What You Need to Know About Your Digital Assets In the Event of Your Incapacity or Death

What will happen to your digital assets in the event of your incapacity or death? Can your spouse or other family members easily access them? (Is there anyone whom you would not want to have such access?)  What will the internet service firms demand to see before they will disclose your private information to anyone else?

 

Estate planning for digital assets involves three steps:
  1. Organizing your digital assets so that your agent, executor, or trustee can know what files and accounts you have and where they are located;
  2. Adding language to your Power of Attorney, Will or Trust that will empower your agent, executor, or trustee to gain access to all of your data and the information being stored by third parties; and
  3. Updating the bequests in your Will or Trust as necessary to make any bequests of your digital assets to one or more of your beneficiaries.
1. ORGANIZING YOUR DIGITAL ASSETS

 

You should prepare an inventory of your digital assets that would separate them into two categories:
  • Digital Property With Monetary Value – This category would include any digital asset that produces income, such as websites, blogs, domain names, copyright material, trademarks and code, as well as art, photos and eBooks. Other digital property that may have monetary value are PayPal, accounts at online banks, loyalty reward programs and other accounts used to hold or manage money or other forms of purchasing power; online stores that you manage and the digital assets of any businesses you may own, including databases, websites, storefronts, accounts and code. Some computing hardware may also have monetary value, for example, the remaining portion of computer leases. You should also ensure that the digital assets of your non-web-based businesses be included in the valuation of the business for the purpose of sale or transfer to heirs.
  • Personal Digital Property – Examples include computers, smart phones, tablets, external hard drives, digital music readers, digital cameras and other computer hardware an individual owns. It also includes any information stored electronically on devices, computers or in the cloud that may have no intrinsic value on the open market, but does have personal value to your family and friends. This kind of information includes accounts for email, social media, photo and video sharing, gaming, storage and personal websites and blogs. It may also include intellectual property such as domain names, copyright material, trademarks and code you may have written.
The inventory of your current digital assets should include usernames and passwords, or where they are stored. Keep this inventory in a safe location, and limit those who know of its whereabouts. Update the inventory regularly so that it will always reflect your current information.

 

Rather than starting from scratch, you could use a web site that will organize and store your information for you. There are now a number of these websites that offer estate planning-related services, including digital lockers for data storage, post-mortem messaging for family members, and a digital assets locator.

 

2. UPDATING YOUR POWER OF ATTORNEY, WILL, AND TRUST TO AUTHORIZE ACCESS TO YOUR DIGITAL ASSETS

 

You should update your Power of Attorney, Will, and Trust (if applicable) to add language whereby you give your consent to your agent, executor, and trustee gaining access to your protected information that is held by any internet service providers.
This type of authorization is sanctioned by the federal Electronic Communications Privacy Act, and will help your agents, executors, and trustees to collect all of your digital assets and transfer them as you direct.

 

3. MAKE BEQUESTS OF DIGITAL ASSETS

 

In your Will or Trust you can make gifts of specific items of your digital assets to one or more beneficiaries. If you do not want to make specific bequests, you could add your digital assets to the pool of your tangible personal property and household goods that your beneficiaries can divide up among themselves.

 

Place Digital Assets in Lifetime Trust. As an alternative to keeping your digital assets in your own name to pass under your Will, they may be good candidates for transferring to a trust that you would create during your lifetime.  Since the trust can survive your death, transfer problems that might otherwise arise at an owner’s death can be avoided. The trust can also provide for the management of copyright and trademark rights that may be attached to such assets.

 

CONCLUSION

Individuals who own their own business or use the Internet or smartphones to manage a significant part of their lives should contact a Meyer Unkovic & Scott Private Clients Group attorney for advice and counsel on updating their estate plan to include all of their current and anticipated digital assets.

For more information about this or any private client matter, please contact Dan Gallagher, Martin Hagan, or any of the MUS Private Clients Group attorneys.

 

This material is for informational purposes only.  It is not and should not be solely relied on as legal advice in dealing with any specific situation.