What Is Digital Estate Planning? Digital estate planning is estate planning for digital or online assets, such as e-mail, text messages, websites, financial or personal information, and social networking accounts. Digital estate planning is a new field, so there are no federal statutes and only a handful state laws […]
Many of us will accumulate vast libraries of digital books and music over the course of our lifetimes. But when we die, our collections of words and music may expire with us.
Someone who owned 10,000 hardcover books and the same number of vinyl records could bequeath them to descendants, but legal experts say passing on iTunes and Kindle libraries would be much more complicated.
And one’s heirs stand to lose huge sums of money. “I find it hard to imagine a situation where a family would be OK with losing a collection of 10,000 books and songs,” says Evan Carroll, co-author of “Your Digital Afterlife.” “Legally dividing one account among several heirs would also be extremely difficult.”
Part of the problem is that with digital content, one doesn’t have the same rights as with print books and CDs. Customers own a license to use the digital files — but they don’t actually own them.
Apple AAPL, +0.79% and Amazon.com AMZN, +0.98% grant “nontransferable” rights to use content, so if you buy the complete works of the Beatles on iTunes, you cannot give the “White Album” to your son and “Abbey Road” to your daughter.
“That account is an asset and something of value,” says Deirdre R. Wheatley-Liss, an estate-planning attorney at Fein, Such, Kahn & Shepard in Parsippany, N.J.
But can it be passed on to one’s heirs?
Most digital content exists in a legal black hole. “The law is light years away from catching up with the types of assets we have in the 21st Century,” says Wheatley-Liss. In recent years, Connecticut, Rhode Island, Indiana, Oklahoma and Idaho passed laws to allow executors and relatives access to email and social networking accounts of those who’ve died, but the regulations don’t cover digital files purchased.
Apple and Amazon did not respond to requests for comment.
There are still few legal and practical ways to inherit e-books and digital music, experts say. And at least one lawyer has a plan to capitalize on what may become be a burgeoning market. David Goldman, a lawyer in Jacksonville, says he will next month launch software, DapTrust, to help estate planners create a legal trust for their clients’ online accounts that hold music, e-books and movies. “With traditional estate planning and wills, there’s no way to give the right to someone to access this kind of information after you’re gone,” he says.
Here’s how it works: Goldman will sell his software for $150 directly to estate planners to store and manage digital accounts and passwords. And, while there are other online safe-deposit boxes like AssetLock and ExecutorSource that already do that, Goldman says his software contains instructions to create a legal trust for accounts. “Having access to digital content and having the legal right to use it are two totally different things,” he says.
The simpler alternative is to just use your loved one’s devices and accounts after they’re gone — as long as you have the right passwords.
Chester Jankowski, a New York-based technology consultant, says he’d look for a way to get around the licensing code written into his 15,000 digital files. “Anyone who was tech-savvy could probably find a way to transfer those files onto their computer — without ending up in Guantanamo,” he says. But experts say there should be an easier solution, and a way such content can be transferred to another’s account or divided between several people.“We need to reform and update intellectual-property law,” says Dazza Greenwood, lecturer and researcher at Massachusetts Institute of Technology’s Media Lab.
Technology pros say the need for such reform is only going to become more pressing. “A significant portion of our assets is now digital,” Carroll says. U.S. consumers spend nearly $30 on e-books and MP3 files every month, or $360 a year, according to e-commerce company Bango. Apple alone has sold 300 million iPods and 84 million iPads since their launches. Amazon doesn’t release sales figures for the Kindle Fire, but analysts estimate it has nearly a quarter of the U.S. tablet market.
Due to recent technological advancements, one’s digital presence has become an important part of every day life. As a result, it is increasingly important to consider how this may impact traditional estate planning. With increasing frequency, individuals are creating complex lives online, which may include a social media presence, electronic banking, reward point balances, online investments, and many other possibilities.
Many people also now store digital assets that can have strong sentimental value, such as family photos or favourite playlists, online. As the types of assets that we store in digital formats continues to expand, important issues, such as how they will be accessed post-death, should be a consideration during estate planning involving our more traditional assets.
