Digital assets have become a significant part of many people’s estates. Most people will have digital assets, such as email accounts, social media profiles, digital photos or videos, or cryptocurrencies. As a result, personal representatives must understand the unique legal implications and challenges associated with managing digital assets during estate administration.
Understanding Digital Assets
When a person passes away, they may leave various physical assets, such as real estate or vehicles, or intangible but well-understood assets like investments and bank accounts. However, people today also have various digital assets they will leave behind upon their death. Examples of digital assets that people commonly own include:
- Email accounts
- Social media accounts (e.g., Facebook, Instagram, or LinkedIn accounts)
- Cloud storage (e.g., Dropbox, Google Drive)
- Online business accounts (e.g., Amazon, eBay, or Etsy seller accounts)
- Digital photos and videos
- Intellectual property, such as copyrightable material (e.g., written works, musical compositions)
- Cryptocurrencies and NFTs
Of course, not all of these assets will have financial value to pay estate debts/expenses or provide financial inheritances to a decedent’s heirs or beneficiaries. However, a decedent’s family members may wish to inherit digital assets that have no monetary value solely because of their sentimental value.
Challenges of Managing Digital Assets in Probate
Personal representatives may face various challenges with managing a decedent’s digital assets during the probate process, including:
- Obtaining Access – Personal representatives may need to navigate password protections, encryption, or two-factor authentication to access a decedent’s digital assets.
- Legal Limitations – Terms of service agreements for various digital platforms can complicate gaining access to or control of a decedent’s digital assets.
- Lack of Documentation – Decedents may not leave behind records of their digital assets, making it more challenging for personal representatives to locate such assets.
- Jurisdictional Concerns – Various state and national laws can create legal complexity when dealing with digital assets stored on electronic systems located in different jurisdictions.
Legal Strategies for Handling Digital Assets
Individuals and personal representatives can pursue various strategies to make handling digital assets during the probate process easier, including:
- Digital Estate Planning – An estate plan can include a digital inventory and access plan, which can help a personal representative locate and access a decedent’s digital assets.
- Express Provisions for Digital Assets – Individuals can specifically address the disposition of their digital assets in their will or trust.
- Use of Fiduciary Authority – Personal representatives can gain access to and control over a decedent’s digital assets through the Revised Uniform Fiduciary Access to Digital Assets Act.
- Digital Asset Management Tools – Individuals undertaking estate planning can facilitate their personal representative’s management of digital assets by leveraging management tools, such as password managers that can provide access to multiple digital accounts or legacy contact features on social media and other online platforms that can facilitate the transfer of control of accounts to personal representatives.
Best Practices for Personal Representatives
Steps that personal representatives should take when managing a decedent’s digital assets during probate include:
- Identifying and locating all digital assets by consulting a decedent’s family members or conducting online searches
- Securing access via passwords or reaching out to platform operators to obtain access
- Obtaining appraisals of digital assets with monetary value, such as cryptocurrencies, NFTs, or domain names
- Preserving or closing online accounts as directed by the decedent’s estate plan or as guided by the understanding of the decedent’s wishes or preferences
- Distributing digital assets per the decedent’s will or state intestacy laws, including distributing assets with purely sentimental value to immediate family members
Contact a Probate Attorney Today
Digital assets have increasingly become a common feature of people’s estates. Executors and administrators may need experienced legal guidance to help them manage and dispose of those assets during probate. Contact BoyesLegal, APC, today for an initial consultation with a probate lawyer to learn how our firm can help you manage an estate that includes digital assets.