Journal of Financial Planning: September 2014 Jamie P. Hopkins, J.D., RICP ® , is an associate professor of taxation at The American College and the associate director of the New York Life Center for Retirement Income. Email author HERE . Ilya Lipin, J.D., LL.M., is an attorney in Philadelphia. […]
selling goods or services, or keeping in touch with family members and sharing memories, the majority of this happens on the internet. When it comes to succession planning, these virtual accounts and online property are just as important as the physical items we can see and touch, such as houses and jewellery.
Succession planning is where people lay the foundations for what is to be done with their belongings when they pass away. Almost everything that a person could own can be accounted for: the family home, antiques, photographs, family keepsakes and even pets. Items that an individual accumulates over the course of a lifetime are normally organised and included in a will, and distributed among their surviving family members and friends.
However, thanks to advances in technology, many of the things that people use in daily life are online. Bank account details, social media passwords, email information, and even music downloaded via the internet can be owned by a person. Strange as it may seem, all of these are incredibly important but are often overlooked when people start to plan for what is to happen with their property when they die.
For many years, digital assets were largely ignored when it came to planning for what is to be done with a deceased’s property.
There are different reasons for this, such as people simply did not attach much value to online information or they forgot that this information was still someone’s property that had to be organised.
Increasingly, people are being encouraged to make plans for what is to be done with their digital assets on their death. This is for two main reasons: this data is still deemed in law to be property which needs to be dealt with; and much of this data can contain personal and, at times, sensitive information which should be handled carefully.
The best way of thinking about social media profiles and electronic media or music libraries is to consider them as a kind of intellectual property. No one can physically touch a profile that has been created on Facebook or Twitter, as it can only be accessed via the internet.
The same too can be said about electronic media files. They do not exist in the sense that you cannot reach out and touch them and move them from one place to another, other than through use of a computer. When someone creates these profiles or collections they tend to be specific to an individual.
Electronic media files and music downloads fall squarely into the area of intellectual property (IP). Usually, when music files are purchased online via iTunes or a similar program, it is not the song itself that is being sold, but rather a right to download, store and use the song. This will vary according to the organisation in question, but licenses are very much a part of IP law. Therefore, as with most aspects of IP law, licenses are specific to an individual. Problems arise when the person who they relate or belong to passes away. This is why a plan should be put in place which details what should happen to those licenses.
Online bank accounts are slightly different. Although they cannot be physically touched and can only be accessed online from the use of passwords and usernames, they are normally only made available to customers of a bank as part of a contract. This is why they fall under contract law not IP law. In practice, it makes little difference how bank accounts are viewed, as they are particular to an individual. A plan should be made detailing what is to happen to these accounts when the person who uses them passes away.
Having a digital profile of any kind (for example, Twitter, Facebook, Instagram or Flickr) is a bit like buying a product or service. In signing up to use the resource, individuals are agreeing to terms and conditions. The difficulty is that many companies have very strict terms and conditions when it comes to passing on usernames and passwords. Most organisations will not provide anyone but the owner of the account with passwords and usernames, even those who have genuine concerns regarding a deceased’s online account. This is why it is incredibly important that this information is documented and kept in a safe place.
Listed below are the practices of some of the most commonly used organisations when dealing with an account belonging to someone who has passed away.
Organisations like Facebook normally advise that the passing on to third parties of usernames and passwords is a violation of their terms of use, given that they themselves would not pass on this information. However, there are other options available. Facebook offers a service where an individual’s online profile can be preserved or ‘memorialised’ upon receipt of a ‘valid request form’, which is available online. Facebook requires proof of death, for example, a death certificate or a copy of an obituary in a newspaper.
Unlike Facebook, which is a free service, music which is purchased and stored on Apple’s iTunes is a service which is paid for. Generally speaking, this kind of data or digital asset can be passed on to a successor or heir, but different organisations have different rules. Apple will technically only licence the right to use music to an individual that has purchased a song via iTunes. However, Apple operates a service where this licence can be transferred upon receipt of proof of death and entitlement to the deceased’s assets.
Instagram makes very clear in its terms and conditions, specifically its privacy statement, how it deals with accounts of people who have passed away. It asks that relatives of the deceased get in contact with the company via email to request that the account is deactivated. Similar to Facebook, all of the communication will likely take place via email. Instagram will need proof of death, for example, a death certificate, before it deactivates the account.
