Today, the average internet user has over 240 online password-protected accounts,1 and 97 percent2 of American adults own smartphones, meaning that the “average American” is an internet user. Digital property in a trust or estate plan cannot be managed the same as physical property. This brings to light a new and expanding challenge in trust and estate planning: how to handle digital property in the planning process.
What Digital Assets Do You Have?
When you think of digital assets, what comes to mind? One of the most common answers is cryptocurrency. Although cryptocurrency is the predominant digital asset, it is not the only one to consider when creating your estate plan. Your estate plan must address and provide access to your digital property. Your planning must reflect the requirements of federal laws, including the Electronic Communications Privacy Act (ECPA),3 which protects certain wire, oral, and electronic communications from unauthorized interception, access, use, and disclosure.
Social media and email accounts are among the most-asked-about assets when clients seek advice about digital assets. Below is a non-exhaustive list of digital properties that you may have:
- Social media
- Cloud storage
- Password managers
- Internet of things4
- Virtual collectibles
- Investments
- Banking and loans
- Crypto and nonfungible tokens
- Domain names
- Online games
- Text messages
- Loyalty accounts
- DNA tracing
- Personalized IP address
- E-commerce sites
- Online business
- In-home entertainment
When a tech innovator creates a new app, asset, or feature, they are generally not concerned with the users’ succession planning. Innovators focus on developing products that sell well to consumers, not on the account holder’s death or the people they leave behind. ChatGPT, the Metaverse, nonfungible tokens (NFTs), personal avatars with artificial intelligence (AI), initial coin offerings (ICOs), and crypto wallets are all relevant innovations within the digital property realm. When creating your estate plan, your lawyer must work with you to identify these digital assets and develop an effective strategy for your trust and estate plan.
Consider This
When thinking about your estate plan, you want to ensure that all your tangible property and financial accounts are included in a will or trust. However, your intangible property such as memories shared with loved ones (which can take the form of photos stored online and entries in a digital journal, for example) may be an important component of your legacy, as well.
Consider how you want your digital property to be distributed upon your death. You probably want control over your privacy and who can see your digital content. One survey indicated that 43 percent of respondents believed that digital property should be deleted upon death.5 This includes personal accounts, photos, and videos. Another 30 percent believed that accounts within an estate should only be accessed if the decedent provided prior consent.6
These statistics suggest that many people do not want anyone seeing certain account contents. Instead, they want their accounts to be deleted and prohibited from falling into the hands of beneficiaries, executors, or trustees. Your lawyer can help you understand what your options are when it comes to your digital accounts, and assist you in considering which strategies fit best into your trust and estate plan.
Take Action Today
Here are some things to discuss with your lawyer:
- Explain what online accounts and ventures you have.
- Ask about the legal differences between physical and digital property, and how you can use custodians to protect your digital privacy.
- Develop a plan for what you want to happen to your digital assets after you pass.
When thinking about your assets and the legacy you will leave for your family, digital property is an increasingly important consideration. If you have digital assets that you care about, it is vital to explore this discussion and communicate your wishes to your lawyer.
[1] Dashlane, Report: A Global Look at Password Health, https://www.dashlane.com/blog/global-password-health-score-report-2022 (last visited Nov. 2, 2023).
[2] Lydia Saad, Americans Have Close but Wary Bond With Their Smartphone, Gallup (June 20, 2022), https://news.gallup.com/poll/393785/americans-close-wary-bond-smartphone.aspx.
[3] 18 U.S.C. § 2510.
[4] Will Kenton, What Is the Internet of Things?, Investopedia (Dec. 27, 2022), https://www.investopedia.com/terms/i/internet-things.asp.
[5] Decedent Information, https://netchoice.org/decedent-information/ (last visited Nov. 2, 2023).
[6] Id.