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Untangling the Estate Planning Web of Digital Assets

has typically been a complex process with intersecting dollars and family members. Deciding who gets what is difficult enough when it comes to money, personal property, and family heirlooms. But now there is another estate planning consideration: .

Weaving Online Together

Digital assets run the gamut from online banking account and bill payment accounts to photo-sharing sites, blogs, websites, and online storage accounts.

Other examples of digital assets include:

•  E-mail accounts,  
•  Bitcoin accounts,
•  PayPal accounts,
•  Social media accounts (Facebook, Twitter, LinkedIn or Pinterest), and
•  iTunes accounts.

While some of these assets have primarily sentimental value, others can have significant financial value. In a 2011 survey conducted for McAfee, Americans on average valued their digital assets at nearly $55,000. If digital assets aren’t included in an , then heirs might not know about that online stock or banking account—and those potentially valuable assets could be lost forever.

No Spinning Allowed: Who Has Access?

As a relatively new issue that few people have yet addressed, digital assets are adding a new level of complexity to estate planning. The easy answer would seem to be simply giving heirs a list of passwords so that they can gain access to all online accounts. But that isn’t necessarily the best legal solution.

One of the better ways to protect virtual assets is to specifically grant heirs access and designate management to them in a will or estate plan. A master list of accounts and accompanying passwords should be kept in a safe place—such as a safety deposit box—and the estate plan should include instructions regarding where the passwords are located.

Don’t Get Caught in Legal Twists

But even having an estate plan and a master list doesn’t mean that heirs will gain automatic or easy access to your accounts since user service agreements and laws may restrict their access. Specifically, every online account has a terms of service agreement, most of which are non-transferable. And if someone does attempt to log onto someone else’s account, they may be violating not only the provider’s terms of service but also the federal Computer Fraud and Abuse Act, which governs certain unauthorized access to computers. Additionally, the Stored Communications Act can limit providers’ ability to share deceased users’ account contents with relatives. While the laws are designed to thwart fraudsters, they can also keep loved ones from accessing information.

sites are beginning to address these challenges. Google, for example, has what it calls the “Inactive Account Manager,” which lets the account holder determine what happens once the account is inactive for a certain period of time. Account holders can add up to 10 friends or family members to be contacted once the account has become inactive.

There is also some hope for a more uniform approach to fiduciary access to digital assets. The Uniform Law Commission, a Chicago-based non-profit whose goal is uniformity of state laws, is in the process of drafting a law that would “vest fiduciaries with at least the authority to manage and distribute digital assets, copy or delete digital assets, and access digital assets,” according to its website.

Untangling the Digital Assets Issue

The first and most important steps are identifying and valuing your digital assets. Initially, you should inventory of all of your online accounts, which may include: frequent flyer miles, emails, social networks, shopping sites, credit cards, and online bill paying for which you have passwords. Then take the next step of calling CRI’s estate planning professionals and letting them help you create an estate plan that incorporates your digital assets and meets your unique web of needs.




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