New Jersey Law

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From Facebook to Bitcoin – Planning Your Cyber-Estate

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When clients who come to our office for estate planning, that is for a will and power of attorney, they generally plan to direct what will happen to their financial or tangible assets. Tangible assets generally include interests in real estate, savings, life insurance, investments, and personal possessions such as cars, jewelry and watches, artwork, dishes, silverware, and collections. Assets may also include less tangible things such as intellectual property: patents, trademarks, copyrights. In recent years digital assets have become an important, but often overlooked, consideration in estate planning. Digital assets typically include such things as photographs or videos, emails, texts, documents, music playlists, personal blogs, digital books, gaming materials, whether stored on a personal hard drive or through a file sharing site. Digital assets may also include a person’s subscriptions and accounts including Amazon, Netflix, Apple, PayPal, online magazines and other online subscriptions, and loyalty or points programs. Many people also receive bills and financial statements online, and handle all their financial matters through personal accounting programs such as Quicken or QuickBooks. All of these cyber assets require usernames and passwords for access. Of course, any virtual financial assets, such as Bitcoin would be a significant digital asset, which also have more complex access protocols. Through comprehensive planning of a person’s estate, these digital assets can become accessible to the designated fiduciary: an executor or administrator of an estate or a person with a power-of-attorney.

Digital estate planning: it is not as simple as making a list of log-in information and passwords that can be attached to a will; it presents a number of challenging practical and legal issues. At the outset it is important to consider any Terms of Services Agreement (“TOSA”), the agreement every online service requires you to select “agree” before finally getting access. (Usually done without reading the TOSA.) TOSAs often preclude or limit the ability of a person to transfer the content or assets that are maintained on the platform. Many, however, allow permissive access to a person who has been given proper authorization which can be contained in the will or power-of-attorney. Federal laws designed to protect digital assets are also important to consider in the estate planning context. For example, the Stored Communications Act (“SRA”) focuses on providing privacy, including regulating storage of and access to electronic communications. The SRA provides criminal penalties for a person who “intentionally accesses” electronic information through a provider without proper authorization. The SRA also prevents the provider from disclosing the information to someone without lawful consent of the originator. The Computer Fraud and Abuse Act (“CFAA”) creates criminal liability for violation of a TOSA. As noted above, many TOSAs include provisions that allow access upon appropriate authorization by the originator. It is evident that it is important to provide the fiduciary the necessary permission and authorization for access. Of course, this presents one of the more practical impediments: how to maintain security of the account information while making account access information available to the fiduciary. In addition, the account access information needs to be kept current with changed access information and new accounts.

Many of these potential impediments can be avoided or made easier to navigate with appropriate estate planning and guidance. Appropriate authorizations in a will, trust, or power of attorney are a good starting point. There are online tools that are available to facilitate the transfer of the digital assets is known as an “afterlife management” service. Such a tool may make the collection and distribution of the digital asset more efficient; however, it does not replace the need to provide the authority to a fiduciary to access the digital assets through appropriately drafted estate planning documents. Most states, including New Jersey, have enacted legislation that grants fiduciaries presumptive authority to access digital assets. The law, however, places great emphasis upon whether the deceased or incapacitated user expressly consented to the disclosure of the digital asset to the fiduciary either through the provisions of an online tool, such as an afterlife management service, through the tools contained in various online services, such as Goggle’s Inactive Account Manager, through an estate planning document, or through a combination of these approaches. It is evident that providing proper authorization and access to a fiduciary is an essential component of a plan to ensure that a person’s cyber assets are properly protected, distributed, or disabled. As the laws continue to evolve, and online providers continue to modify their TOSAs, it is important to work with a knowledgeable attorney to develop a plan and to provide appropriate authorization to the fiduciary – executor, trustee, administrator, attorney-in-fact – to facilitate the proper handling of a person’s online presence and distribution of their cyber-assets.

For more information on cyber estate planning, or related matters, contact firm partner, Steven A. Kunzman


DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.