The estate planning process allows individuals and families to determine what happens to their property during their lives and after death. Your estate plan should address more than just the typical assets, such as real estate, investments, or other physical property. A comprehensive estate plan should also protect and pass on your digital assets, such as social media profiles, creative works, or cryptocurrency. However, too many Texans overlook digital assets when leaving instructions to wind up their affairs and pass on their valuable property.
What Counts as a Digital Asset?
Digital assets include any property that you would store or access on a computer, smartphone, or other electronic device. Common examples of digital assets include:
- Digital financial assets, such as cryptocurrencies or online payment accounts (e.g., PayPal, Venmo, etc.)
- Cloud storage accounts
- Email accounts
- Websites, including domain names, code, and intellectual property
- Social media accounts
Digital assets, including intellectual property and cryptocurrency, can have real monetary value. Other assets, like cloud storage or social media accounts, may have greater sentimental value. Still, access to them can become just as important to family members after a loved one’s passing.
Texas Law on Digital Assets
Texas has adopted the Revised Uniform Fiduciary Access to Digital Assets Act. The act defines examples of property that constitute digital assets governed by the law, noting that such assets may fall under the probate process, depending on the specifics of an individual’s estate plan. Under RUFADAA, a fiduciary, such as an executor or administrator of a deceased person’s estate, can access the person’s digital assets if they comply with each platform’s terms of service. Many online service providers, such as cloud storage providers, social media platform operators, cryptocurrency exchanges, and financial institutions, allow users to designate a person to access their accounts after their death. Social media platforms may also allow users to determine whether to memorialize (preserve without permitting alteration) or delete their accounts after their deaths or give fiduciaries the option upon taking control of the account.
Common Digital Asset Oversights Texans Make During Estate Planning
Many people overlook the need to incorporate their digital assets into their estate plans, which can make it more challenging for personal representatives and family members to locate, access, and maintain those assets after a person’s passing. Some of the most common mistakes people make with digital assets during estate planning include:
- Failing to create an inventory of digital assets, including access details (e.g., usernames and passwords)
- Distributing personal property without treating digital assets separately, as digital assets may fall into the category of “personal property”
- Not ensuring that fiduciaries or family members obtain copies of cryptocurrency wallet keys, which can render tokens permanently inaccessible, even by platform operators
- Failing to ensure appropriate transfers of business website access details, which can disrupt operations for family businesses
- Not utilizing password manager software, which can make it easier to give fiduciaries or family members access to digital accounts after passing
Practical Steps for Digital Assets
Steps that Texans can take to ensure their family and representatives can locate and access digital assets after their passing include:
- Creating a secure digital asset inventory
- Specifically addressing digital account access in a will or other estate planning document
- Authorizing a named executor to access digital assets or designating a specific fiduciary to have access
- Using platform-provided tools to ensure transfer of access after death
- Storing access instructions with an attorney or other trusted fiduciary
Contact Our Estate Planning Firm Today
You may own important digital property, like cryptocurrency or social media profiles, and want to determine what happens to it if you become incapacitated or pass away. Contact Guest & Gray today for a free consultation with an estate planning attorney to learn more about the importance of incorporating digital assets in your estate plan.
