Your Online Assets and Accounts Will Survive You After You Pass Away. Make Sure Your Estate Plan Addresses What Happens to Them.

By Stewart C.W. Weiner

If you have assets that no one knows about, does not know how to access, or lacks knowledge of your plans for after you pass away, your estate plan is failing you and your family in several fundamental ways. Your estate plan should bring clarity, not confusion, and make things easier for your loved ones, not harder. But even people who have otherwise dotted all the I’s and crossed all of the T’s of their estate plan can have a big blind spot when it comes to their digital assets and online accounts that play an ever-expanding role in our lives. 

We all have online accounts, passwords, apps, subscriptions, automatic bill-pay programs, and scores of other assets that exist in cyberspace but have profound impacts IRL (“in real life,” as the kids say). You may be the only one who knows about them or how to access them. But without accounting for your digital assets as part of your comprehensive estate plan, what happens to them after you die is largely out of your control and may be out of the control of your loved ones. 

Individuals have been playing catch-up when it comes to accounting for digital assets in their estate plans, and for a time, the law was behind as well. Before the passage of Michigan’s Fiduciary Access to Digital Assets Act (FADAA), MCL 700.1001, et seq. and similar laws in other states, many companies operating online services and accounts were reluctant to assist family members who sought access to a deceased loved one’s digital assets. This led to understandable frustration and potentially adverse financial consequences for accounts that require ongoing payments or other attention.

The FADAA seeks to remedy this problem by establishing clear rules and directions for fiduciaries and account providers regarding access, information, control, and disposition of digital assets upon a person’s death. The act accomplishes two primary objectives;

• Providing designated fiduciaries (such as trustees, executors, conservators, and personal representatives) with the legal authority to manage digital assets, accounts, and electronic communications in the same manner they manage tangible assets and accounts.
• Providing custodians of digital assets and electronic communications (i.e., e-mail providers, website hosts, social media sites, banks, and other companies who the user interacted with online) the legal assurance they need to interact with their user’s fiduciary while honoring the user’s privacy expectations for their personal communications.

Digital Assets and “Custodians” Defined

The FADAA defines a digital asset as “an electronic record in which the user has a right or interest” but “does not include an underlying asset or liability unless the asset or liability is itself an electronic record.” This definition includes such common assets as e-mail accounts, bank, credit card, brokerage, and similar accounts, social media profiles, or cloud storage accounts. 

The companies that administer and control the sites and platforms where a person’s digital assets reside – such as Google, Apple, Facebook, or any other administrator of an online account – are called “digital custodians.” 

Who Has Access to a Decedent’s Digital Assets? 

Four types of fiduciaries may obtain access to and control over a decedent’s digital assets under Michigan law:

• A fiduciary acting pursuant to a will or power of attorney.
• A personal representative acting on behalf of the probate estate.
• A trustee acting under the terms of a trust.
• A court-appointed conservator.

How Does a Fiduciary Gain Access to Digital Assets?

An authorized fiduciary must provide a digital custodian with all of the following to gain access to online information and accounts: 

• A written request for disclosure.
• The account owner’s death certificate.
• A copy of a personal representative’s letters of authority, power of attorney, or certificate of trust granting the fiduciary authority over the assets.

What Is an Authorized Fiduciary Entitled to Regarding Digital Assets 

Once a fiduciary meets these thresholds, digital custodians have 56 days to provide one of the following to an authorized fiduciary: 

• Full access to the account;
• Partial access to the account that will allow for completion of any tasks or obligations outlined in the will, trust, or other accepted agreement; or
• Copies of digital assets to which the decedent had access before they passed away.

Whether you have an existing estate plan or are just beginning to compile one, make sure to consider your digital and online assets and provide the directions necessary to ensure they are appropriately attended to, accounted for, and closed in an orderly and conclusive manner.

If you have any questions regarding digital assets in your estate plan, please contact Stewart Weiner at Maddin Hauser.