How to Address Digital Assets in an Estate

Today, many people have significant assets that exist solely in virtual form. These digital assets include everything from social media accounts, personal photographs, and digital files, to cryptocurrencies and online banking information. 

As our lives and assets become more digitized, it’s crucial to think ahead and address these digital assets in your estate planning. Without a clear plan for managing digital property, surviving family members, executors, and beneficiaries could face unnecessary confusion and delays in the administration of the estate.

In this article, we will explore the importance of addressing digital assets in your estate plan, discuss the legal and practical considerations involved, and provide you with actionable steps to ensure that your digital property is handled in a way that respects your wishes and avoids complications for your loved ones.

What Are Digital Assets?

Digital assets are any type of content or data that are stored in digital form and hold value. They can be personal, financial, or intellectual in nature and range from photographs and social media profiles to online bank accounts and cryptocurrencies. 

The key aspect that qualifies these items as “digital assets” is that they exist in a form that requires access to an online platform or digital file to be used or managed.

Examples of digital assets include:

• Social Media Accounts: Facebook, Instagram, LinkedIn, Twitter, TikTok, Pinterest, etc. These platforms contain valuable personal content, photographs, posts, and connections.
• Email Accounts: Gmail, Yahoo, Outlook, and other email providers hold communication records that may be personal or professional in nature.
• Digital Files: This category encompasses photos, videos, music, documents, and other files stored on devices like smartphones, computers, hard drives, and cloud storage platforms.
• Cryptocurrency: Digital currencies like Bitcoin, Ethereum, and other cryptocurrencies, which require special digital wallets to store and manage.
• Online Bank Accounts: Many people manage their finances through online banking, which may include checking accounts, savings accounts, investment accounts, and other digitally stored financial assets.
• Digital Subscriptions: Streaming services (e.g., Netflix, Hulu, Spotify), online magazine subscriptions, cloud storage services (e.g., Google Drive, Dropbox), and other services that require subscriptions.
• Intellectual Property includes digital creations such as blogs, videos, e-books, music, or even software that may have financial or sentimental value.

Digital assets can be both personal and financial in nature. Financial assets like cryptocurrencies or online banking accounts are particularly important to ensure that they are handled correctly, as they may be highly valuable and difficult to access without the proper information.

Challenges in Managing Digital Assets After Death

While digital assets can be valuable and important to your legacy, they can also present unique challenges when it comes to estate planning and administration. These challenges include:

1. Ownership and Access Rights: Many online platforms and services have complex terms of service that govern the ownership and transfer of digital assets. For example, while you may purchase digital media like music or movies, the license granted by the provider might not permit full ownership or transferability after death. Similarly, services like cloud storage may limit your ability to pass on files stored on those platforms.
2. Privacy and Security Concerns: Online accounts are often protected by passwords and two-factor authentication systems, making it difficult for loved ones or executors to access accounts after your death. Without proper access instructions, executors may be unable to recover or manage digital assets in a timely manner, causing unnecessary delays and potential legal issues.
3. Legal Restrictions: Different jurisdictions, including both Florida state law and federal regulations, may impose limitations on how digital assets are handled after death. The Electronic Communications Privacy Act (ECPA), for instance, provides some protections against unauthorized access to email accounts and other digital communications, while some online platforms may have their own policies on what can be done with user accounts after death.
4. Complexity in the Probate Process: Florida’s probate process, handled by Miami-Dade County courts, requires that all assets be accounted for and distributed according to the deceased’s wishes or the terms of their will. Digital assets are often difficult to locate or manage, especially if they are spread across multiple accounts or platforms. Without clear instructions, surviving family members may encounter difficulties identifying all digital assets or understanding how to properly distribute them.

Legal Considerations for Digital Assets in Florida

Handling digital assets involves navigating a variety of legal considerations. The legal framework around digital asset management is evolving, and it is essential to understand how these assets are treated under Florida law as well as federal regulations.

1. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA): Florida has adopted RUFADAA, a law designed to give fiduciaries (such as executors or personal representatives) access to a deceased person’s digital assets. Under RUFADAA, an executor can request access to digital accounts, emails, social media profiles, and other online services, provided the deceased gave permission either before death or through their estate planning documents. If access was not granted, a court order may be required to allow access.
2. The Electronic Communications Privacy Act (ECPA): The ECPA is a federal law that governs the privacy of electronic communications, including emails, text messages, and stored communications. The law prevents unauthorized access to private communications and can complicate access to certain digital assets after death. Executors must carefully navigate this law to ensure they follow proper procedures for gaining access to a decedent’s accounts.
3. Online Service Provider Terms of Service: Many online platforms have their own rules regarding the transfer, deletion, or memorialization of user accounts after death. For example, Facebook allows users to designate a legacy contact who can manage their account after they pass away, while other platforms may require proof of death and a legal order to release information. It’s crucial to review and understand the terms of service for each platform to avoid complications.

