Our lives are increasingly digital. We bank online, store important documents in the cloud, manage investments through apps, communicate via email and social media, and some of us hold significant wealth in cryptocurrency. Yet when it comes to planning for incapacity, many people overlook their digital assets entirely. If you become unable to manage your own affairs, can your agent access your email, manage your cryptocurrency, or handle your online accounts? The answer depends on how your power of attorney is drafted and what laws apply.
What Are Digital Assets?
Digital assets encompass a broad range of online accounts, data, and virtual property. They include email accounts such as Gmail, Outlook, and Yahoo, social media profiles on Facebook, Instagram, LinkedIn, Twitter, and others, cloud storage services like Google Drive, Dropbox, and iCloud, online banking and financial accounts, cryptocurrency wallets and exchange accounts, digital photos, videos, and documents, domain names and websites, online business accounts and e-commerce stores, loyalty programs, airline miles, and reward points, digital subscriptions, software licenses, and gaming accounts, and intellectual property stored digitally such as manuscripts, music, and artwork.
For many people, the combined value of their digital assets, both monetary and sentimental, is substantial. Yet without proper planning, these assets can become inaccessible or lost if the owner becomes incapacitated.
The Challenge of Digital Asset Management
Managing digital assets on behalf of an incapacitated person presents unique challenges that traditional powers of attorney were not designed to address.
Terms of service barriers. Most online platforms have terms of service that prohibit sharing login credentials or allowing another person to access your account. Even with a valid power of attorney, platforms may refuse to grant access to your agent, citing their terms of service or privacy policies.
Encryption and security. Modern digital security measures, including two-factor authentication, biometric locks, and encryption, can make it nearly impossible for someone to access your accounts without your cooperation. If you become incapacitated, these security measures can lock out everyone, including your agent.
Federal computer fraud laws. The federal Computer Fraud and Abuse Act (CFAA) and similar state laws make it a crime to access a computer or online account without authorization. There is ongoing legal debate about whether an agent under a POA has "authorization" to access the principal's digital accounts.
Lack of physical presence. Unlike a bank safe deposit box or a filing cabinet, digital assets do not exist in a physical location that an agent can visit. Accessing them requires login credentials, security codes, and sometimes specific devices.
The Revised Uniform Fiduciary Access to Digital Assets Act
To address these challenges, the Uniform Law Commission created the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This model legislation has been adopted by most US states and provides a legal framework for fiduciary access to digital assets.
Under RUFADAA, a user can authorize their fiduciary (including an agent under a POA) to access their digital assets. The law establishes a priority system for determining access. First, the platform's own online tool for designating a trusted contact or legacy user takes priority. Second, the user's instructions in their estate planning documents (including a POA) are considered. Third, the platform's terms of service apply as a default.
This means that if you want your agent to have access to your digital assets, you should both use any online tools offered by your platforms (such as Google's Inactive Account Manager or Facebook's Legacy Contact) and include digital asset provisions in your power of attorney.
How to Include Digital Assets in Your POA
To ensure your agent can manage your digital assets, take these steps.
Grant Explicit Digital Asset Authority
Your power of attorney should include specific language granting your agent authority over digital assets. General financial powers may not be sufficient. Consider including provisions that authorize your agent to access, manage, and control your digital accounts and digital assets, communicate with online service providers on your behalf, access your electronic communications and social media accounts, manage your cryptocurrency and digital financial accounts, and take any action necessary to preserve, protect, or dispose of your digital assets.
Create a Digital Asset Inventory
Prepare a comprehensive list of your digital assets, including the platform or service name, your username or account identifier, the type of account (financial, social media, email, etc.), and the approximate value of any accounts with monetary worth.
Do not include passwords in the POA document itself, as it may become a public record. Instead, store password information separately in a secure location and make sure your agent knows how to access it.
Use a Password Manager
A password manager allows you to store all of your login credentials in one encrypted location, accessible with a single master password. Share the master password with your agent (or store it in a secure location they can access) so that they can reach all of your accounts if needed.
Popular password managers include 1Password, LastPass, Bitwarden, and Dashlane. Many of these services offer emergency access features specifically designed for situations where the account holder becomes incapacitated.
Set Up Platform-Specific Tools
Many platforms offer their own tools for account management in case of incapacity or death. These include Google's Inactive Account Manager, which allows you to designate trusted contacts who can access your data after a period of account inactivity. Facebook offers a Legacy Contact feature that lets you choose someone to manage your account if it is memorialized. Apple has a Digital Legacy program that lets you designate legacy contacts.
Setting up these tools in advance complements your POA and provides an additional path for your agent to access your accounts.
Special Considerations for Cryptocurrency
Cryptocurrency presents unique challenges because of its decentralized nature. Unlike a bank account, there is no customer service department to call if you lose access. If the private keys to a cryptocurrency wallet are lost or inaccessible, the funds may be permanently unreachable.
If you hold cryptocurrency, ensure that your agent knows about your holdings, has access to your private keys or seed phrases (stored securely), understands how to access your hardware wallets or exchange accounts, and is named as an authorized user on any exchange accounts, if possible.
Consider including specific cryptocurrency provisions in your POA that address these concerns. Given the technical complexity, you may also want to identify a trusted advisor who can assist your agent with cryptocurrency management.
Planning for Your Digital Future
Digital assets are a growing part of our financial and personal lives, and planning for their management during incapacity is increasingly important. A power of attorney that ignores digital assets leaves a significant gap in your planning.
By including digital asset provisions in your POA, creating a digital asset inventory, using a password manager, and setting up platform-specific tools, you can ensure that your agent has the access they need to manage your digital life effectively.
mypoa.ai can help you create a power of attorney that addresses digital assets alongside traditional financial and healthcare powers. After generating your documents, follow the execution instructions included with your download to ensure proper signing, witnessing, and notarization.