contact@kuiperlawfirm.com
832-626-0215

Estate Planning Part 4: Digital Assets

Estate Planning Part 4: Digital Assets

Almost everyone owns some form of digital asset, and the law governing estate planning for these unique assets is still developing. A digital asset is defined as “an electronic record in which an individual has a right or interest”(1) and includes cryptocurrency, domain names, email accounts, online banking accounts, anything stored on the cloud, and social media accounts. (2) The list is not exclusive – the term “electronic record” encompasses many other digital products and accounts, and each might require different treatment from the others. 

A common issue is access to digital assets after a someone’s death. A person can use estate planning tools, like wills, trusts and powers of attorney to direct access to and distribution of their digital assets, and in some cases these documents may provide access information. But what happens if access information is not provided, or the information has changed? Without the necessary passwords or other access information, fiduciaries (like an estate executor or personal representative) and beneficiaries will be unable to access the accounts and carry out a decedent’s wishes as to the asset or assets. In some cases, access to digital assets like an email or bank account will be necessary to obtain bills or debts owed by a decedent; for example, where billing on a certain account was paperless during the decedent’s lifetime. Access might also be necessary in order value and distribute or sell an assetThe Revised Uniform Fiduciary Access to Digital Assets Act (“TRUFADAA”), enacted in 2017 in Texas, providesome guidance for fiduciaries and estate planners.  

In some cases the custodian, or the person or company that maintains or stores a digital asset (e.g., Facebook), allows the user to use an online tool to direct the grant or prohibition of access to the asset after their death. The TRUFADAA provides that a user’s directions via the online tool override the user’s direction in a will, trust, power of attorney or other instrument, provided that the online tool allows the user to modify or delete the direction at any time. Absent the use of an online tool, the user’s will, trust, power of attorney, or other record which grants or prohibits access will control. If the user has not provided any direction as to access, the custodian’s terms of service agreement governs the right to access. (3) 

The TRUFADAA does not provide for carte blanche access to a deceased user’s digital assets under all circumstances. The act provides for disclosure of the content of electronic communications in some instances, and under other circumstances, only permits the disclosure of a catalogue of electronic communications (information about the sender, date, subject line, etc., but not the content of the communication). The statutory requirements for access to the content of electronic communications are stricter than those governing access to other digital assets. To obtain content disclosure, a custodian must submit a written request for disclosure, a certified copy of the user’s death certificate, certified copies of letters testamentary or the like, and, where the user did not provide direction using an online tool, a copy of the will or other instrument evidencing the user’s consent to disclosure to the requesting party. Additionally, the statute allows a custodian to request identifying account information, evidence that the account belonged to the user, or evidence of a court finding confirming the identifying account information and the user’s consent to disclosure, as well as a finding that the disclosure does not violate any applicable law and is reasonably necessary for the administration of the user’s estate. (4)  

An estate plan should address access to digital assets by directing or prohibiting disclosure and identifying the type of information to be disclosed. If a person desires their representative to have access to the content of their electronic communications (e.g., where such communications contain billing information), the will or other document addressing access should state so specifically. Otherwise, digital assets may be addressed in a will or trust in the same manner as any other property. 

Kuiper Law Firm, PLLC offers comprehensive estate planning services. If you have any questions about how to protect your assets or plan for the future, do not hesitate to contact us. 

_______________________________________________________ 

  1. Texas Estates Code § 2001.002 (8). 
  2. Texas Estate Planning (James Publishing) § 10:179.1. 
  3. Texas Estates Code § 2001.051. 
  4. Id. at §§ 2001.101 and 2001.102.