5 tips for digital estate planning

5 tips for digital estate planning

Most clients have made plans to dispose of their tangible property after they’ve gone. But these days, people have an awful lot of intangible property to deal with as well.

No one is too worried about what’s going to happen to their Twitter account, but there are some significant financial issues that should be considered when it comes to a client’s digital footprint. Many advisors have even gone so far as to set up digital estate plans for their more wired clients.

Clients considering a digital estate plan should focus on their financial life online, which for many of us has grown into a many tentacled beast. Here are some things to keep in mind:

Clients should maintain a list of all the financial sites they access. Some of these are obvious, like bank and brokerage accounts, credit cards, mortgage accounts, loans, utility bills and other online payments. Others are less obvious, such as accounts at places like Amazon, eBay and iTunes. There are also online payment accounts, such as PayPal, that should be noted.

The deposit accounts, which may seem like the most serious concern, are probably the least of the client’s worries. The money in those accounts will be accounted for in the client’s will, and banks and brokerages are used to dealing with customers who pass away.

Other accounts may require more attention. The client may have money in a PayPal account or may have debts to be paid because of eBay purchases. There may be transferable benefits from a frequent-flyer account. These aren’t likely to be significant amounts of money, but they still ought to be accounted for.

The client should name a “digital executor.” This is the person empowered to deal with all the client’s digital assets, and he or she should have access to the list of online accounts, including all passwords and directions. There’s no legal status for this person, but it should be someone whom the client trusts and who has a facility with online maneuvering. (A grandchild might be a good choice.)

See also: How to use old-fashioned selling methods in a new media age

Google, which is generally ahead of the curve, has created a program that can be of help in this area. Google’s Inactive Account Manager allows the client to name an heir of sorts who can gain access to the client’s online data once his or her accounts have been inactive for a certain period of time.

Are there digital heirlooms worth preserving? Aside from the financial considerations, most of us live a good deal of our personal lives online. It’s worth your clients’ time to consider how much of this should be curated after they’re gone. Perhaps the have a personal or company website they’d like to see continued. Perhaps they have a blog they’d rather see shut down than persist into eternity. Maybe they have accumulated photos on Facebook or Instagram that they’d like to see put into the hands of the proper persons before they disappear into the ether. Most clients haven’t thought about this issue and would likely appreciate their advisor’s concern, even if they do absolutely nothing about it.

Find a safe place to put all this information. Security is of prime concern here, since identity theft could be a real problem if all the information fell into the wrong hands. A printed copy of all passwords and other data, kept in a safe or other secure place, could be one option.

There are online solutions as well. Legacy Locker stores all your information in the cloud and requires the client to name two separate people to contact in case of death. (They even have to provide a copy of the death certificate.) That prevents anyone from trying to claim the client has died in order to get to their data. Legacy Locker also lets the client name different beneficiaries for different online accounts. A similar offering, Secure Safe, is from Switzerland — and the Swiss know their way around secure accounts.

A different type of security is provided by Javont Vault, which doesn’t connect to the Internet at all but simply sits on your home PC. That keeps hackers and other breaches to a minimum. The client’s digital executor would be the only other person granted access to the account.

Finally, put a plan in writing. No one is going to go digging around the decedent’s computer looking for postmortem instructions. Make sure their wishes are clear and easily findable. When it comes to one’s online legacy, it can’t all be done online.

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Ch IV.4. Individual Goals Regarding Digital Assets

After providing for the location, accessibility, and ownership of a digital asset, one must then determine the individual’s estate plan wishes and legacy goals. People generally do not have specific digital estate plans in place, often attributable to the fact they are unaware of the importance of developing a specialized digital estate plan.39 Many people mistakenly believe that the only benefit of estate planning is the disbursement of assets upon death according to one’s wishes.

However, security issues, protecting a legacy (including a personal, family, or commercial image), and fulfillment of an overall estate plan are equally important. Uncertainty as to the dissemination and management of assets often arises in the absence of an estate plan, potentially creating significant strife for family members. It is therefore imperative for estate planning attorneys to consider digital assets in addition to physical or traditional assets to ensure both the fulfillment of their client’s wishes and the safe and efficient transfer of digital assets to the next generation.

What is Digital Estate Planning and Why Do I Need it?

Ch 1: Introduction

Countless people are dying without proper digital estate plans in place, leaving billions of dollars of assets unaccounted for in the digital world. This is occurring in part because individuals are often unaware that traditional estate planning tools and techniques, such as wills, are ill-equipped to handle the unique challenges of digital estate planning. As a result, the majority of Americans are vastly unprepared for their digital afterlife, unintentionally foregoing digital estate planning altogether and leaving their assets trapped in a digital purgatory. With the ongoing growth in our reliance on technology, interaction via social media, digitization of individual’s property, and further advancement of new Internet technologies, the amount and value of our digital assets are growing exponentially.

In response to this immediate need for digital estate planning and management of digital assets, some businesses began to offer their users the ability to plan for the disposition of their digital assets upon their death. However, due to the novelty of this area of law, the business solutions currently afforded often leave more questions than answers about what happens to the individual’s digital assets, raise concerns about privacy and security, and augment disputes over their overall effectiveness in the estate plan. These pages examines the importance and increasing prevalence of digital assets, discusses the challenges facing traditional estate planning in the growing world of digital assets, and suggests a workable strategy for the creation of a well-developed and manageable digital estate plan.

Make Sure You Know Who Will Inherit Your Twitter Account

Make Sure You Know Who Will Inherit Your Twitter Account

People draft estate plans that carefully detail how their money and property should pass to their heirs after they become incapacitated or die.

