Digital Assets: Your Online Life After Death

Digital Assets: Your Online Life After Death

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With rapid advancements in technology there is the increased likelihood that you have created a digital presence and online identity. As time goes by many of our ‘possessions’ are becoming digitised, creating a new category of personal property that being the ‘digital asset’.

What is a digital asset?

A digital asset is anything you may own, or have rights to, that exist either online or on hard storage devices. Some examples of your online assets include email, social networking, iTunes, cloud storage and financial accounts. Hard storage devices include assets such as computers, laptops, USB, smart phones and any other external storage drives which are locked by way of encryption.

Why is important to consider our digital assets in estate planning?

Whilst we are creating personal digital assets at an unprecedented rate, the laws governing them have not developed simultaneously. It remains unclear where the notion of digital assets fits among other traditional concepts of property. Therefore in order to protect these assets, it is important to make separate provision for dealing with them in your estate plan.

It is important to deal with these assets for various reasons. This includes the prevention of identity theft, to have your history and memories recorded and your wishes expressed, to continue the management of any online business, to assist your executors in the estate administration process and also for preventing any litigation which may be required in being able to gain access to such assets.

Furthermore, whilst the value of a digital asset may vary, the particular type of value of the asset may be significant for a loved one or beneficiary. For example, the asset may have sentimental value such as digital photos, or it may have significant monetary value such as a professional blog or writing.

How do I include digital assets in my Estate Plan?

The first step is to create a digital inventory of all your assets. This inventory will need to include the names of all your assets and where they are stored, as well as all the usernames, passwords and secret questions which will allow a nominated person to be able easily access them upon your incapacitation or death.

It is then important to think about what you’d like to happen to these assets upon your incapacitation or death. For example, would you like to have your Facebook account closed down or memorialised? Is there someone in particular you would like to have access to your iTunes account?

Once you have made the inventory and considered what you would like done with your assets, it is then important to make your wishes legally binding by formalising them in a Will and Enduring Power of Attorney.

Incapacity

The most important part of planning for incapacity is to execute an Enduring Power of Attorney. This document will allow you to appoint someone that you trust to deal with your digital assets effectively and properly in the event you are incapacitated and can no longer control the accounts yourself.

Death

Your Will is the document which addresses how your assets will be dealt with upon your death. Therefore it is important that your Will make provision for and include a clause that will give power to your executor to handle and manage your digital assets in accordance with your wishes and the terms of your Will.

Your executor, being the person you have nominated to administer your estate, should also have access to your inventory of your digital assets. This allows them to know what assets exist and where to locate them. The inventory should remain separate from the Will and should be updated as required.

The concept of ‘digital assets’ is no longer an idea of the future but rather it is very real and present right here and now. Therefore, it is prudent to seek advice from a solicitor in relation to your digital assets and your estate planning needs. A solicitor is best equipped to provide you with appropriate advice on how to best to structure your affairs in order to ensure your digital assets are dealt with effectively in your estate plan. For advice on Wills and Estate matters contact Jason Coluccio or the team at Welden & Coluccio Lawyers.

Robin Williams Restricted Exploitation of His Image for 25 Years After Death

Robin Williams Restricted Exploitation of His Image for 25 Years After Death

On Monday, the family of Robin Williams gathers in a San Francisco courtroom in a quarrel over how to divide personal property such as jewelry and memorabilia. Unfortunately, the dispute overshadows one of the more innovative aspects of Robin Williams’ estate planning, which just might become a model for other celebrities preparing for their demise. After all, one thing his wife Susan and children Zachary,Zelda and Cody won’t be discussing in court is intangible property like the late actor’s right of publicity.

According to a review of the Robin Williams Trust — filed as an exhibit last Wednesday — Williams bequeathed rights to his name, signature, photograph and likeness to the Windfall Foundation, a charitable organization set up by Williams’ legal reps at the law firm of Manatt, Phelps.

There are two important facets of this provision.

First, the Trust restricts exploitation of Robin Williams’ right of publicity for 25 years after his death. That means, there won’t be any authorized advertisements featuring Williams until at least August 11, 2039. The provision also interferes with someone immediately doing, say, a hologram of a Robin Williams standup routine or digitally inserting him into a new film.

“It’s interesting that Williams restricted use for 25 years,” says Laura Zwicker, an attorney at Greenberg Glusker who counsels high net worth individuals on estate and tax planning. “I haven’t seen that before. I’ve seen restrictions on the types of uses — no Coke commercials for example — but not like this. It could be a privacy issue.”

Or maybe, Williams’ reps were aware of novel technologies that have the power of essentially resurrecting dead celebrities — and hoped to avoid anything that could tarnish his legacy.

The Trust’s publicity rights provision is cutting edge in another way.

If the Windfall Foundation is deemed ineligible for a charitable deduction by the Internal Revenue Code, the Trust mandates that Robin Williams’ publicity rights be distributed to one or more charitable organizations with a similar purpose (Doctors Without Borders, AIDS, Make-a-Wish, etc.) which qualify for such charitable deductions.

