Does your current estate plan account for the digital assets you have acquired over the past five to ten years? As the world increasingly moves off paper pages and out of brick-and-mortar buildings, it moves increasingly into the digital realm – and that means you may have valuable digital assets that aren’t accounted for in your current will, trust, or even a more comprehensive estate plan.
Examples of Digital Assets
First, let’s identify the most common digital assets worth including when you meet with your estate planning attorney:
Personal digital property
Personal digital property includes things like:
- Domain names
- Intellectual property that is copyrighted or trademarked, including any digital coding you own
- All of your computing hardware and digital devices
- Information stored online or in the Cloud, which includes your email accounts, social media accounts, photo and video storage, digital albums, online storage accounts, video gaming accounts, or any websites/blogs that you write or manage
- Hard or digital backup drives or storage devices
Failure to include these items and their access/passwords could mean a loss of priceless family photos or key information that left out during the most recent estate planning update.
Personal digital Assets with monetary value
Then there are digital assets that have monetary value, and these can accidentally slip off the radar when creating your estate plan:
- Websites or blogs that generate revenue, including Amazon, eBay, Etsy, Craigslist, and others
- Photos, art, eBooks, music, or any other type of digital or intellectual property that generates revenue for you
- Domain names
- Digital accounts used to pay/receive or save money, like PayPal, CareCredit, Rewards Programs (all those frequent flyer miles, for example), or other accounts with credits in your favor
As you can imagine, these same types of digital assets are also held by business owners, in which case they are considered digital business property, and should be handled accordingly. Again, your estate attorney should help you brainstorm to remember and add any digital assets you’ve forgotten about along the way.
Make a List of Your Digital Assets
Make a list of your digital assets and keep it stored in a Cloud or clearly marked backup device in your safe, safe deposit box, or in the pocket of your estate planning folder.
While digital property is accounted for similarly to real, physical property or financial assets, its online, password-protected nature makes things tricky if digital assets aren’t accounted for in your will or trust.
- List each account and its online address
- Add your username
- Write the password for each one and make sure to update the list each time you have to change a username or password
Make a list of any computers, tablets, gadgets, etc., that require a login/password and include the information for these as well.
The Importance of Documenting Accounts, Usernames and/or Passwords
We can’t emphasize enough how vital the accuracy of your digital assets account names, usernames, passwords, and other log-in information when it comes to your estate plan. In order to protect your identity and your privacy, stringent rules and laws have been put into place. They can be impossible for your estate’s executor, spouse, or family members to navigate without accurate password information or the correct legal documentation.
Many companies will not even release information upon receipt of an official death certificate and/or legal proof of your executor’s role in your estate. Ensuring your estate plan gives your trustee or executor the authorization required to access any necessary digital data can mean the difference of preserving those assets or losing them completely.
Decide How You Want the Assets Handled
Some clients prefer that all of their email accounts and social media accounts are deleted within a certain amount of time after they die, while others are fine having designated family member(s) or a friend(s) manage the account for them to keep their memory alive.
The How of how each digital asset is handled is up to you, and your estate’s executor (or your designated “Digital Executor”) is beholden to carry out those wishes. If you have online stores or revenue-generating accounts, determine whether or not they close down immediately upon your death, whether they’re to remain open until revenue/goods are sold out, or whether the assets are passed to someone else. The same is true of any other revenue-generating, digital assets you own or control.
State of California
This designation is not always a legally binding or enforceable position in most states. For example, the State of California passed “The Revised Fiduciary Access to Digital Assets Act” in 2017, which allows executors and trustees the rights to gain access to digital assets after an individual’s death under certain conditions.
If you plan to select a Digital Executor who is different than your executor or trustee, it’s wise to choose someone who can work well with your legally recognized representative.
Contact the Tseng Law Firm to learn more about estate planning for digital assets in the state of California.