But what about our so-called digital assets, such as an iTunes account containing thousands of songs, or a Twitter account with hundreds of followers? Can people pass those on as well? And how do they ensure that heirs get access to password-protected bank and trading accounts that exist only online?

Questions like these are popping up with more frequency—and for good reason. A popular blog or Web domain, for example, can have great, or potential, value as a business. But if the owner doesn’t take the proper legal steps ahead of time, their heirs may lose the rights to those assets. Photos, videos, email and contents of social-media accounts also may be lost.

Make a List

Justin T. Miller, national wealth strategist in the San Francisco office of BNY Mellon Wealth Management, a division of Bank of New York Mellon Corp. , says that clients often react with surprise when advisers ask about their plans for passing on things like online financial and social-media accounts. Even the technology executives he counsels, Mr. Miller says, have given little thought to how to provide their heirs with access to some of their online assets.

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Katherine Dean, managing director of wealth planning for Wells Fargo Private Bank, San Francisco, says one couple worth around $20 million seemed abashed when she asked them to detail their digital assets in making a comprehensive financial and estate plan. She gave them a one-page checklist seeking information about such assets as photo and social-media accounts, Web-based games, and online-only banking and brokerage accounts.

“They said, ‘Oh my gosh, we’ve got to go online to get this,’ ” says Ms. Dean. “Whenever we hear that, we take the time to have the conversation that this is very important.”

The most important thing, estate attorneys say, is to establish procedures for protecting and granting access to passwords and for transferring assets and account ownership. The rules can vary widely depending on the vendor. While there is nothing in Twitter’s company rules and conditions that says one of its accounts must close if the owner dies, Apple Inc. ‘s iTunes says it doesn’t have a policy that allows anyone to will or inherit an iTunes account.

But even where limits exist, by placing the license and necessary passwords in a trust, access to such accounts can be preserved, says Naomi R. Cahn, a professor at George Washington University Law School.

Ms. Cahn explains: Many digital assets are owned through a license that is limited to the account-holder and nontransferable. The license may cease to exist when the account-holder dies, so it can’t be transferred in a will. But by placing the license in a trust, it is possible that the license will survive the death of its creator.

Wills play an important role, too, Ms. Cahn says, mainly in stating who should receive any digital property that is capable of being inherited. A will can also designate who will have access to digital accounts, although this may not be legally binding.

Estate advisers caution against listing digital assets and passwords in a will because the will can become public. Such information instead should go into a separate letter, says Lesley Moss, an attorney at law firm Oram & Moss in Chevy Chase, Md.

Looking for Legislation

A group of states is interested in drafting a law that would make it easier for consumers to bequeath online property by giving fiduciaries the right to manage and distribute their clients’ digital assets.

Lawyers, judges, legislators and law professors from the Uniform Law Commission, a group appointed by state governments to draft and promote new state laws, met this summer to discuss such a proposal.

Digital Files After Death, What Happens to Your Digital Legacy?

Have You Completed Your Client’s Digital Estate Plan?

I’m sure you are comfortable that your clients’ estate plans are up to date. But have you reviewed your client’s digital estate plan? What is a digital estate plan? It’s a plan for the disposition of all your clients internet accounts once he or she is deceased

Experts have estimated that the average adult with access to the internet has more than 25 internet accounts! In the past, we kept albums full of snapshots, vinyl records and shoeboxes full of correspondence. Now our photos are all on Flickr and IPhoto, our music is downloaded from ITunes and our correspondence is email via Yahoo or Google.

And probably more important than that, a lot of your clients bank and investment accounts may be entirely online.!

And what happens if your client dies? Who has access to these internet accounts? And if they want those accounts taken off the internet how do they do it? You may discover that it is more difficult than you think to access their accounts or erase them from the internet

The family of Ricky Rash, a 15 year old who committed suicide in 2011, discovered how difficult it was to recover information from their deceased son’s internet account. In an effort to understand why he had taken his own life, they requested but were refused access to his Facebook account. Facebook claimed that according to the Stored Communications Act of 1986 – the federal law that governs the protection of a person’s electronic data – even the account of a minor is protected from access by his parents or anyone else.  Other sites and providers interpret the legislation this way, making access all but impossible.

There are only five states that have taken any steps to help recover the internet data of a deceased person—Indiana, Idaho and Oklahoma legislation covers social media and blogging accounts, while Connecticut and Rhode Island legislation covers only email.

What does this mean for your clients? It is critical that they create a digital estate plan.The listing of internet accounts needs to be more comprehensive than I originally recommended. Information must include:

  • the name of the account
  • the contents of the account
  • the URL address
  • username
  • password
  • instructions for the disposition of the account including the person to oversee such disposition.
Digital planning
Digital planning

There is a whole new industry that has been created to service your clients’ digital estate , a new digital estate planning service. Your clients can create an account and then enter their user names, passwords and wishes for each of their digital assets. They can specify an heir for each account; Legacy Locker will provide heirs with information after the account holder’s death is verified.

There are also online memorial services to celebrate your client’s life. These services enable your clients to create their own memorials before they pass away. Facebook and Twitter also offer these services for family members.

The importance of having a digital estate plan will increase as more and more of our assets (and access to assets) are online. Gradually laws will evolve to give family members access to deceased loved ones’ accounts. It is important to prepare your clients for the disposition of their digital assets now so that family members will not be unpleasantly surprised when they attempt to uncover them.

If you want to explore digital estate planning in more detail feel free to wander around.