By Ryan McNeill, Attorney at law
Estate planning is no longer limited to real estate, bank accounts, and personal property. Today, much of a person’s life exists online. Email accounts, cloud storage, social media profiles, online banking, cryptocurrency, subscription services, and digital photographs may all become part of an estate after death or incapacity.
Without proper planning, family members and fiduciaries (individuals legally authorized to act on another person’s behalf, such as executors, trustees, agents under powers of attorney, or guardians) can face significant legal and practical barriers when trying to access these assets.
In North Carolina, the Revised Uniform Fiduciary Access to Digital Assets Act provides a legal framework that governs how fiduciaries may access and manage digital assets.
What Are Digital Assets?
Under North Carolina law, digital assets generally include electronic records in which an individual has a right or interest. These can include personal assets like email accounts, social media accounts, digital photographs and videos (including those stored in the cloud), and passwords. However, they also include business and financial related records like online banking portals, Paypal balances, subscription services, cryptocurrency and digital wallets, websites and ecommerce related logins.
The law distinguishes between the “content” of electronic communications and other digital assets. For example, the substance of an email message is treated differently from basic account information or a catalog of communications.
North Carolina’s Digital Asset Law
North Carolina adopted the Revised Uniform Fiduciary Access to Digital Assets Act in 2016. The statute applies to fiduciaries acting under trusts, powers of attorney, and guardianships while a person is living. It also applies to personal representatives administering estates of a deceased person in North Carolina. The law allows certain fiduciaries to request access to a deceased or incapacitated person’s digital assets, but access is not automatic. In many cases, custodians such as email providers or social media platforms may require specific documentation before releasing information.
Importantly, the statute recognizes that users may provide instructions directly through online tools offered by service providers as a first system of priority. If a user designates account instructions through one of these tools, those directions can override conflicting instructions contained in a will or other estate planning document. However, if there is no online tool offered or used, then the user’s power of attorney, guardian, or personal representative (if the user is deceased) has rights to access.
Why Digital Assets Matter in Estate Planning
Many people assume that a spouse or child will automatically have access to online accounts after death. In practice, that is often not the case. Federal privacy laws, terms-of-service agreements, and state statutes may restrict access unless proper authorization exists. North Carolina law specifically states that fiduciary access remains subject to applicable terms-of-service agreements and other laws, including privacy and copyright laws.
As a result, a carefully drafted estate plan should address digital assets directly. This may include:
● Specifically authorizing fiduciaries to access digital accounts
● Naming trusted individuals to manage digital property through online tools
● Creating clear instructions for preserving or deleting accounts
● Maintaining secure records of digital assets and credentials
● Coordinating online account settings with estate planning documents
If you have older estate planning paperwork, like powers of attorney, a will or a trust, those may not have appropriate language to authorize the fiduciaries named in those documents to access digital assets. The North Carolina statutes require more than just general language about digital assets, so it is recommended that those documents specifically authorize disclosure of the user’s digital assets and content of electronic communications.
Estate Administration Challenges
Digital assets can create unexpected complications during probate and estate administration. Some accounts may contain financial value, while others hold sentimental importance. In some situations, family members may not even know certain assets exist. Cryptocurrency, online businesses, monetized content, and cloud-based financial records can all be overlooked if no inventory exists. North Carolina law permits custodians to provide full access, partial access, or copies of digital records, depending on the circumstances and the custodian’s policies. Custodians may also charge reasonable administrative fees for disclosure requests.
Planning Ahead
Digital asset planning has become an essential part of a comprehensive estate plan. As more personal and financial information moves online, individuals should consider how fiduciaries will manage those assets in the future.
For North Carolina residents, reviewing wills, trusts, and powers of attorney with digital assets in mind may help avoid significant complications later.
The recommendation of Brinkley Walser Stoner, PLLC’s estate planning team is that in addition to authorization within estate planning documents, that you consider preparing a letter to keep with your estate planning documents that you maintain over time that includes the following to assist your fiduciaries and personal representative as it relates to assets, including digital assets:
1) A list of key professionals you work with such as your financial advisor, CPA, attorney, banker, and insurance agent. This will help them get a head start by being able to call and rely on information already on hand.
2) A list of key accounts and passwords. You can consider using an encrypted password manager program (many are free or very low cost) to maintain everything in one place, or you could maintain a written list in a secure place. Many accounts also have two factor authentication and only with access to your cell phone or email account will they be able to act on your behalf to access that information, so the list should include your phone lock screen passcode.
3) Information about digital accounts with balances that may not otherwise be known or accessible otherwise. This includes cryptocurrency wallet information, but also can include things like PayPal, Amazon and Ebay (if you are a seller on those platforms, and payment apps through Apple, Venmo and Cash App.
4) Your wishes with respect to online accounts and data within those accounts. For example Facebook allows for pages to be transitioned to memorial pages, but you may prefer that the data be deleted and the account made inactive.