Digital assets? After the death of a loved one, I regularly discuss with family members how to probate an estate and what to do with important issues like credit card accounts, debt, and personal belongings. Until recently, I never discussed what to do with online accounts such as Facebook, Twitter, and LinkedIn. The issue just never came up.
Times have changed. Cyber discussions are now as relevant as how to handle a change of address request with the post office.
A tremendous amount of personal and often sensitive information is stored on these sites. Should they remain there forever? Should the accounts be deleted? How can they be deleted if the account holder is now deceased? What happens if the personal representative does not have the password to the account?
Digital Assets: NY Times article triggers a change in law
Recently, The New York Times published an article on sites that assist consumers (who are alive) in managing these “non-financial, digital assets.” These sites generally allow for you to designate a beneficiary of your digital assets or to designate a representative to manage the accounts after your death.
Terms of service agreements and privacy policies govern access to social media and email accounts, and most expire when a user dies and are not transferable. Surviving family members are unable to access social media accounts or valuable digital assets, since most state laws that govern the actions of personal representatives or executors were enacted before email and social media became widespread and do not account for digital property.
Michigan’s enactment of the Fiduciary Access to Digital Asset Act
In 2016, Michigan enacted the Fiduciary Access to Digital Assets Act which became effective on June 27, 2016. The act applies only to electronic records in which an individual has a property right or interest, which do not include the underlying asset or liability unless it is itself an electronic record. Digital assets are electronic records in which individuals have a right or interest. As the number of digital assets held by the average person increases, questions surrounding the disposition of these assets upon the individual’s death or incapacity are becoming more common. These assets, ranging from online gaming items to photos, to digital music, to client lists, can have real economic or sentimental value.
Planning is key. Generally, most of the issues can be addressed with an appropriate estate plan, without the necessity of using one of these third party vendors. Save the money and use a competent attorney who understands these issues.