Signing Off For Good:

How Death and Incapacity Impact Digital Assets

In today’s world, individuals store documents in electronic clouds instead of filing cabinets and upload photographs to Dropbox and Instagram instead of printing them for photo albums. They pay bills online, and many no longer receive paper bank statements: from finance to Facebook, password-protected sites are used to carry out daily affairs for business and pleasure alike, with a reliance on the security of access they promise. But what happens to that security, that promise, when one dies or becomes incapacitated?

Virginia has partially answered that question. While Virginia Code § 64.2–110 states “A personal representative of a deceased minor ... may assume the deceased minor’s terms of service agreement for a digital account ...”, it does not address access to the digital accounts of an adult, creating a grey area typically governed only by the policies of individual Internet service providers.

How to Prepare

The issue of managing digital assets on someone’s behalf is twofold, involving questions of access and ownership. Access is the issue more easily solved, if planned for in advance. To avoid putting loved ones through the tedious and sometimes-unsuccessful process of gaining access to one’s online accounts, an individual should create an inventory listing all digital assets, including web addresses, passwords, and security responses associated with each online account. The individual should store the list securely and update it regularly to reflect any changes. Some storage options might include a safe deposit box, a password-protected document, or a secure password-storage application. Since a will becomes a public document through the probate process, it is not the appropriate place to list any sensitive account information. Rather, an individual should limit access to one or more trusted individuals in the event of death or incapacity, making sure to supply any necessary passwords and security responses to access the information.

The issue of ownership, which deals with the widely variant terms of service associated with individual online accounts, is more complicated. In some service agreements, a power of attorney or the authority granted an executor or trustee is not recognized, and management of the account is limited to its owner. Though individual providers are working to address the issue of death and incapacity of account owners, there is currently no universal treatment of the issue. However, wherever possible, one’s proxy of choice should be added as an authorized user to mitigate potential conflict. Account owners should also consider addressing the issue of ownership as part of their estate planning.

Looking Forward

In July 2014, the Uniform Law Commission approved the Uniform Fiduciary Access to Digital Assets Act. This model code creates guidelines for the treatment of a deceased or incapacitated person’s digital accounts using the concept of “media neutrality”: if a fiduciary has the right to the tangible version of a document, that fiduciary has a right to its digital form. In other words, a document’s format, be it tangible or digital, is irrelevant.

It is important to note that the model code provides fiduciaries access to decedents’ accounts, but it does not necessarily grant fiduciaries control. For example, an executor of an estate may have access to a decedent’s PayPal account for inventory purposes but may not be authorized to transfer funds into or out of such account.

As of January 2015, Virginia has not adopted any version of the model code, although its previous acknowledgment of the issue, however inadequate, might be a hopeful sign.