It is important to note that the issue of digital assets and estate planning does not concern only the younger generation. The conveniences and increased accessibility of technology have also attracted a large portion of the older population, including many who may already have estate plans in place. As it is always recommended that an estate plan be periodically revisited, especially when there are any significant life changes, the organization and implementation of digital assets should also be considered at these junctures.
Unfortunately, it is all too common to see these types of assets overlooked in a will. First and foremost, it is essential for advisers to be asking the right questions about the nature of a testator’s assets. This may require probing beyond the consideration of traditional assets, such as real property and bank accounts. In many cases, a digital asset may have no monetary value and it may be overlooked for this exact reason. Asking pointed questions regarding digital assets and having the testator prepare a list of information he or she stores online can help determine how these assets should be distributed or managed.
Another important aspect to address is how digital assets will be accessed after death. Digital assets and accounts are typically accessed by way of a username and password. If the executors of an estate are not provided with this information, they may encounter difficulties when trying to determine what these assets encompass and in obtaining access in order to effectively administer them.
The rules surrounding executor access to online accounts following the death of an account holder vary significantly. It is prudent to provide your executors with a list of online accounts and the corresponding access information rather than risk future inaccessibility as a result of different access requirements. Many sites are based outside of Canada, which means that the executor may encounter conflict of laws issues in the event that the executor’s authority is not recognized in the relevant jurisdiction. This can result in unexpected costs and delays in the administration of the estate.
In order to address this, it is highly recommended that testators give careful consideration to providing a detailed list of any virtual accounts and to an appropriate method of storage for the username and passwords, to be used after death. There are multiple ways in which this can be accomplished. For instance, it could be in as simple a format as a list that is given to your executors prior to death or attached as a memorandum to the will itself. It is not recommended that the password list form part of the will itself, as it may be made public if the will is probated. However, it is important to bear in mind that this list should be updated periodically. Passwords are sometimes changed (voluntarily or mandatorily) and accounts may be added or deleted. A static list that is created at one point in time will not necessarily be an accurate reflection of the virtual accounts and access information at the time of death.
Another storage method is to make use of online password storage services. There are multiple sites that have been established to provide this service. They are designed to store usernames and passwords to all virtual accounts in a safe and secure format which can be accessed by one master password. In this way, the list can be updated easily and an executor only needs to be provided with one password in order to access all of the necessary information.
As for social media, special concerns may arise with respect to personal preferences surrounding how these accounts should be dealt with post-death. Some may prefer to have these accounts shut down altogether, whereas others opt to have them memorialized in such a way that friends and family have a place to share memories of the deceased. Given these different approaches, it can be useful to provide some direction to your executors regarding your specific preference on the issue. Leaving a social media account open without any planning may seem harmless, but can inadvertently cause unnecessary pain to loved ones. For instance, if the account is not memorialized or deleted, photos of the loved one may appear in Facebook’s “Year in Review” and friends and family will continue to receive annual reminders and prompts to wish the deceased a happy birthday.
In 2016 and beyond, it is impossible to ignore the fact that technology has changed the way we live. Our lives are increasingly intertwined with the virtual world and, accordingly, plans should be made so that assets and information stored digitally are appropriately dealt with at death.
By Elizabeth Wynn
Remember the Digital Age in Your Estate Planning!
When an individual dies, the named executor or other fiduciary is allowed access to all physical assets including letters, documents, and legal papers. However, in today’s digital age, these fiduciaries also need authority over administering digital assets and accounts upon the incapacitation or death of the account holder.
Almost everyone has at least some assets that are not physical, but instead are stored as data and accessed through the Internet. These digital assets include emails, documents, online photo streams, social media accounts, insurance records, bank accounts, as well as logins and passwords used to access online accounts.
Imagine this. You could leave photos and videos behind that no one can access. You could have online accounts with money or credits left in them, or you could lock away important financial information with passwords that no one can access. Or you could have social media accounts that continue to produce painful reminders of your absence to your loved ones. This is a problem all of us who access the Internet will encounter in time.
