You’re a responsible individual. You’ve done estate planning to provide for the distribution of your assets to protect those you love. If you’re like most of us, when you hear the word “asset” you think of things like your home, the money you have in the bank, or your investments. You know, all those tangible possessions that have traditionally been considered to be what makes up our property, our “wealth.” The same has been true of estate planning – meticulous indexing of and making provisions for material and monetary goods. But, when you’re thinking about who gets Aunt Martha’s prized duck lamp, don’t forget what you may own in the digital world.
The idea of owning digital assets is a relatively new concept and not anything we were considering in estate planning even twenty years ago. However, with the current domination of the Web in our private, professional, and financial interactions, personal ownership now applies to a whole host of individually-owned digital property. Don’t think that applies to you? Consider email, social media, cloud-based storage – anything with online access and a password potentially has personal value, and the typical individual has dozens of accounts. In fact, most of us use computers and email with cloud-based application and storage services gaining users every day.
An individual may even have a social media or blog that generates income or has the potential to do so. What happens to those thousands of followers or that revenue when they’re gone?
What does happen to digital assets in the event of your or a loved one’s death? All those privacy measures that protected personal data while you were alive now stands in the way of third-party access, even if that person is your trusted fiduciary. In fact, the law comes down heavily on companies that disclose personal information to a third party.
Here are a few facts about digital assets and the law:
- Fiduciaries are only referred to in one federal law related to computer fraud and abuse.
- Account holders must consent to disclosure of certain electronic communications under federal privacy laws.
- The true value of digital assets is often not appreciated until after the owner is deceased.
- States have outdated probate codes. That, coupled with passwords and encryption, computer fraud and data protection laws and privacy policies/terms of service agreements, makes for an almost impenetrable barrier to digital property access after the owner dies.
If you are thinking about your own or a loved one’s estate plan, inventorying and including provisions for properly handling digital assets should be an integral part of your planning. As you take account of digital assets, it helps to think of the following:
- Do you access financial accounts electronically? Examples are logins for banks and brokerage accounts, online bill pay, insurance, and accounting or tax preparation software.
- What electronic assets do you own that have value? Consider domain names, digital currency, online game account sales, and money transfer platforms such as PayPal.
- Do you store valuable information or files in a digital format? Examples in this category are family photos, work or organizational files, personal documents, medical information, and websites, blogs, or social media accounts (which may also be revenue generating).
- Do you communicate through emails and/or social networking accounts? Email accounts and social networking accounts contain a wealth of personal and family information and history.
Once you’ve determined your digital assets, it’s important to make provisions for your fiduciary to have the needed access to carry out your wishes. In fact, under federal law or by the seldom-read Terms of Service Agreements (TOSAs) attached to online accounts, fiduciary access may be modified or eliminated when the user has failed to sufficiently plan. One simple way to do this is by using a secure and encrypted password management program like LastPass to store logins for all accounts and then giving a trusted person access to that account. This way, they’ll always have your latest login information as well as a comprehensive list of your accounts.