DIGITAL ASSET ESTATE PLANNING
Death in the digital age is a lot more complicated than it used to be. Traditionally, family members and fiduciaries start administering an estate by reading the individual's mail and sorting through records at the person's home. Today however, with online accounts and paperless billing, these traditional approaches may not be available to fiduciaries. The information needed to locate and access tangible and digital assets is often in the digital world itself. Email accounts are typically the primary access point to other online assets. Online statements, notifications, messages and paperless bills may all come through to the decedent's emails. Moreover, the decedent's address book and calendar may even be tied to or stored within one or more email accounts.
Given the breadth of digital assets today, it's difficult to know where our survivors would start. Further complicating these matters is the uncertainty of ownership and transferability laws that do not adequately address the rights to property known as "digital assets."
What are Digital Assets?
Digital assets are broadly defined to include any online account and any file stored on a person's computer or a server. Online accounts include things like social networking sites (e.g. Facebook, Twitter, LinkedIn) email accounts (e.g. Gmail, Hotmail, Yahoo!), online financial, brokerage, and bank accounts, photo-sharing sites and blogs. Digital assets also include online resources like eBay and PayPal, and even domain names and URLs. Digital assets are also comprised of files that are stored on a personal computer, laptop, tablet, smartphone, or on a server through an online backup service. These digital files can include business documents, address books, family photos, music, personal journals, family recipes, and a whole host of other types of information that individuals may want their heirs to eventually have. In short, any online account that is protected by a username and password can be classified as a "Digital Asset."
Accordinglly, it's not just the professionals such as computer programmers, photographers, writers, musicians, and other artists who have created digital data. Everyone of us who has an e-mail account and/or stores digital files such as documents, music or photos has digital assets they should be concerend about.
Laws Addressing Digital Assets:
To date only 5 states have enacted laws that relate to digital assets with regard to estate planning, and New York is not yet one of them. Thus, the rights of executors, guardians, and beneficiaries with regard to accessing digital assets are muddy at best. In addition, there is no real consensus regarding ownership and transferability of digital assets or the category of property in which digital assets belong. Some say they are intellectual property, while others say they are intangible property. In reality, some of the digital assets may not be "assets" at all, but mere licenses to use the website's services. Licenses are generally not transferrable and expire upon death. There is also a higher risk of online identity theft as criminals have an enhanced opportunity to hack unmonitored accounts, open new credit cards, even apply for jobs or procure state identification cards using the deceased's identity.
6 Steps to Safeguard your Digital Legacy:
1. Make an Inventory and Update it Regularly - Identify all of your digital assets and their usernames, passwords & identity questions. Include your computer password, your on-line checking, investing, bill-paying & pay-pal accounts, all of your social networking sites, and include your photos and music sites.
2. Find a Safe Place to Store your Inventory - You can tell a trusted person where the list is, or you can upload this information to one (or more) of various internet Digital Asset Storage Companies.
3. Name your Digital Executor - Name or Identify the person who will be charged with carrying out your digital estate planning wishes.
4. Let Your Wishes be Known - Let your Digital Executor know or give him or her access to your Inventory and more importantly, what should be preserved and what should be deleted. Designate who should have access to and/or inherit your digital assets.
5. Power-of-Attorney - Consider adding language to your Power-of-Attorney so your agent can access your on line accounts in case it becomes necessary.
6. Terms of Service - Since terms of service of social media and other digital asset sites may still take precedence over state laws and your wishes, now is a good time to review the terms of service agreements that you previously never read.
Conclusion:
Digital Asset Estate Planning is still an emerging area of the law. It is certain that case law and state legislation will play an important role in deciding the rights of family and executors to access a deceased individual's digital assets. In spite of the complexities inherent in this area of law and the current lack of clarity, it is nevertheless imperative that clients and lawyers plan as adequately as they can. Failure to properly plan may lead to unintended consequences for the decedent's family including increased time and expense in administering the estate as well as the possible loss of significant assets. The result can be mitigated by engaging in estate planning that includes digital assets.
Call our offices to speak to an attorney about planning for your digital legacy.
Be sure to follow Channel 7 Eyewitness News at 11:00 P.M. in the near future for a Special Report by Michelle Charlesworth on Digital Asset Estate Planning featuring an interview with Steven Adler. |