Have you ever wondered what happens to your digital assets when you pass away? What if you became disabled or incapacitated? In this technology driven society, we frequently educate our clients on the concept of estate planning with digital assets. This article is a primer for that conversation, and something we hope will help you in your own journey.
What are Digital Assets?
Digital assets describe a broad range of property many of us own or have a right to use. Some of the more traditional assets in this category include things like e-mails, e-mail addresses, and websites. However, there are unlimited other possibilities. Think of FaceBook, Twitter, Instagram, and digital storage containers like Box.com or Drop Box. The lists go on and on.
What digital assets do you have?
When you put pen to paper, you may find yourself generating 200, 300, or 500+ different digital assets. How? Under Missouri law a digital asset is defined as “an electronic record in which an individual has a right or interest.” (RSMo 472.405(11)) Now, think of all the different websites, newsletters, or apps that you have signed up for recently. Just go back a month. How many? What about 6-months, how many? Now think back 5 or 10 years? It becomes overwhelming.
History of Problems
Over the last 20 or so years, we have seen a a great deal of litigation over digital assets in the estate planning community. For instance, a common scenario goes something like this.
Joe passes away and leaves all of his property to his wife, Sue. After Joe’s death, Sue attempts to contact a digital asset provider (think email company or social media company) to get access to Joe’s private information. Subsequently, the company, thanks Sue for the notification and immediately shuts down access to Joe’s digital assets.
The standard terms of service agreement between Joe and the digital asset company’s disallowed third-party’s from accessing Joe’s account. As a result, many of these companies either shut down the accounts or leave them ‘vacant’. In the end, Joe’s heirs are left empty handed and with limited rights.
Uptick in States Rights – Digital Asset Rights under Missouri Law
Several states, including Missouri, have created law to help solve the issues that arise from estate planning with digital assets. In Missouri, the law is known as “Missouri Fiduciary Access to Digital Assets Act,” and it became effective in August 2018. The law is codified (meaning arranged under) the Probate Code, Chapter 472 of the Missouri Revised Statutes.
The Missouri legislature has taken broad action in this space because of the well documented difficulties between estate planning and digital assets. Generally, Missouri’s law grants trustees, executors, agents under powers of attorney, and others access to your digital assets. Unfortunately, we don’t yet know how far this Act will go. For instance, will the Act prevail over a private company’s terms of service, when that private company is from a different state?
Estate Planning with Digital Assets
The Missouri Fiduciary Access to Digital Assets Act, attempts to resolve many of the problems created from estate planning with digital assets. Yet, it is still too early to know if the law will be upheld when challenged by the digital companies. Therefore, it is important to plan appropriately. Here are three ways to help ensure your digital assets can be found after your death.
First, consider giving your trustee, executor, or an agent under a power of attorney, digital asset access rights. Using the Missouri Fiduciary Access to Digital Assets Act, you can nominate individuals to have the power to access your digital assets. For example, it may be a broad power, such as “all digital assets”. Or, you can limit it to certain digital assets. We encourage you to discuss the pros and cons of each with your estate planning lawyer.
Second, consider leaving a log or journal of all your digital assets. This is a list of all the websites, email accounts, or other digital accounts you access. Or, at least the ones you want your loved ones to have access to. Be careful! It may be a violation of federal and/or state law for a third-party to access these accounts on your behalf or after your death. Therefore, this should serve only as a reference list for your loved ones. For an example, see the below chart.
|personal emails, pictures, etc
|pictures, calendar, journal
Third, determine whether the account provider allows you to nominate a custodian or agent to access your account. Some providers now allow you to name a “custodian” or grant “third-party access” rights to your accounts. Thereby, giving someone permission to access your digital asset in case you cannot.
Estate planning with digital assets can be tricky. However, with proper guidance and education, many of the problems associated with digital assets can be avoided. Feel free to contact us if you’re ready to learn more.