against sharing password information.
Michigan and other states also enforce versions of the Revised Uniform Fiduciary Access to Digital Assets Act, which has legal guidelines to handling access to digital assets. RUFADAA is intended to grant access to certain trusted individuals identified in legal documents or process so they can have access to online accounts to control or close assets if their owner dies or becomes disabled or incapacitated.
These powers and access must be specifically set forth in a will, trust agreement or power of attorney. Other planning must include identifying on which accounts and information should be stored, continued, deleted or remove. New accounts may be needed to cover assets moved between spouses and businesses.