It is important not to overlook Digital Assets as you establish a will or trust to distribute your estate upon death. Digital assets have value you may want to pass on to beneficiaries. However, online assets are protected by passwords and may not be available to anyone, including designated heirs, if you fail to take steps to make them accessible. Planning for the status of your digital assets after you die can also help prevent identity theft or continued charges for subscription services that your estate could be required to pay.

Depending on your wishes, some digital assets may be passed on to family members or charities after your death, and some may be deleted. But failing to make your wishes known may lead to costly and time-consuming disputes between heirs, fiduciaries administering the estate, or custodians of those assets.

What Are Digital Assets?

Digital assets are intangible assets that are stored digitally. Digital assets may have a monetary or sentimental value to the owner. Some common forms of digital assets include:

• Cryptocurrencies
• Online bank accounts, brokerage accounts, and stock portfolios
• Blog or website content
• Social media content
• Picture and document storage
• Music, video, and gaming accounts and purchases
• Subscription services
• Manuscripts, artistic creations, and computer files
• Shopping and reward programs
• Recipes stored online

Failing to properly account for these assets and leave instructions can lead to disputes among family members seeking ownership.

California Laws Regarding Digital Assets and a Decedent’s Estate

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) governs access to a person’s online accounts when the account owner dies or loses the ability to manage them. The act extends the powers the fiduciary would normally have to manage a decedent’s tangible property to include management of their digital property.

A fiduciary is a person appointed to manage another person’s property in their best interests. After an individual’s death, the executor of their estate (or “personal representative”) or trustees of a revocable trust are fiduciaries with legal duties to protect the interest of the decedent’s estate. The RUFADAA also applies to conservators supervising wards’ finances and agents acting under powers of attorney.

The RUFADAA was drafted in 2015 by the Uniform Law Commission, an organization that provides states with nonpartisan legislation meant to bring clarity and stability to critical areas of state statutory law. California adopted its version of the RUFADAA in 2016.

California’s law does the following:

• Authorizes a decedent’s personal representative or trustee to access and manage their digital assets and electronic communications, as specified in a will or trust
• Authorizes a person to use an online tool to give directions to the custodian of their digital assets regarding the disclosure of those assets
• Authorizes a person who has not used an online tool to give directions regarding the disclosure of digital assets in a will, trust, power of attorney, or other record
• Requires a custodian of the digital assets to comply with a fiduciary’s request for disclosure of digital assets or to terminate an account, except under certain circumstances, including when the decedent has prohibited this disclosure using the online tool
• Makes custodians immune from liability for acts or omissions done in good faith in compliance with these provisions

Under the law, a custodian of digital assets is a business that makes, stores, or provides digital assets, like Facebook or Amazon Music. The “online tool” referenced in the law may be provided by an online platform (such as Facebook’s or Amazon Music’s terms of service) or by explicit consent in the decedent’s estate planning document.

In short, a digital assets clause in a will or trust should spell out the individual’s wishes for disclosure and transfer of digital assets after their death. However, a custodian’s online tool would take precedence over a will or trust, and tools like Google’s Inactive Account Manager and Facebook’s Legacy Contact, which allow the account user to name a successor, take priority over all other instructions.

Transferring Digital Assets

Not all digital assets are transferrable. In general, digital files that you own and have a monetary or tangible value can be transferred as part of a will or another legal conveyance. Blog, website, and online business content may be of value and transferrable, too. However, domain names are licensed, and their transfer would be subject to the terms of agreement. Alternatively, they could be promptly purchased when the current license expires.

Other licensed digital assets, like software, may or may not be transferrable, depending upon the licensing agreement. Subscription services should be properly closed upon an account holder’s death so additional charges against the estate do not accrue.

Finally, in addition to proper documentation of the decedent’s desires and instructions about where to find digital assets, a will or trust should designate how and to whom digital assets will be distributed.

Advantages of Hiring the Inheritance Litigation Attorneys at Albertson & Davidson, LLP

If there are flaws in your loved one’s will or trust or its administration that put valuable digital assets at risk, the aggressive lawyers at Albertson & Davidson, LLP can help you pursue a challenge and preserve your inheritance. Our litigation team has the trial experience and resources to handle all points of a will or trust contest. We understand the necessity of including digital assets in estate litigation and can take proper action against digital executors who fail to properly safeguard digital assets. Our firm has experience in estate litigation involving digital assets and a proven track record of success in California estate litigation cases.

If you have questions about how digital assets are or are not addressed in a trust or will, contact us for a free initial consultation. We have offices in Los Angeles, San Francisco, Orange County, and Silicon Valley to serve clients throughout California. Contact Albertson & Davidson online or at (800) 601-0170. We stand. We fight. We win.

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