From bank accounts to Facebook, PayPal and more, a good chunk of your personal and financial life now exists online — and that digital footprint can long outlive your actual one. Failing to account for digital assets in your estate plan could put your heirs at risk of getting caught in a web of potential red tape trying to gain access to your online accounts.

On the most basic level, tracking down your digital assets may be difficult without a full accounting, which could ultimately mean your assets may simply be lost in the ether. It could also put your estate at risk for hacking or fraud since many digital financial accounts, like PayPal, are directly tied to your bank account. If your executor doesn’t know to look at Amazon, they may never know a potential security breach could be a mouse click away.

Complicating matters — from an estate-planning perspective — is that most of these accounts are governed by “terms-of-service” agreements that you agreed to abide by when establishing the account. (Whether or not you bothered to read the fine print is a different blog post.) These types of agreements, in addition to state and federal privacy laws, as well as laws that criminalize unauthorized access to computers, all tend to limit access to online accounts.

The good news is that a growing number of states have begun enacting legislation that helps clarify the rules for how executors and others can access and manage the online accounts of someone who has died.

The revised Uniform Fiduciary Access to Digital Assets Act — which has been adopted in 18 states and introduced in at least 12 others — lays out the rules under which an executor can manage a decedent’s digital accounts. Michigan enacted legislation last March granting executor access to digital accounts. The law took effect on June 27, 2016.

There are restrictions written into the law designed to protect the privacy of the decedent. For example, in general, an executor can manage digital property but he or she won’t necessarily be able to read the contents of email messages and the like.

The law adopts a three-tiered approach to determine how access to online accounts is handled after death: The first tier says that if a service provider offers an online mechanism for the user to dictate his or her post-death wishes — one example is Google’s “inactive account manager” — then the account owner’s use of that tool determines what happens to his account.

The second tier states that if the service provider doesn’t offer any kind of online tool dictating what happens to digital assets after the account owner’s death, or if the account owner doesn’t use the tool, then the account owner’s directions in a will or other legal document prevails.

The third tier further clarifies chain of custody by stating that, absent either of the first two situations, then the terms of service agreement — that online form you likely didn’t read when you open your account — determines how your digital assets are dealt with after you die. In general, those agreements curtail access to anyone who isn’t an account owner and so failure to plan ahead means heirs are left hanging in the wind.

However, as long as you use the online tool offered by your service provider — if one is offered — and you also detail your wishes in your will, your digital assets should be accessible, per your wishes.

If you need counsel on incorporating your digital assets into your estate plans, contact Resnick Law online or call (248) 642-5400 to discuss your options.

This is the first of a two-part blog series on custody of digital assets after one dies. Next week, we’ll offer several tips on how to effectively plan ahead to prevent one’s online life from outliving the person.