By: Melissa L. Steinberg, Esq.

Many pitfalls face aging Americans in an increasingly digital world. High rates of senior citizens using online financial platforms have resulted in unprecedented wealth concentrated in so-called “digital assets,” including everything from social media profiles and photographs to cryptocurrency and non-fungible tokens (NFTs). However, most Americans do not know how to integrate these assets into comprehensive estate plans. Traditional estate planning tools, such as wills and trusts, may attempt to transfer ownership of digital assets, but if fiduciaries lack the authority and information necessary to access those assets after a customer’s death, it is unlikely that the customer’s wishes will be fully realized without additional planning.

Federal and New York state law criminalize access to online accounts, apps, and other digital assets in violation of providers’ terms of service agreements, which often treat post-death access by a friend or family member as “hacking,” even with the customer’s permission. Some providers, such as Meta and iCloud, allow users to authorize post-death access by certain individuals through “digital legacies.” However, these designations are service-specific and are not blanket authorizations across all digital platforms. Coinbase, one of the largest online depositories of cryptocurrency, does not offer a legacy planning option; instead, Coinbase determines, on a case-by-case basis and in its sole discretion, whether a particular individual will be given account access following a customer’s death. If Coinbase does not approve post-death access, it may be very difficult, if not impossible, to access a customer’s account post-death.

Updates to the New York Estates, Powers, and Trusts Law in 2016 eliminated the distinction between internet-based and brick-and-mortar institutions, enabling fiduciaries to access assets and information held by either, and giving the customer’s wishes greater weight than service providers’ policies. However, the law is not always applied uniformly, and there is an urgent need for all Americans to carefully plan for the disposition of digital assets at death.

There are steps each New Yorker should take to safeguard digital assets and ensure that they are distributed according to their wishes after death:

1. Customers should thoroughly inventory their digital assets, including online financial accounts, and make a comprehensive list of those accounts, including account numbers and login credentials. This inventory should be a separate document, and not included in a will, trust, or other instrument which may become a public record upon a customer’s death.
2. Customers should also designate persons to access their accounts through any available “digital legacy” programs. Information on the availability of such programs is generally available in the Terms and Conditions for each service provider.
3. Once the above steps are taken, store this documentation in a safe place, such as a home safe, and make sure that chosen fiduciaries are aware of these documents and how to access them.
4. It is also crucial to periodically update the inventory as assets are acquired or dispensed with, or as login credentials change.

For assets and accounts for which digital legacies and similar designations are not available, customers should consult with experienced elder law counsel, such as the team at Littman Krooks LLP, who can advise on advance directives, including authorizations for release of electronically stored information, that ensure the orderly disposition of digital assets after death or while a customer is still living, but incapacitated.