In an increasingly digital world, estate planning isn't just about tangible assets like real estate and family heirlooms. If you own digital investments such as cryptocurrency, manage social media accounts, store photos or videos in the cloud, or run an online business, you must consider incorporating digital assets into your estate plan.
At the Estate Planning & Elder Care Firm of Michigan, our experienced Howell estate planning lawyers help clients ensure that all of their digital and traditional assets are protected and passed on according to their wishes. Here's what you need to know about including digital assets in your Michigan estate plan.
Understanding Michigan's Fiduciary Access to Digital Assets Act
In 2016, Michigan passed the Fiduciary Access to Digital Assets Act (FADAA) to provide clearer guidelines for how digital assets should be handled in estate planning and probate. The FADAA allows you to grant your executor, trustee, or other fiduciaries the authority to access and manage your digital assets. Under this law, you can provide instructions for disclosing your digital assets in your will, trust, or power of attorney.
MCLA § 700.1002(j) defines digital assets as electronic records in which a person has a right to or an interest in. Digital assets encompass a wide range of online accounts, files, and resources you own or control. Some common examples include:
- Social media profiles, such as Facebook, Instagram, Twitter, etc.
- Financial accounts
- Cloud storage accounts holding photos, videos, and other files
- Online businesses and their associated accounts
- Loyalty program rewards and frequent flier miles
- Any online accounts such as email, shopping, or subscription services
- Cryptocurrency like Bitcoin or Ethereum
While you may not think of digital assets like these as part of your estate, they can hold significant financial and sentimental value. Without proper planning, your loved ones may have difficulty accessing or managing these assets, or your personal representative may have a harder time probating your estate.
Steps You Should Take to Protect Your Digital Assets
Not protecting your digital assets would be a major estate planning mistake. To ensure your digital assets are properly cared for as part of your estate plan, our Howell MI lawyers recommend taking the following steps:
- Inventory your digital assets. Make a comprehensive list of all your online accounts, subscriptions, and files. Include URLs, usernames, and passwords.
- Decide what should happen to each asset. Do you want social media profiles memorialized or deleted? Should a digital currency account be liquidated and added to your estate or passed directly to an heir? Consider each asset's practical and sentimental value when deciding how you want your digital assets passed on after your death.
- Provide access information to your fiduciary. Your personal representative will need user names and passwords to manage your digital assets. Consider using a password manager or an encrypted file to securely store and share this sensitive data.
- Include digital asset instructions in your estate plan. Our estate planning lawyers can work with you to update your will, trust, and power of attorney documents, including provisions addressing your digital assets. You may want to write a letter of instruction outlining your detailed wishes for each asset.
- Back up essential files. Regularly save copies of cherished photos, videos, and documents in a secure location, such as an external hard drive kept with your estate planning files. That way, your loved ones can access them without relying on third-party platforms.
Let Us Help Safeguard Your Digital Legacy
At the Estate Planning & Elder Care Firm of Michigan, our knowledgeable estate planning lawyers are well-versed in Michigan's evolving digital asset laws. We can help you review your online footprint and craft a personalized estate plan protecting your digital and traditional assets.
Whether you're looking to pass on precious family photos and videos or are an entrepreneur with a thriving online business, we'll work with you to develop a comprehensive strategy aligned with your unique needs and goals and that will let you take control of your digital legacy.