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iPlanning: Estate Planning in the Digital World

With society firmly entrenched in the digital world, just about everyone has digital assets. 4.48 billion people around the world currently use some form of social media, and over 100 million people are now using cryptocurrencies. What happens to all of these digital assets when the owner dies?*

Applicable Law

The legal waters governing the administration of digital assets after the owner’s death are murky. The Stored Communications Act (“SCA”) generally prohibits providers of public communications to the general public from disclosing the contents of a user’s communication without the lawful consent of the sender or recipient. Accordingly, family members may not be allowed to access a decedent’s digital assets involving electronic communications unless the decedent expressly consented to such access prior to death.

The Computer Fraud and Abuse Act (“CFAA”) outlaws unauthorized access to computers and the data contained therein. Even if a decedent properly authorized computer access by a family member, the family member may still be in violation of the CFAA by using the computer to access digital assets not stored locally (e.g., logging into Facebook).

As if these laws don’t complicate things enough, the custodians of digital assets may have provisions in their Terms of Service agreements (“TOS”) that impact the administration of digital assets after an owner’s death. Some of these TOSs may restrict any third party’s access to a decedent’s digital asset.

In hopes of providing clarity on the issue, the Uniform Law Commission has created the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). This act is designed to help facilitate authorized third-party access to a decedent’s digital assets. In doing so, the Uniform Law Commission hopes to allow owners of digital assets to control their disposition as they are able to do with tangible, real, and financial assets. As of late 2022, forty-five states1 and the District of Columbia have adopted the RUFADAA. Massachusetts has introduced an RUFADAA bill, but has not yet enacted the bill into law. Delaware has enacted a prior version of the RUFADAA.

Digital Estate Planning Solutions

While we wait for the legal waters governing the administration of a decedent’s digital assets to clear, there are certain steps you can take to help ensure that digital assets will be administered according to your wishes:

  1. Prepare a complete inventory of digital assets. Included in this inventory should be information regarding the location of each digital asset, as well as usernames, passwords, and answers to security questions. This inventory should be held in a secure location with your other estate planning documents to minimize the risk of this information falling into the hands of a nonauthorized individual. Stifel’s “Final Thoughts and Information to Loved Ones” may be a useful tool when compiling this inventory. Contact your Stifel Financial Advisor for a copy of this piece.

  2. Research whether certain web sites allow a user to appoint an individual to manage accounts after the user’s passing. Many web sites, including Facebook and Google, now permit users to designate an individual to access their account after death. Taking advantage of this opportunity can help ensure that one’s fiduciary is not in violation of the website’s TOS.

  3. Appoint a fiduciary for all digital assets. When working with an estate planning attorney to create a last will and testament, revocable living trust, and general durable power of attorney, you should verify that the attorney includes provisions expressly granting your fiduciary the authority to access all digital assets.

  4. Provide instructions governing the administration of your digital assets. When working with an estate planning attorney to create a last will and testament, revocable living trust, and general durable power of attorney, you should verify that the attorney includes provisions providing detailed instructions regarding the administration of all digital assets.

* Source: backlinko.com and businessinsider.com.

1 Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

2 Georgia, Missouri, New Hampshire, Oklahoma, Pennsylvania, and Rhode Island.

Stifel does not provide legal advice. You should consult with your estate planning attorney regarding your particular situation.