Digital Assets and Estate Planning in Michigan
Digital Assets and Estate Planning in Michigan
Protecting Your Online Legacy
The Expanding Definition of Property
For generations, estate planning in Michigan focused on familiar categories of property. Homes, bank accounts, family heirlooms, retirement funds, and business interests often made up the core of a person’s legacy. But as daily life has shifted into the digital world, a new category of property has emerged. Today, everything from online financial accounts to photographs stored in the cloud may hold just as much value as the tangible items a person leaves behind.
Clients often arrive at an estate planning meeting prepared to discuss their real estate and personal belongings, yet are surprised when asked whether they have cryptocurrency, social media accounts, digital payment apps, or cloud archives that hold important memories or records. These digital assets are now a routine part of modern life, but without proper planning, they can create significant challenges for families and fiduciaries after death.
How Michigan Law Treats Digital Assets
In Michigan, digital assets are treated as property, and they can be included in an estate plan just like any traditional asset. The law that governs access to these items, the Fiduciary Access to Digital Assets Act, helps ensure that personal representatives, trustees, and agents can access digital property when the owner gives explicit permission. Without such permission, companies often cannot disclose account contents, even to grieving families trying to gather essential information. The law creates a structure for allowing fiduciaries to manage these assets, but it still relies on a person’s clear and intentional instructions.
What Counts as a Digital Asset?
Digital assets encompass far more than people realize. They include cryptocurrency stored in online wallets, digital currencies linked to hardware keys, and NFTs that may carry significant financial value. They also include email accounts that contain important billing or financial notices, social media profiles filled with family history, online business accounts, digital storefronts, cloud files, subscription services, and even loyalty rewards or frequent flyer miles. Some of these assets carry monetary worth, while others hold deep sentimental significance. In either case, they require attention during the planning process.
The Risks of Overlooking Digital Property
The challenges arise when these assets are overlooked. A person may have a well-drafted will or trust that handles physical property thoroughly, yet leaves no guidance for what should happen to their digital life. Loved ones may know that a social media profile exists or that cryptocurrency is stored somewhere, but without instructions or access credentials, they may never be able to reach it. In the case of cryptocurrency, the loss of a password or key can mean the permanent disappearance of valuable property. For families trying to piece together a loved one’s records or sentimental items, the lack of access to digital accounts can create emotional and practical frustration.
If digital assets are not addressed, the probate court will distribute them under Michigan’s intestacy laws. Loved ones may inherit property that they cannot access, and valuable or meaningful items can be lost forever. Even worse, unattended accounts may become vulnerable to hacking or fraud.
The Importance of Clear Instructions and Account Settings
Michigan’s law recognizes that digital accounts need clear authority for access, but it also places great weight on the instructions that individuals leave behind. This makes personal planning essential. Online platforms often allow users to choose what happens to their accounts. For example, some social media sites allow users to designate a person who can manage or memorialize the account, while others permit a user to select settings for account deletion after a period of inactivity. When these tools are used, they override expressions in a will or trust, which is why clients must make these decisions intentionally.
Access instructions are equally important. While passwords and private keys should never be placed directly in a will, clients should store them somewhere secure, such as in a password manager, encrypted file, or sealed document held outside the estate plan. It is crucial that fiduciaries know where these instructions are kept. Without them, even the most carefully crafted estate plan cannot ensure access to digital property.
Protecting Your Digital Legacy
At Buckman Tuinstra & Brown, we help clients understand how digital property fits within the broader landscape of estate planning in Michigan. Through thoughtful guidance, we help clients protect both the traditional and modern components of their estates so their legacies are preserved with clarity and security.