According to insiders, this appears to be a direct reaction to a dispute happening at the moment between the estate of Michael Jackson and the IRS over how to value the late singer’s publicity rights for estate tax purposes. The federal government claims the King of Pop’s estate owes more than $500 million in taxes from his publicity rights and must also pay almost $200 million more in penalties. The dispute is currently being adjudicated in U.S. Tax Court.

Assigning publicity rights to a tax-advantaged charitable organization could limit his family’s tax liability. By doing what he did, Williams not only asserted a measure of control over posthumous exploitation, but he recognized that the value of a celebrity’s afterlife has gone up in recent years and made a step to mitigate the IRS’ interest in this.

Digital Estate Planning

Digital Estate Planning

Mostly everyone has an estate. An estate is nothing more than the personal property you have left over after you pass away. Estate planning is nothing more than planning for what you would like to have happen to your property after you pass away.
If you think about it, most people have some kind of an “estate” that they need to plan for. In fact, with the amount of digital assets that most of us have on our computers or online, our “estate” can become quite significant.
For example, how much have you spent on iTunes since you began your account? Are all of those songs and movies worth something? Absolutely.
What about all of the pictures that you have taken and posted on Facebook or Pinterest? At the very least, there is significant sentimental value in all of those photos and thoughts recorded.
Websites like Facebook and Pinterest are the most common version of journalism that exist. Wouldn’t you like to pass all of those memories on to your loved ones?
If you think about it that way, you have much more of an “estate” than you might have thought. However, until recently, there has been little in the way of legislation that could help you preserve all of your online assets.
Current Nevada Laws
In Nevada, we have a law signed into effect on June 1, 2013 that gives the personal representative of a deceased person’s estate the power to direct the termination of any online account or similar electronic or digital asset of the decedent. This law allows individuals to cancel accounts that may be incurring charges; however, this law does not
address powers to access these accounts or copy the contents, and it only applies to personal representatives.
There are currently no laws in Nevada designed to protect an individual’s assets from being lost in cyberspace. When someone passes away, unless the correct login information has been saved somewhere accessible or passed on to those they want to have access to their accounts, the digital assets in those accounts are lost forever.
Contrast with Delaware’s Laws Delaware has traditionally been on the forefront of establishing new estate planning laws. In order to keep up with the precedent, Delaware has just passed a new set of laws that has pushed them ahead in the world of digital estate planning. This new law allows loved ones to access online accounts after that person’s passing.
The act called “The Fiduciary Access to Digital Assets and Digital Accounts Act” (HB 345) was signed into effect on August 12, 2014. This new law broadens digital access for legal heirs and closes one digital estate planning gap. The Delaware House Democrats have called this new bill the “first comprehensive state statute dealing with the disposition of a decedent’s digital assets in the nation.”
The major impact of the act is to carve out a procedure by which executors of a dead person’s estate can request access to any of the deceased’s digital accounts or assets. After sending a request that complies with the law’s requirements, a custodian for a digital service or account has 60 days to comply with that request.
So far, Delaware’s Fiduciary Access to Digital Assets Act is the most comprehensive law of its type that has been enacted. Some states have attempted to protect the deceased’s loved ones with “Facebook after death” laws; however, none have come close to being as comprehensive as Delaware’s laws.
Nevada is traditionally not far behind Delaware in enacting estate planning statues. So, it would behoove us to consider the terms in this new Delaware law and how it might also impact Nevadans as we contemplate the adoption of a similar law.
Delaware’s Digital Estate Planning Limitations
When Delaware’s digital estate planning law goes into effect on January 1, 2015 it will not be a perfect solution that will solve all digital estate planning issues.
Some skeptics feel that this new law may expose private third-party communications to heirs. The Delaware law in its current form does not take into account highly confidential communications to decedents from third parties who are still alive. For example, doctor records, psychiatrist communications and clergy confessions might all be exposed under this new law.
How You Can Plan Today Technology is ever evolving and the state laws must keep up with the changes in order to provide the proper amount of protection.
Technology is changing the way that we interact with people and conduct business. In the course of our daily lives valuable digital records are being kept in our smartphones, computers and website accounts. We will need to be proactive so that our loved ones and fiduciaries can access this data after our passing.
Given the state of today’s Nevada laws it is advisable that you make a list of all of your valuable or significant data, online accounts and digital property. This list should be kept with your Living Trust or Will. Make sure you indicate how your executors or trustees can find each item listed, how to access it and why it is something that would be valuable to them. You can also regularly back up all of your digital assets to a hard drive, flash drive or disc. These storage mediums can also be kept with your estate planning documents in a secure location.
Next, you should contact your estate planning attorney to include plans for your digital property in your estate plan. Be sure to include instructions on how you would like your digital property divided. This process may include preparing a Living Trust, a Will or a durable power of attorney (depending on your particular situation).
Planning for your digital property is one more aspect of estate planning that must be considered. In order to keep estate administration costs down, provide for a smooth transition and ensure that all of your valuable digital property is not overlooked, the proper steps must be taken.