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Have you thought about what happens to all the emails, pictures, contacts, messages, phone numbers, email addresses, on-line accounts and other information on your personal and work cellphones and computers after you die? Do you want anyone to have access to these “digital assets” after you die? If so who should have access to what? You need to consider these digital assets as well as your other assets when doing your estate and succession planning.
What are Digital Assets? Digital assets include any online account that you own or any file that you store on your computer or in the cloud. Digital assets can include your on-line banking account, your e-mail accounts, your picture and video storage sites, your social networking sites, your domain names, your games and leisure sites, your business, professional, marketing and networking sites, your frequent flier mile and other award program accounts, and all your storage and backups. Digital assets also include all the electronic information and data on your personal and business cellphones, laptops, I-pads, computers, hardware and software.
Passwords. Many of your digital assets are protected by usernames, passwords, and security questions. If these digital assets are to be easily accessible to your chosen beneficiaries, you need to make sure such access information is recorded and transferred to such beneficiaries.
Need to Plan. It is important for many reasons to carefully plan for the eventual transfer of your digital assets. These reasons include: (1) the uncertainty of existing digital asset privacy and other laws, (2) prevention of on-line identity theft, (3) making sure the right parties receive your digital assets, and (4) making sure others do not gain access to your digital assets.
No Body of Law. Digital assets are a new phenomena. There is no well-developed body of law that describes the rights and obligations of executors, agents, guardians, and beneficiaries with regard to digital assets. Very few jurisdictions have dealt with this issue. Facebook, Twitter, Linked-In and other on-line services have their own policies for how to deal with a user’s death or incapacity, but not all such services have developed policies, and the policies that are in place may not be consistent with your personal wishes.
Prevent On-Line Theft. Proper planning for your digital assets can prevent on-line identity thefts. When you die or are otherwise unable to monitor the activity on your on-line accounts, thieves have an opportunity to hack your accounts, open new credit cards in your name, obtain identification cards and make purchases and take other actions in your name.
Executor Needs Access. Giving your trusted executor access to on-line to digital and other assets would greatly improve the efficiency of the administration of your estate. Making sure the executor knows which bills you paid on-line or by automatic checking account deduction would help ensure these bills do not go unpaid and would make it easier for the executor to pay such bills.
Transfer of Digital Assets. Some digital assets may not have any monetary value, but many may have personal or emotional value. You may have established on-line photo albums and accounts that preserve photos and letters. If your family and friends do not know you have these assets or how to access these assets, these photos and letters may be lost forever. And if no effort is may to protect these digital assets, the personal and emotional value attributable to these assets may be diminished or destroyed by addition or deletion of material by spammers and hackers.
Transfer to the Right People. You may not want all your family and friends to have access to all your digital assets. Emails and messages are often quick off-the-cuff posts or responses. Some of your emails or messages may contain rude, crude or hurtful jokes, stories or rants that you did not really mean or that were meant only for the recipient. If you are not careful about who gains access to your digital assets, the wrong people may gain access.
How to Plan for Digital Assets. The first step in planning for digital assets is to do an inventory of these assets, including usernames, passwords, and answers to “secret” questions. The next step is to determine for each digital asset whether such asset is subject to deceased/incapacitated user provisions and whether there are ways to change or opt out of such default provisions.
Using Wills or Trusts to transfer Digital Assets. Wills can be used to transfer digital assets, but Wills are probably not the right place to handle disposition of digital assets or to list digital asset access information because such information changes from time to time and because Wills are eventually made public. In addition, a Will transfers ownership and control of the digital assets to named-beneficiaries immediately when the Will is probated (rather than maintaining ownership and control in the hands of a trustee). A Trust is probably a more appropriate location to include the transfer of digital asset provisions because a Trust can be changed more easily and because it does not become part of the public record. The use of a Trust also gives you the ability to have your digital assets maintained and controlled after your death for so long as appropriate by a trustee you name.
Storing Access Information. While Wills and Trusts can be used to transfer digital assets, they are not the best place to store the access information. It is advisable to prepare a separate document with all of the access information related to your digital assets. This separate document would be a list of all of your digital assets including your on-line accounts, passwords, security questions, and answers. This separate document could also designate who gets access to which asset, and which assets get deleted. This separate document can be in writing, but it also could be stored electronically on a computer data file, USB flash drive, or in a cloud.
During your lifetime you are creating a wealth of electronic information about yourself, your family and your friends. Some of this you may want to pass on. Some of this you for sure do not. If you would like to speak with me or one of our estate planning attorneys about how to handle your digital assets please give us a call at 937-223-1130 or Jsenney@pselaw.com.
AND ONE MORE THING. PS&E is sponsoring a FREE seminar at Dayton Country Club on Wednesday May 22 from 7am to 9 am on “Essential Legal Documents, Planning Considerations and Legal Updates for Every Business.” It is not too late to register. But you need to hurry since space is limited. You can register by clicking on the following link Register Now! or by contacting Jan Burden at 937-223-1130 or Jburden@pselaw.com.