When it comes to, wills, power of attorney and all that goes into crafting your estate plan, you should include a discussion about digital assets with your attorney.
Our lives today are primarily conducted online – making digital assets part of our daily lives. Yet many of us fail to recognize that the value of digital assets are as important as tangible assets. McAffee, in 2014, conducted research that disclosed digital devices hold an estimated value of $35,000. Topping the list of stored items are personal memories, photos, and videos which was estimated at over $17,000.
As we store an increasing amount of assets and accounts online, their emotional and financial value increases. If you have not included digital asset information along with your estate planning documents, your beneficiaries may not be able to access your accounts, particularly if they do not have passwords and related information. Additionally, problems arise with social media accounts that are covered by TOS (terms of service) agreements which prohibit an accountholder from disclosing information to third parties, or allowing them to access your account, and from transferring the account. Laws governing digital accounts vary state-by-state and all too often beneficiaries are locked out of their loved ones’ social media and other accounts.
What is a Digital Asset?
Digital asset refers to any content a person owns in digital form i.e., anything that you access online, your computer, a mobile device, or that is stored in the cloud. The list of digital assets is extensive and tends to fall into several categories including:
- Passwords: A strong password can secure the information on your computers,
high-tech items and shopping accounts; unfortunately, people are not as careful in selecting passwords making it easy for hackers to access accounts. Google provides many ideas on how to choose hard-to-hack passwords
- Social media accounts: Facebook, Twitter, LinkedIn, Instagram etc., most of which have exclusive access via passwords and relevant security words. They are subject to terms of service contracts established by social media outlets – therein lies the issue when families try to access a deceased loved one’s account.
- Email accounts
- Businesses: Websites, domain name/s, blogs, intellectual property, all data stored digitally etc.
- Financial: Bank accounts, tax documents, investment accounts, credit cards, virtual currencies, savings bonds.
- Personal: Electronically stored photo albums, music, movie collections, video games, websites, mobile devices, frequent flyer miles, medical records, shopping sites such as Amazon, EBay, Wayfair, food sites.
Estate Planning and Digital Assets
When it comes to estate planning we realize that protection of our homes, loved ones, and financial assets are critical. However, it is equally important to protect the legacy of your digital assets as well. Pointers for safeguarding your digital assets include:
- Prepare an inventory of all your digital assets with a description of each along with your user name, password and related security information. Plan to update the inventory each time you make a change.
- Store the inventory either with your estate planning documents or in a place that it can be accessed by your fiduciary (power of attorney, personal representative (executor), etc.).
- Authorize your decision makers (your agent(s) named in your durable power of attorney, in the event of a lifetime illness or disability, and your personal representative (executor) named in your will to act for your estate upon your death) with the appropriate powers to access and deal with digital assets in the event of lifetime disability or death. Supplement those powers with private instructions, if applicable, as to how you more specifically wish your digital assets to be handled. For instance you may have certain personal accounts that you don’t ever want opened; be specific.
- Be aware. Familiarize yourself with terms of service agreements associated with your social media accounts. Some platforms have incorporated ways of handling a deceased’s account, others have not addressed this issue at all.
The importance of including digital assets in your estate plan cannot be overstated as Internet usage becomes more pervasive and as online accounts become even more valuable. Be sure to discuss this topic with an estate planning attorney… soon.