How to Include Digital Assets in an Estate Plan

Including digital assets in your estate plan is an essential step in making sure your wishes are honored after death. Without this inclusion, your digital property could be overlooked, potentially causing confusion or disputes among your family members. Here are the key steps for including digital assets in your estate plan:

1. Create a Digital Asset Inventory: Start by compiling a comprehensive list of all your digital assets. This includes usernames, passwords, email accounts, social media accounts, cryptocurrencies, and any other online property. Consider organizing this information in a secure, accessible manner that your executor can easily update and reference when necessary.
2. Write Clear Instructions: Simply listing your digital assets is not enough. You must provide clear instructions on how you want these assets handled after your death. For example, you might specify whether you want a social media account to be deleted, memorialized, or transferred to a designated individual. You should also provide guidance on whether any digital files or intellectual property should be shared with family members or organizations.
3. Appoint a Digital Executor: Just as you appoint a traditional executor to manage your physical estate, you should designate a digital executor to handle your online assets. This person should be trusted, reliable, and capable of managing digital assets. If you don’t appoint a digital executor, the court may need to assign someone, which could delay the process.
4. Include Instructions in Your Will or Trust: Digital assets should be formally incorporated into your will or trust. By including these assets, you ensure that your executor has the legal authority to manage and distribute your digital property. You should also be specific about how digital accounts or files should be handled, especially for sensitive or valuable digital assets like cryptocurrency.
5. Regularly Update Your Digital Estate Plan: Digital assets evolve rapidly, and your list of assets may change over time as you acquire new accounts or digital property. It’s important to review and update your estate plan regularly to ensure that all new assets are included and that your instructions remain current.

How to Ensure Access to Digital Assets After Death

One of the primary challenges in handling digital assets is ensuring that your executor can access the accounts after your death. Here are some steps you can take to ensure a smooth process:

1. Use a Password Manager: A password manager securely stores all your usernames and passwords for various digital accounts. It also generates strong, unique passwords for each service. Many password managers allow you to share access to trusted individuals after your death, making it easy for your executor to access your digital assets without compromising security.
2. Store Access Information Securely: If you don’t want to use a password manager, you can manually store access information in a secure location, such as a safe deposit box or with a trusted attorney. Make sure your executor knows where to find this information and that it is kept in a safe, private place.
3. Consider Two-Factor Authentication (2FA): Two-factor authentication is an excellent way to protect your accounts, but it can also complicate access after death. Ensure your executor has backup access methods, such as security codes or backup keys, to bypass any 2FA systems.
4. Leave Detailed Access Instructions: If you have accounts protected by complex security systems, leave detailed instructions on how to access them. Include backup recovery options, emergency contacts, and other necessary steps to help your executor gain access to your digital assets.

Addressing Social Media Accounts and Online Profiles

Social media accounts are a major part of many people’s digital legacies. Fortunately, most social media platforms have developed policies for handling accounts after a user’s death. Here’s a breakdown:

• Facebook: You can designate a legacy contact who will manage your account after you pass away. Your legacy contact can either memorialize the account or delete it entirely.
• Instagram: Similar to Facebook, Instagram allows you to memorialize your account after death, keeping your content visible to friends and followers.
• Twitter: Family members or executors can request that a deceased person’s Twitter account be deactivated or deleted.

Make sure to include your preferences for these accounts in your estate plan, and ensure that the appointed executor knows how to carry out your wishes.

Dealing with Cryptocurrencies and Blockchain Assets

Cryptocurrencies are often treated as highly sensitive digital assets due to their decentralized nature and reliance on private keys for access. To manage these assets:

• Document Private Keys: Cryptocurrency wallets are protected by private keys. These keys must be carefully documented and stored securely. Ensure your executor has the necessary information to access these wallets.
• Understand Tax Implications: Cryptocurrencies are subject to taxation, and their value can fluctuate over time. Executors should be aware of the tax consequences when managing cryptocurrency assets.

Challenges Executors Face in Handling Digital Assets

For an executor, dealing with digital assets can be especially complicated. Executors may face difficulties in:

• Locating and identifying digital assets.
• Accessing encrypted accounts or platforms with two-factor authentication.
• Navigating complex legal and privacy laws around digital communication.

Miami-Specific Considerations for Digital Asset Management

In Miami, digital asset management can be especially complex, as residents may hold assets across international platforms or deal with cryptocurrency investments. Florida’s probate laws, combined with RUFADAA, provide guidelines for handling digital assets, but international assets or accounts on platforms outside of the U.S. may be subject to different rules.

Schedule a Free Consultation

In the digital age, managing digital assets is an essential part of estate planning. By including digital assets in your estate plan and making sure that all assets are properly documented and accessible, you can avoid unnecessary confusion and ensure that your loved ones and executors can handle these assets according to your wishes.

At Niebla Probate Firm, we are here to help you navigate the complexities of digital estate planning. 

Our team understands the challenges that digital assets can present, and we can help you create an estate plan that addresses all aspects of your legacy, both physical and digital. If you need assistance with planning for your digital assets or navigating the probate process, reach out to us today by calling (786) 599-1360 to schedule a consultation.