Digital death is still a problem. A widow’s battle to access her husband’s Apple account

Ch II : Planning For The Digital Afterlife

Transferring property, wealth, assets, and family heirlooms from one generation to another has always been a primary focus of proper estate planning. The electronic and technological innovations of the twentieth century, society’s reliance on the Internet and electronic commerce (“e-commerce”), and the growth of cloud computing have given rise to a new digital world of assets which may be accessible across the world through a variety of mediums. Due to their importance in our everyday life, financial and sentimental value, and continuing growth, digital assets should be considered as a part of any estate plan. Digital assets and online accounts have the potential to continue indefinitely. As with any asset that can exceed the lifespan of the original owner, estate planning for digital assets is a vital part of the preservation of one’s legacy and property disposition. Many individuals unknowingly leave a significant amount of digital assets unaccounted for after death. For example, by the end of 2012, over 30 million Facebook users have died, leaving no directions as to the handling of their accounts. Failure to consider digital assets as part of the estate planning can result in loss of items that contain sentimental and financial value for the deceased relatives. According to a 2011 McAfee study, the average Internet user places a value of $37,438 on their digital assets,3 while a U.S.-based Internet user values their digital assets near $55,000.  The growth and development of the digital world has also changed the manner in which businesses operate, store information, market products, and reach consumers. The U.S. e-commerce industry is valued at nearly $225 billion.  Today, businesses often rely on a wide range of digital assets to ensure a strong web presence through online storefronts, e-commerce services, and cloud-based products, as many consumers expect businesses to have both brick-and-mortar locations while offering online access. These digitized assets are crucial to the company’s success and functionality and, at the same time, represent the growing digitalization of business assets. The average business insists that up to 20% of its digitally stored information is critical to operations. This percentage is likely to increase over time as companies continue to rely upon electronically stored information. Accordingly, proper estate planning and business succession plans are needed to protect and manage digitized business assets. Digital assets, without a doubt, add a new wrinkle to the already complex legal practice of estate planning. Digital estate planning can be especially problematic because digital assets are often difficult to locate without proper guidance from the decedent. Without a well-designed digital estate plan, locating and disseminating digital assets is akin to searching for buried treasure with neither a treasure map nor a shovel. Further, accessibility and transferability issues can arise as these digital assets are often spread across various social networks, email accounts, online service providers, and digital devices. Providing access and location information regarding digital assets via wills creates security concerns as their location and passwords may become public.

The expansive nature of digital assets and the aforementioned issues surrounding this novel area of law triggers the need for more precise and well-developed asset management systems. This Essay defines the scope of digital assets, discusses unique challenges digital assets provide for traditional estate planning, and concludes with a viable strategy for the creation of a well-developed and manageable digital estate plan

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.

What Makes up Your Digital Estate?

CV V: Current Digital Assets Planning Tools

In its current developmental stage, estate planning for digital assets is being done through wills, trusts, and online digital estate planning services. This section explores these three methods of transferring digital assets and discusses their individual shortcomings.
Through the use of traditional wills, individuals may express their intentions and plan for disposition of their assets. However, disposition and transfer of digital assets through wills can be problematic, as briefly mentioned earlier. Given that the average number of specific digital assets per individual is nearly 3,000 files, providing identification and access to all of these assets can be overwhelming. Due to the continuing growth and the changing nature of the digital assets, the will provisions may become quickly outdated. The speed of the digital world seems to outpace these traditional estate planning tools, as passwords and access information can change daily, requiring constant updates to the will. Although the digital property may belong to the decedent, the third-party user agreements and term-and-condition contracts may limit or completely block a beneficiary’s right of access to the decedent’s digital assets. In addition, wills may become a public document upon the decedent’s death; therefore, security and privacy aspects of the transfer of digital assets may be compromised.

Trusts can alleviate some of the above-described concerns. Trusts provide for a more secure transfer of digital assets than wills because trust documents do not become public. Thus, key private information regarding passwords, accounts, and contents remain out of the public eye. Further, the law permits individuals to transfer digital assets into a trust while maintaining control and use of the assets for the remainder of the individual’s life. Sometimes, the trusts are subject to more relaxed formation requirements than wills, allowing for easier creation and modification. As such, trusts can more easily adapt to the changing nature of digital assets. However, very few people actually set up trusts specifically designed for digital estate planning. Although both wills and trusts can transfer digital assets from the decedent to the beneficiaries, they are becoming a tool of the past due to the speed of today’s technology. In response, several online estate planning services have developed in order to facilitate one’s digital asset planning needs. These services are designed to specifically address the digital management, location, and confidentiality of one’s digital assets during an individual’s lifetime.
As such, these digital estate planning services have latched onto the lucrative digital asset management industry—anticipated to be a $1 billion industry in 2013. While these online digital estate planning services offer a degree of efficiency that is unmatched by traditional estate planning techniques—enabling individuals to update, manage, and track their digital assets on demand—serious concerns exist regarding their reliability and sustainability as estate management tools. For example, while digital estate planning services claim to provide exceptional account security, caution is nonetheless warranted because, not unlike a traditional bank vault, these services create a large repository of wealth and property, rendering them prime targets for cybercrime and theft.

