Does Your Estate Plan Address Your Digital Assets?

digital assets in estate planningAfter you pass away, can your spouse or adult child manage your online banking and investment accounts or shut down your social media profiles? It all depends on how your estate plan is structured and who serves as the personal representative of your estate.

Until 2016, many companies operating online services were reluctant to assist family members who sought access to deceased loved ones’ digital assets. Since then, many states, including Michigan have enacted laws that address – and streamline – the process.

What Are Digital Assets?

Under Michigan’s Fiduciary Access to Digital Assets Act (FADAA), a digital asset is “an electronic record in which the user has a right or interest,” although it “does not include an underlying asset or liability unless the asset or liability is itself an electronic record.”

Under this broad definition, digital assets could include personal emails, brokerage accounts, a Facebook profile, or files saved on a cloud platform or digital dropbox. Digital assets connected to employment such as work-related business accounts, email, or similar electronic records are excluded.

The companies that administer and control the environments where a person’s digital assets reside are called “digital custodians.” Common digital custodians include banks, brokerage firms, Facebook, Apple, and Google.

But just because someone is appointed as a personal representative or other fiduciary to manage a deceased person’s affairs does not mean digital custodians can automatically grant them access to digital assets.

Who Can Access Digital Assets?  

Michigan law establishes four types of fiduciaries who can get at a decedent’s digital assets:

  • A fiduciary acting under will or power of attorney;
  • A personal representative acting for the probate estate;
  • A trustee acting under a trust; or
  • A court-appointed conservator.

Once a fiduciary is properly designated in a will or court order, Michigan’s law requires the fiduciary to provide the digital custodian with the following documentation:

  • A written request for disclosure;
  • A death certificate; and
  • A copy of a personal representative’s letters of authority, power of attorney, or certificate of trust that grants the fiduciary authority over the assets.

Though these documents are usually sufficient, it’s not uncommon for a digital custodian to also require:

  • A unique account identifier assigned by the custodian to identify the digital account;
  • Proof that the digital asset belonged to the deceased;
  • An affidavit stating disclosure of the digital assets is necessary to administer the estate; or
  • A finding of the court that disclosure is necessary to administer the estate.

What Documents Does the Digital Custodian Need to Provide Access? 

Once these thresholds are met, the FADAA permits the digital custodian to provide the fiduciary:

  • Full access to the account;
  • Partial access to the account that will allow for satisfactory completion of the tasks outlined in the will, trust or other accepted agreement; or
  • Copies of digital assets to which the deceased had access before his or her passing.

Upon presentation of the appropriate documentation, the digital custodian has 56 days to present the appropriate account information to the fiduciary. If the custodian doesn’t comply within that timeframe, the fiduciary may petition for a court order to access the digital accounts and assets.

Talk to an Estate Planning Attorney

The above is only an overview of how a loved one may access your digital accounts and assets upon your passing. The situation can get complicated if the decedent lived in another state or executed a will in a different jurisdiction with different laws.

If you have online accounts and digital assets that will require management by your loved ones after your death, consult an experienced estate planning attorney to ensure a smooth transition to a designated personal representative. Please contact the attorneys at Kreis Enderle – we will be happy to answer your questions and help you put your will and other documents in order.

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