Michigan residents may own numerous digital assets. Ownership rights must be protected and preserved for future generations. Additionally, digital assets may involve access information that is difficult to obtain. As a result, digital assets must be included in your estate plan. An experienced estate planning attorney understands Michigan laws regarding digital assets. Thus, it remains vital to contact an experienced attorney to include digital assets in your estate plan.
Define Digital Assets
Digital assets may include any information stored electronically that holds value. Common assets include:
- Intellectual property- Domain names, blogs, websites, any digital content you or your company created and posted on-line
- Digital photos and videos
- Online accounts- Banking, 401K, brokerage accounts, PayPal, Venmo
- Digital subscriptions- Streaming services, online newspapers, any other subscription services
- Cryptocurrencies- Bitcoin or other online wallet currencies
Michigan Law Regarding Digital Assets
The Michigan Legislature passed the “fiduciary access to digital assets act” (MCL 700.1001) back in 2016. The Statute has numerous sections that define how digital assets may be accessed before or after death. In other words, the legislation details what happens when a person becomes incapacitated or when a loved one passes away. This legislation remains important as our lives become more dependent upon electronic devices. An experienced estate planning attorney understands these complicated laws and may explain them to you.
On June 27, 2016, the Michigan Legislature revised the digital assets act. The revision entitled “The Michigan Fiduciary Access to Digital Assets Act (FADAA) (MCL 700.1014) provides fiduciaries with a legal path to access digital assets. The FADAA provisions include:
- Fiduciary authority- The act outlines the legal roles of fiduciaries including; executors, beneficiaries, trustees, and agents. If authorized by the account holder, the fiduciaries may access and manage digital assets.
- Scope- The law defines limits between different assets. For example, handling an email account remains quite different from managing a bank account or stock portfolio.
- Hierarchy of Instructions- Service providers often have specific rules regarding who may access accounts. This may take precedence. Also, will and trust documents may outline control of digital accounts.
- Owner requests- Original owner may already have set up directions with provider of online accounts. In this case, the owner’s directions may take precedence.
Once again, an experienced estate planning attorney will guide you through the necessary steps to ensure your estate, or your loved one’s estate is fully protected.
The Importance of Including Digital Assets in Estate Planning Documents
Many people use electronic devices for business and financial activities. Additionally, photos, videos, and precious memories may be stored electronically. So, it makes sense to include access to financial matters and memories in your estate plan. Other reasons may include:
- Legal and financial issues- If you become incapacitated, or when you pass away, your loved ones may not be able to access necessary information without legal authorization. In fact, it may be illegal for them to do so without going to probate court first.
- Identity theft- Knowing your trusted family member, or other individual you appoint can access your financial information during a critical time may prevent illegal activity with your accounts. In other words, you need a trusted individual watching your accounts if necessary.
- Estate administration – If you are incapacitated, or when you pass away, your family will be in a very vulnerable place. This would not be the time for them to search for passwords, go to court, and struggle to settle your estate.
Necessary Steps to Incorporate Digital Assets into Estate Plan
Digital assets are now a part of most people’s life. Including these assets in your estate plan remains vital. Several steps will ensure you and your heirs are protected. First, contact an experienced estate planning attorney. Second, inventory your digital assets. Third, decide who you can trust with vital information regarding your accounts and passwords. Fourth, outline specific instructions regarding each asset. Fifth, notify person you choose as trusted party. Remember, do not list any account information on will or trust documents. It’s important to note that wills are filed with the county and various people view the document. Basically, your attorney will guide you on steps two through five. To sum up, contact an experienced estate planning attorney and make sure your digital assets are part of your estate planning documents.