Additionally, these digital estate planning services are not regulated and are often not run by attorneys, creating concern as to who is being entrusted with the individual’s passwords, assets, and information.

Finally, there are serious stability concerns as to the continued existence of online digital estate services, as these services are relatively new and turnover in the industry has been significant. However, digital estate planning services such as Eterniam, a Seattle, Washington-based company, are beginning to realize the importance of establishing trust with clients by stressing their commitment to security, privacy, and long-term stability. Estate planning ultimately should not be a short-term solution, but rather should provide lasting peace of mind and planning options to an individual testator.

Online Life After Death – Digital Asset Estate Planning

Online Life After Death – Digital Asset Estate Planning

Most of us have a significant presence in the digital world whether we realize it or not.

If you were to list all your digital accounts and assets, the number would probably surprise you. You may have online accounts with banks, merchants, a brokerage firm, social media platforms, cloud storage companies, gaming sites and email providers. Perhaps you have a blog or own a number of domain names. Some items such as your digital photo collection or your Facebook log may not have a monetary value, but they may have personal meaning for your loved ones. Other items may range in value from coupon credits accrued with your favorite online retailer to a significant balance in a PayPal or even Bitcoin account. You may have thousands of frequent flyer miles, a cash-back reward balance from your credit card company, or an online trading account balance. Your online business presence may include eBay, Etsy or your own web-based company.

Whatever monetary or personal value these types of examples may possess, digital asset estate planning is essential to ensure that your online life after death is handled in an orderly manner according to your wishes.

In addition to online accounts and assets, your personal digital devices and their content should be considered as well.

Your computer or laptop as well as your tablet, e-reader, cellphone or smartphone and all manner of offline storage form part of your digital estate. These storage formats include CDs and DVDs, peripheral storage drives, and memory cards. Tangible paper records are becoming increasingly a thing of the past; for most of us, it is the digital trail we leave that tells the story of our personal, professional and financial lives.

The conductor and composer Leonard Bernstein, an icon of 20th-century classical music, passed away in 1990 and left behind a memoir called Blue Ink in a password-protected computer file. He did not share the password, and so far, no one has been able to access this presumably significant work. Clarifying your wishes regarding your digital legacy is crucial to any well-formulated estate plan. You can start by providing your executor a complete digital inventory together with the necessary means of accessing it.

Digital Assets – A New Frontier

There’s more to consider, however. From a legal perspective, the status of digital assets within estate planning is a new frontier. They may fall within intellectual property, intangible assets or license categories.    While it may seem reasonable to assume that a next-of-kin could simply step in and manage or dispose of digital accounts, this is a risky endeavor. Federal and state laws designed to prevent hacking, identity theft and online fraud can inadvertently prevent loved ones or your executor from legally accessing your digital assets if you die. Many sites and account issuers allow only the primary account holder to enjoy access and can be inflexible on that point.

In Ellsworth vs. Yahoo, a 2005 legal case out of Michigan, the father of a Marine killed in Iraq was forced to seek access through the courts to his son’s Yahoo email account after Yahoo initially refused to provide it. Yahoo eventually complied with an order to produce the email records.

While the need for a court order is extreme, some platforms such as Gmail, Flickr and Twitter request a death certificate and related documents to gain access to accounts and records. Some states such as Oklahoma and Connecticut have introduced statutes designed to provide access to the deceased person’s email and social networking accounts, but comprehensive digital asset protection and disposition after death remains a complicated matter best discussed with your estate attorney.

As stated, the goal will be to identify a complete inventory, directions for access and any information necessary for your digital assets to be valued accurately. You may prefer that some records be destroyed and the accounts closed upon your death while others be willed to specific individuals. You may wish to bequeath your laptop to one person but prefer the contents be destroyed or given to a different heir. The importance of specifying your exact wishes is not to be underestimated. Our digital lives have grown and will continue to grow exponentially, and the peace of mind that estate planning affords will remain elusive until you include your digital assets in this important endeavor.