Twitter has a very similar practice to that of Apple when it comes to dealing with users’ accounts. As a matter of company policy, Twitter will not share details that will allow access to a user’s account – regardless of whether it is a close family member or not. However, it will accept requests to terminate the account. It will require proof of death along with other information specific to the account. This is listed on its website and includes:
Google operates a policy where relatives or friends of a deceased account holder can contact them with details of the deceased and evidence of their death, and request to access an account to delete or alter it. However, Google does not guarantee that every request will be honoured but does stress that every request will be carefully reviewed.
Google has taken a very pragmatic approach to dealing with user accounts: it encourages users to engage in forward planning. In April 2013 it launched an ‘inactive account manager’ which allows users to tell Google what is to be done with their account after it has been left inactive for a period of time.
Yahoo does not accept requests to access users’ accounts. Yahoo operates a policy where those wanting to terminate a deceased person’s account must provide the deceased’s unique Yahoo ID. They must also have evidence that they have been authorised to act as the representative of the deceased. This should be accompanied by a death certificate.
PayPal, like Google, has also taken a fairly pragmatic approach to dealing with accounts of people who have passed away. If someone wants to cancel a PayPal account of the deceased, it is the executor or administrator of a person’s estate who needs to organise this – not family or friends of the deceased.
To close an account, PayPal requires the executor to provide the following:
When planning for the future and what is to be done with a person’s assets, it is best to speak to a solicitor to decide how the digital assets should be organised. Planning for what is to happen when someone passes on is not new. However, including digital assets in a will is something that many people are, understandably, still getting used to. When making a will, it is best to include the details of all assets – physical and digital – to ensure they are accounted for.
As mentioned earlier, many digital assets require usernames and passwords before they can be accessed. It is not advisable to include these details in a will. This is because a will is a legal and public document that should not contain sensitive details like how to log in to a bank account or social media profile. This information should also not be stored on a computer or left in a family member’s home as it will be vulnerable to hacking and theft, which could cause a great deal of distress for the deceased’s family.
It would, however, be useful if these details could be given to someone who can be trusted, for example, the solicitor who is preparing the will. A database could then be attached to the will, which details the services used and the relevant information related to them. This information will only be divulged on death. This will ensure the relative safety of important information, and make it is easily accessible when needed.
It is always advisable to mention email accounts, bank accounts, social media profiles or even music libraries in a will, regardless of how trivial they may be. The account can then either be deactivated or passed on to the relevant person when the account holder dies.
Click here to view original web page at Digital Legacy – UK Legal Guide
Click here to view original web page at iPhone Wills: There’s No App for That
I was recently at a cocktail reception when a young couple asked me about their “iPhone will”. The couple had recently taken their first trip out of the province without their young child and had intended to prepare a will in advance. However, life got in the way, and it was only when they were sitting in the airport that they remembered they had forgotten to prepare a will. Worried about their lack of succession planning, they pulled out their iPhone and drafted a basic document setting out their desires for their estate should anything happen on their trip.
Unfortunately for this young couple, this attempt at drafting a will was likely ineffective. The formalities of a valid will are set out in the Succession Law Reform Act, R.S.O. 1990 c. S.26. For a formal will to be valid, it must be in writing (s.3). Additionally, a will is not valid unless: (i) it is signed by the testator at the end of the document (or their representative); (ii) it is signed in the presence of two witnesses and (iii) the witnesses sign the will in the presence of the testator (s.4(1)).
Certain of these formalities are not necessary where a testator makes a “holograph will”. A holograph will is valid if it is made wholly by the testator’s handwriting and signature without formality and without the presence or signature of a witness (s.6). However, in this case the couple was unable to sign the will (even digitally) due to the limitations of the phone’s program.
We are not aware of any cases that have considered whether a digital signature can satisfy the signature requirements of the Succession Law Reform Act or whether digital “handwriting” can satisfy the holograph will requirements. It will be interesting to see what a Court will decide in a situation where a testator attempts to sign a will digitally.
In conclusion, while it would have been effective for this couple to quickly write (and sign) a holographic will on a napkin, their attempts were foiled by the limitations of their iPhone. While it will be necessary for the Courts of Canada to adapt to technological advancements, for now this is an area where pen and paper remains the safe choice.
The one certainty in life is death.
The experience will be traumatic, scary and confusing for those left behind. For that reason, estate planning is the last conversation that any person wants to have. It’s critical, however, for consumers to ensure that their personal and professional assets remain in good hands.
For business owners and solo-entrepreneurs, succession planning can be much more complicated.
