The primary focus of most estate plans is protecting, and eventually, distributing estate assets. Until fairly recently, defining your “assets” was pretty straight-forward. Traditionally, “assets” meant real and personal property, such as a home, vehicles, bank accounts, and securities and even intangible assets such as intellectual property rights. In the 21st century, however, there is yet another type of asset that must be included in your estate planning decisions – digital assets. In the near future, digital assets may even become a significant percentage of your total estate assets. The Fargo estate planning attorneys at German Law Group explain what your digital assets are and why they need to be included in your estate plan.
Our Changing Digital Universe
The world around us has become digitized in what may seem, to some, like the blink of an eye. If you stop for a moment and think about it, you will realize just how much of your life is now stored electronically and how many tasks you accomplish electronically. Communication – both business and personal – is likely handled via email, text, or social media sites like Facebook, Instagram, or Twitter. Bill paying is probably handled via electronic funds transfer or debit card over the company’s website. Investment accounts can frequently be accessed online and you may even do most of your trading and investing that way as well. If you own a business, your business probably depends on your internet presence to bring in new clients/customers too. In short, the number of digital assets, records, and accounts you have is undoubtedly more than you realized before you stopped to think about it. The increased use of digital assets needs to be incorporated into your estate plan to ensure that all your assets are protected.
What Digital Assets Need to Be Included in Your Estate Plan?
Every estate is unique; however, just as there are some common types of tangible or intangible assets found in the average estate plan, there are also some common digital assets that might be part of your estate plan, including:
- Computing hardware, such as computers, external hard drives or flash drives, tablets, smartphones, digital music players, e-readers, digital cameras, and other digital devices
- Any information or data that is stored electronically, whether stored online, in the cloud, or on a physical device.
- Any online accounts, such as email and communications accounts, social media accounts, shopping accounts, photo and video sharing accounts, video gaming accounts, online storage accounts, and websites and blogs that you may manage.
- Domain names
- Intellectual property, including copyrighted materials, trademarks, patents, and any code you may have written and own
North Dakota Access to Digital Assets Law
One of the biggest estate planning concerns where digital assets are concerned is access to those assets after you are gone. To address those concerns, many states are now passing laws that clarify who may access digital assets and under what circumstances. North Dakota recently enacted several provisions of the Uniform Fiduciary Access to Digital Assets (UFDAA). The provisions enacted permit individuals serving in certain fiduciary roles to access digital information of a user; specifically fiduciaries acting under a Last Will and Testament or Power of Attorney, a decedent’s Personal Representative, a Guardian, a Trustee or a custodian.
To avoid a problem with two documents that conflict, the provisions delineate a document hierarchy detailing which documents override others. The hierarchy of documents has some confusing exceptions which is why you should always check with an experienced estate planning attorney if you find yourself acting as an Executor, Trustee, or other fiduciary in need of access to the digital assets of another person. In general, however, the hierarchy is as follows:
- User directive online tools (such as Google’s Inactive Account Manager) take precedence over Wills, trusts, power of attorney or other records.
- Online tools or Wills, trusts, power of attorneys or other records take precedence over terms-of-service agreements.
- barring the existence of (1) or (2), federal law or a terms-of-service agreement may control.
At the request of an individual, a custodian must either fully or partially disclose or prevent disclosure to a designated recipient. This encompasses all digital assets and their contents. Custodians also have some authority. Custodians have the ability to allow either partial or full access to the disclosed assets, so long as the disclosure allows the requesting fiduciary to satisfy his or her charged tasks. A custodian may reasonably charge requesting parties, choose not to disclose information deleted by the user and choose not to disclose partial information if the segregation creates an undue burden. If the user is a decedent, however, the Personal Representative of an estate must be given a catalog of the digital assets but not the contents, as a general rule. There are special circumstances when content must be given to a Personal Representative.
Contact Fargo Estate Planning Attorneys
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about digital assets in North Dakota, contact the North Dakota estate planning attorneys at German Law Group by calling 701-738-0060 to schedule an appointment.