25 May 2021

By Robert Hobkirk

In Estate Planning

The Digital Age has created a need for new types of estate planning not originally anticipated by traditional estate planning methods. Our lives are now inundated with new technology, and you also need to protect your online accounts in order to effectively safeguard all your assets. Unfortunately, digital assets are relatively new to the legal world, and the laws governing them are still a work in progress. However, there are still ways you can help protect and preserve your digital legacy.

What Are Digital Assets?

A “Digital asset” is an electronic record that an individual has a right or interest in. It includes all of your digital files and online accounts on your phone, computer, tablets, and other digital devices.

Do I Have Digital Assets?

You may think that you have a limited online presence, but you most likely have more digital assets than you realize. For example, go over this list and see how many online accounts apply to you:

  • Email accounts
  • Social media accounts (Facebook, Instagram, TikTok, YouTube, Twitter, Pinterest, Snapchat)
  • Digital music (Spotify, iTunes)
  • Frequent flyer miles
  • Credit card rewards accounts
  • Marketplace accounts (Amazon, Etsy, eBay)
  • Health insurance rewards accounts
  • Fitness tracking devices (Fitbit)
  • Digital streaming accounts (Netflix, Amazon Prime, Disney, Hulu)
  • Cloud-based storage for data or photos
  • Gaming accounts
  • Online dating accounts

Once you have determined all your digital accounts, you should make a list of them, along with the usernames and passwords for each account. This will make it easier for you to incorporate them into your estate planning documents.

Arizona Estate Planning And Technology

Historically, estate planning laws have been slow to keep up with new technology. On August 6, 2018, Arizona enacted the Uniform Fiduciary Access to Digital Assets Act (“Digital Assets Act”). The Digital Assets Act is meant to provide a fiduciary with the authority to access, manage, or distribute a deceased or incapacitated person’s digital assets.

Current state and federal law provide protections for unauthorized access to digital assets and electronic communications, similar to the protections provided for health and medical information (EX: HIPAA). The law also states that a person can be prosecuted for unlawful access to digital assets, stored communications, or the unauthorized release of confidential information.

Typically, upon the incapacity or death of an owner, the personal representative, agent, or trustee has the authority to control tangible property (such as bank accounts, real estate, IRA, stocks, etc.). However, before the Digital Assets Act was enacted in 2018, there was no applicable law to control the digital assets of a deceased or incapacitated person.

How Does The Digital Assets Act Work?

The Digital Assets Act provides that a fiduciary, with the appropriate authority, is an authorized user of a decedent’s digital accounts and will not be guilty of any criminal act under Arizona law. The Digital Assets Act prioritizes the distribution of digital assets into a three-tier system:

  1. Use of an Online Tool: You can use an online tool provided by a custodian to name a third party to have access to your digital assets. It’s important to note that the use of this type of online tool overrides any direction given in a Will, Trust, or Power of Attorney.
    1. For example, Facebook has a “legacy contact” tool where you can select who you would like to control your Facebook account if you pass or become incapacitated. If you use Facebook’s online tool and name John as your legacy contact to manage your Facebook account, but name Sarah as your personal representative in your estate planning documents, only John will be able to access your Facebook account (see below for further discussion).
  2. Will, Trust, or Powers of Attorney: If you haven’t completed an online tool with the custodian, or the custodian does not provide one, you may be able to dispose some of your digital assets through a Will, Trust, or Power of Attorney.
    1. Keep in mind, most of your digital assets may not pass through your will at death. Why? Because you are not licensed to use certain online sites and the terms of agreement of those online sites may limit your rights.
    2. Examples of digital assets that you can’t pass through your will may include:
      1. Email accounts
      2. Social media accounts
      3. Apps on your devices
      4. Subscription services
  3. Terms of Service Agreement: If you haven’t completed an online tool and you don’t have an estate plan, the terms-of-service agreement for the online account will determine who can access your digital assets.

Let’s expand on our example from Number 1, above:

  • Aaron has a Facebook account and uses his account weekly to post updates and photos about his family. Aaron completed Facebook’s legacy contact tool years before he got married and had children, giving his brother John control over his account if he should pass or become incapacitated. Aaron forgot that he filled out the legacy contact tool and later completed his estate planning, naming his wife, Sarah, as his personal representative and power of attorney. Aaron has now passed. According to the Digital Assets Act, Facebook’s legacy contact tool overrides Aaron’s estate plan. What does this mean? This means that only John is legally entitled to access Aaron’s Facebook account. Obviously, this could pose numerous problems. What if John and Sarah are estranged? What if John wants to keep Aaron’s account, while Sarah wants to delete it? What if John has also since passed? How could you avoid this scenario?

Listing And Organizing Your Digital Assets

Currently, the best way to manage digital assets in your estate planning, and avoiding a scenario like Aaron’s, is by listing and organizing your digital assets. It’s important to plan how you want your digital assets handled so that they are dealt with according to your wishes. Your personal representative should also know how, and what documents are needed, to close your social media accounts.
In order to organize your digital assets, you will want to:

  1. Make a list of all your digital accounts.
  2. Write down all the usernames and passwords.
  3. Authorize your personal representative access to those accounts if you pass or become incapacitated.
  4. Make sure any online tools you complete are consistent with your wishes.
  5. Write specific instructions about what you want to happen with your digital assets (EX: naming accounts that you want preserved, memorialized, or deleted and naming who should be given access to each account).
  6. Include all this information in a letter to your executor and keep it with your other estate planning documents.

What About Minors And Digital Assets?

Another area of law that hasn’t caught up with current technology is how digital asset laws apply to minor children. If you have kids, chances are they are online and have a tablet, phone, and/or computer. Whether it’s YouTube, TikTok, Fortnite, Instagram, Snapchat, or other gaming sites, there is no shortage of sites aimed at those under 18 years old. What happens if you want, or need, access to your child’s social media if they become incapacitated or pass?

In some states, a parent or guardian of a deceased minor child is restricted from accessing their social media accounts. The internet laws can differ based on the state you reside and the age of the minor (some states have different rules for those under 13). Any parent with minor children should read, “Digital Asset Planning for Minors,” published by The American Bar Association. This well researched article provides information about the applicable laws and helps explains who is legally allowed to have access to a minor’s social media accounts.

When meeting with your estate planning lawyer, it’s important that you also discuss your minors’ digital assets. You will also want to discuss who you would like to manage those assets in the event that either you, or the minor child, passes away.

Contact Brown & Hobkirk, PLLC

While providing access to your digital assets may not have been in your original estate planning documents, it’s a good idea to review your estate planning documents and make any necessary changes in order to comply with the Digital Assets Act.

The experienced attorneys at Brown & Hobkirk, PLLC can help review your documents and ensure that the correct people have authorized access to your digital accounts.

Contact us today to schedule a consultation at one of our conveniently located offices in Scottsdale, Phoenix, Chandler, or Tucson.

Robert Hobkirk

Robert Hobkirk is a partner at the law office of Brown & Hobkirk, PLLC. He represents clients in legal matters involving trusts and estates, wills, probate law, and estate litigation, among other areas.
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