Digital Assets: When You Are Gone Are They Gone Too?

Most people today have some type of digital or on-line account where they store a variety of information including photos, bank, brokerage and related financial accounts, Pay Pal accounts, and the like. For security reasons, this information is usually password protected. So, what happens to the on-line family photos once you are gone? Will you take these precious photos to the grave with you? Will your named Personal Representative or the person appointed by the Probate Court be able to gain access to your digital accounts and liquidate your on-line bank and brokerage accounts so the proceeds might go to your named beneficiaries?

Recently, the State of Michigan, in recognizing the problems in this area, adopted the Fiduciary Access to Digital Assets Act (effective June 27, 2016), whereby you can name a fiduciary and give him or her power to access some or all of your accounts and/or the content thereof. This can be done in a Will or Trust Agreement, which would typically come in to play once you are gone, as well as a Power of Attorney, which would be effective as long as you were living (unless earlier revoked). It can also apply to a guardian or conservator for a minor child or protected person.

While a user may use an online tool (if there is one) to direct the digital custodian to disclose or not disclose to a designated recipient some or all of the user’s digital assets, including the contents of electronic communications, which will “trump” any contrary directive given in a Will, Trust Agreement power of attorney or other record, many accounts do not have such an on-line tool or, if they do, the user has never used it. However, any directive given in a Will, Trust Agreement, power of attorney, or other record overrides a contrary provision found in a terms of service agreement.

When disclosing the digital assets of a user the digital custodian may, at its sole discretion, grant the fiduciary or designated recipient full access to the user’s account or partial access sufficient to perform the tasks with which the fiduciary or designated recipient is charged, or provide them with a copy of the record of any digital asset that on the date the digital custodian received the request the user could have accessed. It can assess a reasonable fee for the cost of disclosing digital assets under this act. The disclosure could be in the nature of a catalogue of electronic communications or the content of such communications sent or received by the user, depending upon the directions given by the user or as ordered by a court.

For purposes of computer fraud and unauthorized computer access laws, a fiduciary acting within the scope of his/her duties is an authorized user of the property of the decedent or protected person. A fiduciary may also request a digital custodian to terminate the user’s account. If the digital custodian refuses to comply the fiduciary or designated recipient may petition the appropriate court for an order directing such compliance.

Don’t leave your digital assets in limbo. If you have valuable digital accounts and want a trusted family member or friend to be able to access them if you are gone or otherwise cannot do so, either utilize an on-line tool to name them as your designated recipient or nominate a person to have such access in a Will, Trust Agreement or Power of Attorney. If you already have such estate planning documents in place, sometimes a simple amendment to these instruments can achieve such goals, at a modest cost, especially when compared to the legal “gymnastics’ one may have to go through if such directives are not in place.