Everything from cryptocurrencies to social media profiles has become an integral part of everyday life.
These assets hold significant financial, sentimental, and practical value. In the event of death or disability, they may need to go through the probate process — a challenging task without proper planning. You need a plan in place that is tailored to Florida law and your specific situation to ensure your digital legacy is accessible and protected.
What are digital assets? Digital assets are all electronic and include:
- Financial assets: Cryptocurrencies (e.g., Bitcoin, Ethereum), online banking accounts, and investment platforms.
- Non-financial assets: Social media accounts, email, cloud storage, and digital subscriptions. These assets are typically password-protected or encrypted, making them difficult to access after the owner’s death. If not included in your estate plan, loved ones may be left without the tools to manage or retrieve them.
Digital assests and probate
The probate process in Florida ensures that properties are distributed according to a will or state laws. However, digital assets present unique challenges. Failure to plan for them can lead to:
- Lost value: Cryptocurrencies and online investments may be irretrievable without access to credentials.
- Emotional loss: Photos, videos, and personal messages may be lost forever.
- Legal complications: Federal privacy laws and platform terms of service may restrict access to the accounts by the executor or heirs.
- Security risks: Unmanaged accounts can be hacked or exploited. These risks underscore the importance of special attention to digital assets in estate planning.
- Absence of records: Executors often do not know about digital assets unless specified in the estate plan.
- Barriers to retrieval: Possession of passwords, encryption, and two-step verification can complicate asset recovery.
- Privileged constraints: Florida’s Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) specifics that digital accounts can only be accessed if explicitly granted in the estate planning documents.
- Confounded cryptocurrencies; Cryptocurrencies are lost without private keys, making them extremely difficult to access due to their high dependency on these keys.
Steps to manage digital assets in probate
- Inventory your digital assets: List all digital accounts. Examples include: Financial: cryptocurrency, online banking. For non-financial: social media, email, cloud storage. Include usernames, account numbers, and note the purpose of each account.
- Safeguard the keys: Store access points to accounts, which may include: passwords and recovery options and private keys that unlock cryptocurrency wallets. Use a password manager or encrypted storage solution to keep this information safe and up to date.
- Include digital assets in your estate plan: Update your estate plan to: name a digital executor to manage your online account and explicitly grant fiduciaries permission to access digital property, if desired, in a manner consistent with RUFADAA.
- Use platform tools: Many platforms provide tools for managing accounts after death. Google: The “Inactive Account Manager” allows you to assign trusted contacts. Facebook allows you to designate a legacy contact or memorialize your account. And Apple offers the “Digital Legacy” feature for transferring account access.
Special cryptocurrency considerations
Cryptocurrencies present unique challenges due to their decentralized nature.
To secure them:
- Protect private keys: Private keys should be stored in a safe place, either within hardware wallets or encrypted digital vaults.
- Document information about wallets: Document the wallets you have, whether hot or cold, and the procedures for granting access.
- Tax planning: Work with a tax professional to understand the tax implications of cryptocurrency and how it might affect your heirs.
- Include cryptocurrencies in your estate plan: Indicate how those assets should be transferred or liquidated andidentify an executor knowledgeable about handling digital investments.
How does RUFADAA come into play?
Florida’s RUFADAA — Revised Uniform Fiduciary Access to Digital Assets Act — establishes rules for accessing digital accounts after death.
Key points include:
- User consent: Services are designed with user privacy in mind, so estate-planning documents should include explicit consent to allow fiduciaries access.
- Access hierarchy: RUFADAA prioritizes platform-provided tools first, followed by directions in estate documents, and finally court orders. You must include explicit language in your estate plan to allow access to digital assets.
Risks of neglecting digital assets
Failure to plan for digital assets leads to:
- Lost assets: Cryptocurrencies and other accounts might become inaccessible forever.
- Family disputes: Confusion regarding digital property could lead to conflicts among heirs.
- Legal delays: Privacy laws and platform policies can prolong the probate process. Digital assets must be treated proactively with proper protection measures.
What does an estate planning attorney do?
A skilled estate planning attorney can help you:
- Create a comprehensive inventory of your digital assets.
- Draft legally compliant documents to manage digital property.
- Navigate Florida’s RUFADAA and resolve legal barriers.
- Develop strategies for handling cryptocurrencies and other complex digital investments.
Working with an attorney ensures your digital legacy is secure and accessible.
Protecting your digital legacy
It is important to consider regularly updating your estate plan to reflect your wishes for your digital asset portfolio because technology rapidly evolves and new forms of digital assets emerge regularl
Educate your family about the digital assets you have, how to access them, and how to include them in an estate pl
Work with the attorneys, financial planners, and — most importantly — technological consultants to build a comprehensive plan.
Addressing what happens to a person’s digital assets in probate is no longer optional but necessary in today’s world. Whether it’s cryptocurrency or social media and cloud storage, these are rapidly becoming key components of your legacy. If not properly planned, they could become inaccessible, lost, or mismanaged.
Stephen J. Lacey, JD, LLM, is a member of the law firm Lacey Lyons Rezanka. His practice areas focus on estate planning and probate.
