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The New World of Digital Assets

By Richard J. Bowler, Esq.

Recently I met with clients to go over their estate plan and to update their Wills, powers of attorney and other documents. They provided information about their assets, reviewing with me their bank accounts, personal property, brokerage accounts and real estate holdings. I then asked: “what about the rest of your assets?” They looked puzzled until I introduced them to the new world of digital assets.

What is a digital asset? Digital assets can include many categories you may not give much thought to, like email accounts, social media, such as Facebook and the different apps that you may keep on your cell phone. Generally speaking, digital assets include any electronic record and online account that you may have.

How Are Digital Accounts Controlled?

The recent developments regarding security breaches at Equifax and other institutions highlight the fact that we are now in the digital age where “digital assets” and other digital websites have become an important part of our day-to-day living. So we must be careful to include in any estate plan the disposition of these kinds of assets. When you sign your Will, you may think you have given your Executor the authority to handle any asset that you controlled during your lifetime. In fact, many of these online sites are governed by what is referred to as “terms of service.” Typically, when you sign up for any online account, you must first agree to the terms of service.

In many cases, terms can go on for pages and you just check the box. It is safe to say that few people actually read the terms of service. Frequently those agreements fueled in many cases by privacy concerns, limit the access by any individual other than the account holder and unfortunately, if the account holder is incapacitated or dies, important information could be forever lost. It is common that people will not necessarily share their user IDs and passwords with others, such as family members. Such limitations can have grave consequences. In some cases, you may be able to get a court order, but such a course would be expensive and time-consuming. There was a case recently where a business owner, who had all of his records on an online account, suffered a stroke and the family could not gain access to his account in order to save the business. While a business owner may need secrecy when it comes to passwords and other access to accounts, such secrecy can prove detrimental in such a case.

Estate Planning for Digital Assets

New York (and many other states) has enacted laws to deal with the issues that arise in the digital world. Under New York law, anyone can set up an “online tool” that would confer authority on a named individual to gain access to a person’s digital assets. This designation would supersede any direction in a power of attorney or a Will or trust. The New York law defines a digital asset as any record that is electronic. If this “online tool” is not utilized, then you can name an individual through the use of a power of attorney, Will or trust. Some people may prefer to designate a particular person to have authority limited to digital assets only. While you may choose to authorize another person to handle your digital assets, it is important to provide explicit instructions to your designee as to your wishes. There are, potentially, many instances where you may not wish to allow anyone to have access to certain online information that you have stored. In fact, you may wish to have certain information destroyed so it does not see the light of day.


We are in the “brave, new world” where assets are not necessarily so easily defined and managed. At one time, your assets were reflected by the monthly statements you received, the deeds in the recording office, the personal property in your home and the cash in your wallet. In today’s world of digital assets, we need to better understand how to adjust to the digital world and how to make sure that we have not cut off (unintentionally) access to our accounts from those who may need to access them in the event of death or disability. To that end, if you do not utilize the “online tool,” or, if it is not available, you need to be sure that you have a power of attorney and a Will that confers that authority on a trustworthy family member or friend. Failure to put together an estate plan that includes digital assets could mean that your accounts will be governed by the terms of service, thereby running the risk that no one will be able to gain access to needed information.