The Handling of Digital Property in Estate Planning in Wisconsin
What is digital property?
Digital property consists of online accounts that are protected by a password and/or PIN (Personal Identification Number). Some accounts might have monetary value, and other accounts might be sentimental such as photo libraries. Many digital accounts have no value but would be considered an electronic record in which a person has a right or interest.
Examples of digital property are nearly endless but include:
- Online bank accounts (most of which require multi-step authentication processes to access)
- Online retirement accounts
- Data on your phone or other electronic devices
- Electronic bill payments
- Credit card accounts that are paperless
- Email accounts (which may include helpful communications and monthly reports from various other online accounts)
- Social media accounts like Facebook, Twitter, Instagram, and LinkedIn (plus many others)
- PayPal accounts
- eBay accounts
- Online shopping accounts with saved credit card information
- Photo libraries
- iTunes accounts and other music libraries (which might be licensed property, not owned)
- Cloud services
- Web domains, personal or professional websites
- Online memberships
- Home security systems
- Any accounts with automatic renewal or payments such as insurance policies, virus protection accounts, tuition payments to kids/grandkids schools, church contributions, other charitable contributions, newspapers, Sirius radio accounts, etc.
- Entertainment accounts like Netflix, Hulu, and online gaming accounts
- Healthcare online accounts like MyChart platforms
What happens to digital property after a person passes away?
Digital assets are handled similarly to other property after a person dies. Thus, if the deceased does not have a will, the rules of intestacy apply to digital property as they do for all estates without a will. A challenge with addressing digital property, however, is that survivors are frequently unaware of a deceased’s digital property, especially if there was no will.
In April 2016, the Wisconsin Digital Property Act was signed into law to aid in distributing assets that include digital property. In part, the Act helps personal representatives and fiduciaries gain access to the deceased’s digital property. It also helps courts and practitioners handle digital property similar to physical property.
If the deceased has a will, distribution of all assets should be clearer, including digital property.
To help with that clarity, when creating your will, be sure to incorporate your digital property and provide the following information, if possible:
- An updated and thorough inventory of all online accounts and passwords and what the account consists of
Many people create a document or spreadsheet that the lawyer and/or a named person has access to that lists your accounts and security information. If you choose to store all your accounts and passwords in one digital place, such as an app or somewhere on a device, make sure your will highlights where this information can be found, or let your lawyer know how to access it. It’s important that your online account information be updated regularly when passwords change or when accounts are added or deleted. Take note that access to your phone might be necessary for two-step authentication on some accounts.
It can be helpful to also indicate what the account consists of, such as “personal email” or “former employer pension” or “account linked to PayPal” -- anything that provides helpful details about that account.
- A named digital property representative/digital executor
Choose one or more trusted persons to handle the digital property component of your will. You may want different people to handle different accounts. Ideally, these people have some level of technical expertise. At a minimum, your estate plan should allow the executor of your will to designate a person to handle digital property. (Keep in mind that access to an account does not mean that person is entitled to any value assigned to that account.)
- Specific plans for each account
Some online accounts, such as Facebook, have a process to follow when someone dies. In addition, some accounts allow you to choose someone to close or manage your account in your personal settings. Still, you should specify what you would like done with each account on your inventory list. Do you want some accounts closed, like social media or email? Do you want someone to take over an account, such as a photo library or ancestry profile? What do you want to do with financial/bank accounts that you earmarked for a child’s college tuition or to pay your property taxes? (Many banks and credit unions allow you to name each financial account for their intended use, such as “college” or “property tax,” which can be helpful.)
The most important thing is to identify as many accounts as possible, especially those with monetary value.
How can a lawyer help with digital property management -- before and after death?
The Wisconsin Digital Property Act helps clarify the law regarding digital property to some extent, but the process of identifying and accessing that information in Wisconsin estate planning is still being fine-tuned.
While creating an inventory and designating people to manage digital accounts is the responsibility of the person who owns the estate, a lawyer can assist in a number of ways.
When making a will, an estate planning lawyer can help you by:
- Overseeing (be the keeper of) your online account information. Your lawyer should be updated when accounts are added or deleted or when passwords are changed. You can submit this information to him/her via email or hard copy updates. You could also give your lawyer information needed to gain access to the place where this information is kept, like an app on your phone.
- Keeping a key (but not the only key!) to a safe where you have documents with this information. At a minimum, you should tell your lawyer where the key is kept.
- Helping create a digital property document that explicitly names individuals who may access your accounts, including powers of attorney if you become incapacitated.
- Assisting in creating a trust to keep digital property out of the courts, if this seems necessary.
After death, a lawyer can assist with digital property by:
- Helping identify the accounts that need legal action to access.
- Making sure the information is in the right hands, as per instructions in the will.
- Working with the executor to sort out details.
- Representing loved ones who work to gain access to digital property or who want to ensure that access requests are legitimate.
- Remaining objective about information discovered in any digital accounts and focus on the legal issues specifically.
- Providing assistance with probate matters or with intestate matters, if there was no will.
- Advising clients on processes of recovering and dividing digital and other assets.
Planning for digital property, in summary
The days of waiting for bank/financial statements and bills to arrive in the mail to help determine a deceased’s financial situation are practically over. While best practices are still being established, it is clear that digital property is becoming increasingly more important in estate planning.
Individuals must be proactive in creating and updating an inventory of all digital accounts, including passwords and PIN numbers. Instructions are needed for each account, and access information to the deceased’s cell phone (for multi-step authentication processes) should be provided. Information should be kept with a lawyer or trusted individual. If necessary, a lawyer can assist with the creation of a trust to keep digital property out of court.
The estate planning lawyers at Murphy Desmond can help you with digital property and other details of your will or estate plan. It’s important to regularly update your will for changes in family, marital status, asset/property acquisition or loss, and digital property data.
Published March 25, 2019