What Do I Do With My Digital Assets When I Plan My Estate?
Today, a large part of all our lives is spent online. You may have hundreds of digital books in your Kindle library, an extensive music collection on Spotify, movie purchases on Amazon, and social media accounts with Facebook, Twitter, Instagram, and TikTok. What happens to these digital assets when you die? It depends on several factors, including the provider’s service agreement and the steps the user has taken to designate what should happen in the event of their death. If you want to make plans for your digital assets, you can do so when planning your estate. In this article, we’ll talk about digital asset management issues and the impact of New Jersey’s Uniform Fiduciary Access to Digital Assets Act.
When you want to plan your estate, the Van Dyck Law Group’s experienced attorneys are here to help you record your wishes. Please contact us for a consultation to learn more about your estate planning options and how to handle digital and other assets.
Here are some frequently asked questions about estate planning for digital assets:
What is the Uniform Fiduciary Access to Digital Assets Act?
This New Jersey state law was signed in September of 2017. It establishes that residents of the state have a right to choose who can access and manage their digital assets in the event of death or disability. For the purposes of this law, a “digital asset” is defined as an electronic record that a person (known as a “User”) has a right or interest in.
What Are Some Examples of Digital Assets?
Digital assets include most situations where you have an online account in which any data might be stored – email accounts, social media networks, text messages accessed through your phone carrier, blogs, cryptocurrency, music or video sharing sites, digital news or entertainment subscriptions, online libraries, cloud storage, medical records, and even bank accounts. If you have a login and password for something, it’s probably a digital asset.
How Does Digital Assets Estate Planning Work?
Under the Uniform Fiduciary Access to Digital Assets Act, you have three options for choosing how to distribute the rights to your digital assets:
- The user may grant access and management abilities to a fiduciary, like the executor of their estate, in the event of death.
- The user may include digital assets when assigning someone to be an Attorney-in-Fact, like a Durable Power of Attorney (POA)
- or the trustee of a trust. When creating a POA, you can ask your lawyer to include digital assets with your other financial or business concerns. Digital assets may also be assigned to a trust, making them the responsibility of the trustee.
- The user may also assign digital asset management rights to a third person who doesn’t have the role of fiduciary or Attorney-in-Fact.
Does That Mean I Can Leave My Digital Library or Other Online Assets to My Heirs the Way I Would My Other Assets?
Probably not. In most cases, you don’t own digital assets the way you might own your house, your car, or your grandmother’s wedding ring. When you purchase a purely digital asset, you’re usually buying the right to use it in a certain way for a certain period of time (which may include your own lifetime). The exact agreement is spelled out in the “custodian’s” Terms of Service Agreement, or TOSA. (A custodian is an entity that controls access to data – basically any of the companies you might use to access your digital assets, such as Amazon, Google, Facebook, etc.)
The simple fact is that most people don’t read TOSAs, which tend to be lengthy and include a lot of legalese. However, if you did look at one, you’d probably notice the words “licensing agreement” somewhere near the beginning. This typically means that you are licensing the right to use some content while the custodian still actually owns it. So while you could leave all the physical books on your bookshelf right now to someone in your will, you can’t do the same for the books in your Kindle library. What you can do is give another person the right to access and manage your account if you pass.
On the other hand, you probably do own any photos, video, or other content you’ve uploaded to a site like Facebook or TikTok (although you may have granted the custodian the right to use them in various ways by agreeing to the TOSA). That’s because these were yours to begin with. So if you want to leave your self-generated photo or video collection to someone, you can do that. However, it’s not wise to just give this person the right to manage your online accounts and assume they’ll be able to access everything. Technical problems, hackers, and various things you may have agreed to in the custodian’s TOSA are why you shouldn’t rely on a third party as your only storage option. If photos or videos are important for you to pass on, save a copy to a hard drive or other physical media. This may save your heir a lot of stress later on.
Do I Still Need to Include Digital Assets in My Will If I Selected a Legacy Contact on the Custodian’s Site Already?
Yes. New Jersey laws specify that designating access and management through an online tool provided by the custodian takes priority over other methods, including designation through a will. However, not all custodians offer this online tool. You should use it when available (Google and Facebook have this option), but assign digital asset rights in your will to cover accounts where it isn’t available.
What If I Don’t Use the Online Tool or Make a Will?
In this case, what happens to your data is controlled by the terms of each custodian’s TOSA. In some situations, no one may be able to access the data. For this reason, we recommend using online tools and adding your digital rights wishes to your will.
Contact Van Dyck Law Estate Planning Attorneys
The Van Dyck Law Group is home to experienced estate planning attorneys who are always ready to answer your questions and address your concerns. Please contact us for more information about creating a will or planning your estate at 609-293-2562.