There are a few things you can do to deal with these issues now before you die, leaving your loved ones with a tangle of inaccessible digital assets. First and foremost, make an inventory of all your digital assets. This will probably seem like a daunting task, but it doesn’t have to be.
Start with the most important assets and work from there. For example, you may want to begin with your primary email account. This is likely the most important step because usually this is where other online accounts interface, providing login and password resets, credit card balances, and accounts payable, just to name a few.
Second, decide what you want to happen to your intellectual property once you’re deceased. Do you actually want someone else to access your emails, photos, videos or other materials? There may be some things you want your loved ones to see and some things you don’t. Decide now and make sure your wishes are known.
Lastly, give someone authority over your digital assets in the event of your incapacitation or death. This can be done through a Power of Attorney, Last Will and Testament, or Trust planning, just to name a few.
You must also consider and plan for your online accounts. Google for instance, through their “Inactive Account Manager,” allows users to share parts of their account data or notify someone if they’ve been inactive for a certain period of time.
On the other hand, upon request and presentation of a death certificate, Yahoo will only allow you to delete an account. There are no options to access a decedent’s emails or photos. According to the Yahoo Terms of Service, “You agree that your Yahoo account is non-transferable and any rights to your Yahoo ID or contents within your account terminate upon your death.”
Facebook, once provided with a death certificate, will allow you to delete an account or memorialize it, which basically freezes it in time and removes it from certain features, like “People You May Know.”
Most of the major social media accounts have policies in place to deal with a decedent’s account in similar ways as these, and still others are silent. Check with the Terms of Service on all your online accounts to see what steps you need to take to ensure you include all your accounts in your digital asset estate planning.
Practically speaking, the best way to make sure these important digital assets go to the right people is to share the necessary information with those people. It’s never a good idea to include login information in your will because a will becomes public record at your death. This would allow any stranger to have access to these accounts.
Alternatively, in your estate planning documents you can direct your digital fiduciary to a safe place, like a safe deposit box, where he can locate this information. Another option is a password manager. There are online companies that allow you to choose a digital heir to inherit access to your passwords, which will be stored with that company.
Regardless of which method of retrieval you use, make sure you specifically include digital assets in your estate planning wishes.
Elizabeth Wynn is a member of the National Academy of Elder Law Attorneys and practices law in Ridgeland. She and her family live in Madison.
When writing a will or planning your estate you should also think about your digital assets and what will happen to them once you are gone.
A lot of people are not taking their digital estate into account when putting their will together, despite the fact that it could be worth thousands of pounds. Things like music files, films, ebooks, PayPal balances, online bank accounts and registered domain names all add up, and many people are sitting on a fortune in digital assets. Aside from the monetary value of digital property, there is also sentimental value to think about. Photos that are stored online could become inaccessible to your loved ones unless you specify your wish to pass your accounts on.
It’s Good to Talk
There may be assets that your family aren’t even aware of too. Talking about your will with your family is often considered a taboo, but it is vital to include your loved ones in the planning process and make them aware of any property they may not know about – particularly digital property. Compiling a list of any online accounts you own, as well as important or valuable files and their locations is the best way of ensuring they are passed on. Keeping an inventory will also help you to organise your digital assets to make the process easier. There are various password management services online which store usernames and passwords to any online accounts you have. This service is then accessed by a single master password which can be given to an executor so they can access all the information they need in one place.
Planning in Advance
Complications can arise when transferring digital assets. Handing over digital media such as music, films and ebooks may depend on the terms of service. Some providers may stipulate that despite paying for the product, you don’t actually own it, therefore cannot transfer ownership to another person. Some services actually require a death certificate to be presented in order to close or transfer ownership of an account or device. If you are planning to store your digital media with an online storage provider such as Dropbox, check the terms of service. Storing your media in one place, only for your relatives to find out they are unable to access your account after you have died could be devastating.
One of the best ways to ensure you secure your digital legacy is to seek help from professionals. If you would like advice or assistance on writing a will, please get in touch.