Considerations and Suggestions for an Increasingly Digital World
Before you can plan with your digital assets, you may need to know exactly what digital assets are. Digital assets are any electronic file, picture, composition, creation, right, or other proprietary interest in an online or digital format or service. This seemingly exhaustive list is meant to show how broad, and sometimes ill-defined, digital assets may be. For example, the photographs you store on an online “locker”, your financial account passwords and logins, your periodical subscriptions delivered to your e-reader, your Facebook and Twitter posts, your Netflix and Hulu accounts, and a host of other online or digital information can be considered digital assets.
Why are Digital Assets Important to My Estate Plan?
Estate planners are interested in digital assets because they are sometimes worth considerable amounts of money despite their intangible nature. For example, people pay thousands of dollars to host websites or thousands of dollars for domain names, and subscriptions to online media and research portals can run into the hundreds of dollars. In many cases, these subscriptions, services, and webpages have clauses in their Terms of Service agreements (ToS) that dictate what happens to these assets in the event of the death of the account holder. The ToS may say the person waived any right to the image, composition, or other digital medium when they submitted the item, or the ToS may be silent on the matter. Things can quickly become legally complicated when the creator retains original copies on their personal computer before submitting the digital asset to an online service provider with a restrictive ToS agreement. You can see how planning ahead for digital asset management can be a very important, and necessary, part of your estate plan.
How Can I Plan for My Digital Assets?
Below are five easy and inexpensive suggestions that may help you incorporate a digital asset management plan (DAMP) into your existing estate plan:
1. Create an “Electronic Lockbox”
Most people have several electronic accounts requiring user IDs, passwords, security questions, and other verification systems. Creating an electronic lockbox with all of this information is a critical step to your DAMP. An electronic lockbox can help your executor or trustee manage your digital affairs during, and perhaps prior to, probate. Usually, the account holder is the only person that knows their account logins and passwords, and unless they write them down, there can be considerable frustration and delay for estate administrators when trying to access such accounts. An electronic lockbox can be digital (such as being stored on a personal computer in a password protected Word document) or physical (such as a printout of all this information kept in the same secure location as your will and other estate planning documents). Regardless of the format, the logins and passwords should be reviewed at least every six months to ensure the information is still accurate and up to date.
2. Maintain a Separate Credit Card for all Digital Subscriptions and Services
Keeping a separate credit card for all your digital subscriptions and services allows your executor or trustee to review the billing statements to make sure they have accounted for all online sites that charge monthly or annual fees. You can also use this credit card for online purchases, such as Amazon or e-bay, which will alert your administrator to any accounts you have with those web services.
3. Maintain a Separate Email Address for all Online Logins and Services
Nearly all websites and online services require an email address for authentication. Many people use this email address, or some similar version of the email address, as their login name for the website. Keeping a separate email address for all your online activity, and putting that email address and password front and center in your electronic lockbox, can alert your administrator to websites you have accounts with that do charge a monthly or annual fee. Furthermore, by keeping all your website email addresses the same, if the administrator needs to change or reset your password to gain access to a website or online service, then the administrator will know which email address to check to confirm the password reset.
4. Maintain a Copy of all Terms of Service Agreements for all Accounts
While it is unlikely you read through the ToS before you clicked “accept”, it is a good idea to copy the ToS and keep it in your electronic lockbox. This is important for two reasons. First, it lets your administrator know which websites you have accounts with that require agreement to a ToS. Second, by keeping the most current versions of the ToS for each site in your electronic lockbox, your administrator can know what their rights are to request the deletion of your account and the return of all digital assets you may have contributed to the site or service.
5. Update Your Will to Specifically Devise Important Digital Assets
Because digital assets are intangible, people often forget to update their will to make a specific gift of a digital asset to their beneficiaries. As such, the digital assets will often fall into the “residuary” of a will. The residuary is a kind of “catch all” for everything not specifically gifted in the will, and it may have a different beneficiary than you would have wanted to receive your digital assets. This also gives you the opportunity to speak with a legal professional about your digital, physical, and other assets to maximize your tax savings and minimize future hassle for your overall estate plan.
– Norris Legal, L.L.C.
Thank you for reading this article. The information contained in this article is for discussion purposes only. The information contained in this article is not legal advice upon which you should act and simply reading this article does not make you a client of Norris Legal, L.L.C. or any other law firm. Thank you again.