
Brian Hemphill
Last updated: Dec 10th, 2019
Reading time: 9 minutes
One breath summary: As more of our lives are lived online, the notion of what makes an asset has expanded to include our valuables in the digital world. These digital assets span everything from financial data like electronic brokerage accounts and cryptocurrencies to cherished keepsakes like our personal email, social media photos and online gaming avatars. That’s why it’s more important than ever to protect our digital assets—and plan for how they will be managed in the event of death or disability.

Introduction
A generation ago, a person’s estate was generally considered to include their physical belongings, their real estate and their financial assets. Like so many other aspects of modern life, the idea of an “asset” has been completely transformed by the Internet. Nowadays, as more of our daily activities take place in digital spaces, online services and accounts contain some of our most cherished and personal assets, from family photos and private correspondence to online gaming avatars, music, movies, medical records and emerging types of digital information like cryptocurrencies. Not all of these assets have substantial monetary value, but they have deeply sentimental value—and they could put tremendous strain on your family if they were lost or stolen.
These are questions that wouldn’t even have occurred to someone 50 years ago, or in some cases even 10 years ago. What happens to your Facebook account when you die? Who will have access to your email and text messages? What will happen to your Bitcoin, to your personal website, or to your cloud storage services like Dropbox if you’re the only person who knows the password to those key accounts.
Like anything else in your estate, these digital assets need to be protected and planned for in the event of death or disability. Read on to learn more about how you can safeguard your digital assets today—and prepare your family for the future.

What are digital assets?
This may be the first time you’ve considered the term “digital assets,” but unless you’ve been living in a cabin off the grid, you own plenty of them—and they have a central role in your daily life.
Put simply, your digital assets are all of your electronically-stored information, whether on your personal devices or in the cloud. That includes any of your digital intellectual property, as well as any records that are included in electronic catalogues and communications.
Glance through your browser history and around your home. Your email accounts, online banking accounts, cryptocurrencies, social media profiles, gaming avatars, online photos, blog posts, or any other information stored in the cloud is a digital asset. Any music, movies or books that you’ve purchased on iTunes, Kindle or other devices are digital assets. Even your customer rewards points or airline miles could be considered digital assets. Even if you’re not around to cash in on the tens of thousands of frequent flyer miles you’ve racked up, shouldn’t your loved ones be able to take advantage of them?
These digital assets are not as easy to see or list as our tangible assets, but collectively, they make up a huge—and deeply personal—portion of our lives. Most digital assets are also governed by the terms of service of each online space. Digital assets can get complicated fast, which is why it’s so important to protect—and plan for them.

How can I protect my digital assets?
Protecting your digital assets has never been more important—and that begins with your everyday use of these data, products and services.
Fraud and identity theft are the biggest risks of our online world—and these crimes are rising year after year. Some of the largest and most respected corporations in the world such as Target, Capital One and even major credit bureaus have lost millions of customers’ sensitive information.
While there’s no way to protect against every data breach, the most important step you can take is to use a secure password manager like LastPass to make sure that you are constantly using strong, regularly-updated passwords. Windows and Apple computers also have built in password managers that make sure you have safe and convenient access to your passwords.Even if you don’t choose to use a dedicated password manager, it is critical that you change your passwords regularly. Don’t use the same password for each account, and that you don’t use basic, easily guessable passwords like your birthday, your anniversary, or “password,” which is, astonishingly, among the most common passwords in the world.
But what happens to your passwords in the event of death or disability? Even the most secure passwords are useless to your estate if knowledge of the password goes with you. The last thing you want to subject your family to during their grieving is the headache of navigating your digital assets in addition to all of your tangible ones.
That’s why planning for your digital assets is absolutely vital to comprehensive, twenty-first century estate planning.

How should I include digital assets in my estate planning?
As part of your estate plan, you nominate a representative —known as a fiduciary—to manage your tangible assets and affairs. What you may not know is that the person responsible for managing your tangible assets also needs the access—and express legal authority—to manage your digital assets. While you are still alive, that fiduciary is an agent acting under your power of attorney; after your death, that fiduciary would be the personal representative of your estate, nominated by your Will, or the trustee of your living trust.
The most important aspect of accounting for your digital assets in your estate planning is to ensure that your estate planning documents explicitly authorize your fiduciary to access and control your digital assets.
It is also helpful to keep your account and password information up-to-date, and make sure your fiduciary has access to that information. Dedicated password managers like LastPass can make that significantly easier. That way, your fiduciary at least avoids the pitfall of not being able to access your assets, which could leave you vulnerable to fraud and identity theft.
In addition, consider user agreements. Every time we sign-up for a new digital service, we agree to a lengthy service agreement that most of us never read carefully. Many of these user agreements for popular service providers like Google, Apple and Yahoo! require legal proceedings to provide access to fiduciaries. Without proper planning, these agreements can become complex legal roadblocks to access and protecting your assets.
That’s why it’s important to know the law—and plan accordingly.

What laws affect how I should plan for my digital assets?
The laws surrounding digital assets have grown ever more complex as the Internet has become foundational to modern life. Federal laws around digital assets have been in place since the 1980s with the Stored Communications Act (SCA) and the Computer Fraud and Abuse Act (CFAA), yet as the prevalence of digital assets has expanded, so too have the laws governing digital assets. For those of us here in Oregon, the most important law to understand is the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).
In short, RUFADAA authorizes fiduciaries to take all necessary actions to administer an estate, yet it also ensures that they do not have blanket access to all digital assets, protecting the privacy of the person who has passed or suffered a disability. Under RUFADAA, fiduciaries are permitted to access a specific list of digital assets, provided they have been given “express consent” to access the content. From there, the fiduciary will be subject to the service’s terms of agreement. Without that “express consent,” there may be no way for your fiduciary to access the assets. The longer your digital assets linger on the Internet without being managed by someone with your interests in mind, the more vulnerable they are to fraud and identity theft.
One advantage to RUFADAA is that it places great weight on the privacy of the person who has passed. Yet that privacy comes at a cost. This new law has also made it more difficult and complex for fiduciaries to access and manage digital assets. That’s why it’s important to have a trusted partner who can help you plan for your entire estate, including the parts of your estate that exist online in 1s and 0s.

Summary
In the twenty-first century, planning for your digital assets is every bit as important as thinking through the particulars of your physical belongings, real estate and financial accounts. With a little bit of planning, an experienced law firm like McCord & Hemphill can make sure that the person responsible for your estate has the information and legal authority to manage your assets. That way, instead of headaches and heartache during their difficult period of grieving, your family can access and enjoy the digital assets that you have chosen to leave behind for them.