There are many types of digital assets that must be taken into consideration during estate planning. Even if an individual has no crypto-assets, they likely have social media, email and cloud storage accounts.[1]

This article will focus on death and incapacity planning options available for accounts with cloud service providers (CSPs) and, in an effort to help practitioners advise clients in this area, STEP, through its Digital Assets Global Special Interest Group (SIG), has produced the first edition of the STEP Digital Legacy Scorecard (the Scorecard).[2] The Scorecard is intended to evolve and the criteria assessed will expand as pre-planning tools develop across the industry. The idea and original content for the Scorecard was created by the late Sharon Hartung TEP and is being used with permission under a licence granted to STEP. Sharon dedicated her personal and professional life to the advancement of technology in the estate-planning sector. In addition to the Scorecard, Sharon left a rich legacy with many contributions. These include sponsoring the creation of the comprehensive and easy-to-use STEP Digital Assets Inventory and helping shape STEP’s public-facing Digital Memories campaign.[3]

The challenge

Planning for accounts maintained with CSPs presents a challenge for individuals and their advisors. Generally, CSPs have varying options and procedures in their terms of service agreements (ToSAs) in the event of a user’s death or incapacity (if even addressed) and also use different terminology in connection with this type of planning feature. To complicate the matter further, jurisdictions vary in their rules of fiduciary access to accounts with CSPs. This is significant because:

• information and documents stored online may be required to be obtained by fiduciaries to fulfil their duties;
• some online accounts, such as social media and photos or videos held in the cloud, could hold significant sentimental value to the individual’s family and friends; and
• accounts belonging to a deceased or incapacitated individual may lead to identity theft or other cybercrimes if the accounts are left dormant.

Including a clause in a will, power of attorney or trust agreement stating who should get access to a user’s digital assets is only a starting point. The expressed legal right to access digital assets does not always equate to being able to gain access in a timely or cost-effective manner.

Best practice

The SIG has seen a wide range of approaches to death and incapacity by CSPs. Some ToSAs have no provisions; some have a modest reference, often in relation to the automatic termination of the contract; a few have included procedures for an individual to control the deletion or dissemination of their account; and others have included procedures for fiduciaries to close or access accounts.

STEP’s view is that best practice in this area is for practitioners to discuss with their client the potential use of certain pre-planning tools provided by CSPs as part of the overall estate-planning process. CSPs that provide pre-planning tools to users help place the power in the hands of the user to decide what should happen to their digital assets if they die or are incapacitated and who, if anyone, should gain access. However, if the user names a designee of their account who is different from the fiduciary of their estate, it can have potential implications if information in the account is required for the administration of the estate. In the case of social media CSPs, there should be an option (either made by the user through pre-planning tools or, failing that, by someone authorised to act on behalf of the user’s estate) to either delete the account or preserve it without a court proceeding.

The Scorecard

The basic criteria in the Scorecard are the bare minimum that a CSP should include in its ToSA in connection with the death or incapacity of a user. Additional factors are also used to measure the effectiveness of a CSP in addressing the death or incapacity of a user, such as how simple it is for a user to determine what happens to their digital information and, if such designation has not been made or is unavailable, how established the process is for a fiduciary to access such information (which can vary jurisdictionally). Based on these further factors, the Scorecard ranks CSPs as bronze, silver or gold.

Aim

The Scorecard is intended as a simple tool for CSPs, practitioners and their clients. The aim is to provide:

• an easily understood best-practice guide for how CSPs should deal with their users’ death or incapacity in a fashion consistent with the ultimate wishes of the account holder;
• a guide for how practitioners and their clients can assess particular CSPs from the perspective of cohesive estate planning; and
• an invitation for CSPs to address these concerns and obtain expert assistance on the design of pertinent tools and policies to assist users.

The Scorecard evaluation process

We reviewed the ToSAs of CSPs identified in STEP’s report, Digital Assets: A Call to Action,[4] to identify the death and incapacity provisions of a user, if any, as well as data retention policies. We then looked for any pre-planning tools that were available, as well as any guidance for what to do in the event a user was deceased or incapacitated. We also considered any additional merits that a CSP might demonstrate in their ToSAs or platform with respect to death, incapacity and pre-planning tools, including efforts taken to draw these options to the attention of users and the support provided.

Initial results

We have initially evaluated ten CSPs. The evaluation was conducted in July 2023. The Scorecard evaluation will be repeated over time to account for improvements in the ToSAs and pre-planning tools offered by the initial CSPs, and to expand the analysis to include a wider range of CSPs.

Of the CSPs initially evaluated, one of the best performing was Google, which provides an Inactive Account Manager pre-planning tool that permits users to determine what action will be taken should their account become inactive for a specified period, as determined by the user. This could include making certain data available to be downloaded by another person or requiring all or a portion of the account to be deleted. The ToSA also provides access to a fiduciary of a user if the user incorporated such authorisations in their estate-planning documents; however, this may still require a court proceeding.

Similar pre-planning tools have been provided by Apple and Facebook (Meta). Although, in the latter case, the pre-planning tool Legacy Contact only allows the user’s designee to manage the user’s page and does not grant access to private data such as messages.

Areas for improvement

Most CSPs evaluated did not include a pre-planning tool in their platform. Some did provide options for a fiduciary post-death. For example, LinkedIn allows a person appointed by a court to deal with a deceased user’s estate to decide if that user’s account should be memorialised or deactivated entirely. Generally, there were also far fewer provisions for the incapacity of a user incorporated into the ToSAs of CSPs than for their death.

Planning for incapacity

CSPs should seek professional advice in order to standardise policies and terminology and help incorporate death and incapacity-planning options into their platforms. As practitioners aiming to help our clients with their lifetime planning, we must raise these options as part of the planning process, address how they can impact an individual’s estate plan and reassess such features as technology evolves.

Using the Scorecard

We want the Scorecard to be the starting point for practitioners to analyse the ToSA and any available pre-planning options of a CSP in order to advise clients of their use and implications as part of the estate-planning process. The laws in this area are not uniform and neither are the ToSAs of various service providers. If an advisor encounters a client concerned with substantial digital assets managed under a CSP that neither provides a pre-planning solution nor has clear death or incapacity terms in its ToSA, it would be wise to acknowledge the risk, contact the CSP to find out the specific documents they expect a fiduciary to present to gain access to the inactive account, consult jurisdiction-specific laws and prepare accordingly.

Along the same line of analysis, STEP extends an invitation for CSPs to address the review and (if applicable) provide updates to their ToSAs in order to clarify the requirements and policies concerning the management of account holders’ digital assets on their death or an incapacitating event.

The STEP Digital Legacy Scorecard is available at www.step.org/digital-legacy-scorecard