Managing Online Accounts during Disability and after Death

March 2017

Email accounts, online banking and investment account access, music, photo and data storage accounts, Facebook, Instagram, Twitter and other social media accounts are all forms of digital assets. On a day-to-day basis, many of us spend more time using these types of assets than the more traditional forms of real and personal property and their contents may have more financial or sentimental value to us than traditional assets. While the law has long provided mechanisms for the management of real and personal property during incapacity and the succession of such assets at death, recently enacted legislation now provides a uniform framework for third-party access to digital assets as well.

The new law distinguishes between a catalogue of electronic communications (i.e., the envelope) and their actual content and establishes default rules regarding third-party access. Under the default rules, executors, trustees and agents under a power of attorney are generally entitled to an account catalogue that identifies certain information regarding electronic communications in the account (e.g., sender, recipient, date, time) but are not afforded access to the actual content of digital files and communications. These default rules can be changed in any of the following three ways:

  1. Via an online tool offered by the account provider. An account provider may offer account settings options which address future access by third parties. For example, Google and Facebook both provide an option that permits an account holder to (i) direct that his or her account be deleted upon his or her death or (ii) designate an individual to have access to the account at such time (and specify the extent of such access). An account holder may modify or delete designations using an online tool at any time. While helpful, these online tools have important limitations. An online tool may only permit an account holder to designate named individuals (rather than whoever is acting in a fiduciary role) and may require such designated individual to have his or her own account with the account provider.

  2. Under a will, trust agreement, power of attorney or other instrument. If an account holder has not utilized an online tool, or if the account provider does not offer one, the account holder’s direction in a will, trust, power of attorney or certain types of other instruments will govern third-party account access. In the event of both a designation via an online tool and a contradicting provision of a will, trust, power of attorney or other instrument, the online tool designation will control.

  3. By the terms of a service agreement. If an account holder does not address the issue of third-party account access, the account provider’s terms of service agreement will control. Such terms of service agreements allow account providers to (i) determine the extent of account disclosure that will be provided and (ii) require a court order to make any such disclosure. When signing up for a new online account or service, many account holders agree to an account provider’s terms of service without reading them, let alone considering or understanding their impact. As a result, the terms of service likely will not reflect an account holder’s wishes regarding third-party account access.

Simply keeping a list of login information does not replace the need for a plan, as maintenance of an updated list is unlikely and poses a security risk and, as a legal matter, using a third party's login credentials to access their account without the proper legal authorization may violate federal and state law. In light of the new legislation, it is easier than ever for account holders to provide for appropriate management and succession of their digital accounts. We recommend that you take the following steps:

  • Create a list of your online accounts. Maintain an updated list of accounts you would like a third party to be able to access in the event of your incapacity or death, particularly those that require management (e.g., bank accounts, investment accounts, accounts for paying bills online) or contain information (including digital photos, video, records, correspondence, etc.) that you would like to pass on to others. Keep this list with your important legal and financial documents.
  • Include provisions for your digital assets in your estate plan. Your power of attorney, will and certain types of trusts should be updated to include directions regarding third-party access to and control of your digital assets. In addition, a knowledgeable estate planning attorney can advise whether utilizing available online tools would further or frustrate your digital asset planning objectives.

To update your current estate planning documents to appropriately provide for the management and succession of your digital assets, please contact a senior member of our Trusts and Estates Department listed below.

Katy H. Donlan at +1 212 592 1522 or [email protected]

© 2017 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.