In the event of a founder’s unexpected passing, the remaining team needs to carry on without interruptions.
Attorneys and financial advisors can help facilitate a smooth transition for business operations, proprietary documents and plans. But what happens to intangible assets, like a business owner’s data?
“Today, business succession planning is multifaceted, taking into account more than just who will take over a business or company,” says estate planning lawyer Gary Altman. “In response to our technologically advanced world, we now include planning for one’s digital estate.”
A digital estate, according to Altman, includes financial accounts, passwords, social media content and any other data being utilized by a business. Business owners need a clear plan for who receives access to information and how long a successor should have access.
“These details should be spelled out in advance,” says Altman.
Altman points out that a succession plan can be as simple as a password-protected Word or Excel document on a secure computer.
“These systems could have all the business digital data and access to information that will be needed after the owner passes,” says Altman. “There are several companies offering various forms of data security and even companies that store passwords and provide access to those authorized.”
These documents should be prepared as part of a larger strategy and vision.
“The first step is to meet with an experienced estate and business planning attorney to discuss what the owner’s intentions are,” says Altman.
These professionals can provide direction toward the most effective tools and resources for accomplishing key intentions.
“The only way to ensure a smooth transition of data to successors is to have a legally documented plan, as well as to authorize someone else access to the full range of business data,” says Altman. “The plan will give clear authority to the chosen successor and explain what this person needs to do.”
Mark Snow and his team built SafelyFiled, an Internet-based company to assist individuals in the organization and storage of important documents, after dealing with the experience of settling their family members’ estates.
“My father had an insurance agency when he died, and though he was a very organized man, his method of organizing was not apparent until just about all the documents were found,” says Snow. “We realized that there had to be an easier way to deal with the masses of documents created by a business.”
With so many records in digital form, heirs may be unaware of assets and important files.
“We created SafelyFiled to help,” says Snow. “Secure cloud storage is ideal for this function. By not having the data on premises or on a desktop, it is protected from natural disasters like floods, tornadoes and fires.”
Snow says that a well-designed cloud service will provide protection from malware or cybertheft.
“It is critical that the cloud storage service also provide a way to make sure data is not changed,” says Snow. “If the data can be changed, there should be a complete audit trail.”
For instance, these records can be valuable in the event of an IRS audit or dispute with internal stakeholders. For accounting purposes, there should be strict limitations around deletion of files so that there is a traceable record of assets and liabilities.
Snow emphasizes that a succession plan should be designed with the future in mind.
“Assets like client lists or trade secrets need to be protected and secured, with reasonable assurances to the buyer that these assets have not been leaked,” says Snow.
The power tool that Snow recommends to maintain order? A checklist.
“The plan must be simple enough that it will actually be used,” he says.
This week saw the passing of one of our VA colleagues and it got me thinking… what do you do with your digital footprint once you’ve passed?
We hear a lot in business about risk management, succession planning,
ensuring your partner has access to your passwords, insurance policies and so on. Some businesses even write a plan for what to do in the event of illness or accident. But how many of those actually include information about what to do with your online presence – your website, Facebook, Twitter, LinkedIn, Google+, Pinterest – the list is endless!
It seems like I wasn’t the only one thinking about this. Recently the Courier Mail/Sunday Mail ran an article about just this topic.
Your social media accounts store years of memories, pictures, data and activities. So it seems that now, lawyers are advising people to think about including a clause in their Will about what should be done with social media accounts on their demise.
Facebook’s policy is that a profile can be deleted at the request of an immediate family member or memorialised so that others can post tributes to them on the Wall. You can see more info about this at the Facebook Blog. Similarly, immediate family members or a person authorised to act on behalf of the user’s Estate can deactivate the person’s Twitter account.
Make a list of all your online accounts and notify your Executor or partner of those. You might keep this list (together with access passwords) with your Will at your lawyer’s office. At the very least let your partner know where they can find them. They’ll have enough to deal with in the event of your death without having to try and remember every online space you have inhabited during your life.
The same applies to your website – include information about who is hosting the site, contact details; the domain name registry; domain expiry information etc so that your family can get in touch with the right people with the least amount of fuss.
If you haven’t thought about it before, now might be the time – before something happens or you fall ill. It’s something none of us like to think about but, as the saying goes, none of us are getting out of this alive, so making things as easy as possible for those left behind should be your focus.
Do you have any ideas for helping your family sort out your digital legacy? Share them below!