Digital Assets and Estate Planning
By Associate Attorney Danielle Nodar
One of the most important decisions when creating an estate plan is determining what will happen to your assets when you pass away. When thinking of assets, the usual tangible or financial assets come into mind: real estate, bank accounts, cars, jewelry, etc. However, today as more and more of us are active online, another important and often overlooked asset are digital assets. Digital assets cover a wide range of a client’s assets, from the sentimental and personal items such as photos stored online and email and social media accounts, to assets with a monetary value, such as PayPal accounts, domain names, intellectual property stored on a computer, business information such as client lists, and cryptocurrency.
Without creating an estate plan that references these assets, state and federal data privacy laws may make it difficult or even prevent loved ones from accessing your digital assets when you pass away. If no planning has been done, an online provider’s terms of service agreement will likely control what happens to a consumer’s account after death. As the law slowly catches up to technology, legislation has been enacted to allow the owner of digital assets to protect these assets after death. For example, The Uniform Fiduciary Access to Digital Assets Act has been passed in the majority of states (including North Carolina) and provides that an owner of digital assets can specify who will be able to access and dispose of the digital assets after death. Therefore, by creating a formal estate plan, your documents can designate a specific person (such as your executor or trustee) to have access to your digital assets when you pass away. You can also include provisions that this person will have the ability to reset or recover any passwords in order to access your data and assets.
After determining who should be allowed access to your digital assets after death, additional steps should be taken to ensure that this person will be able to more easily access any relevant data or digital assets. During your lifetime, you can create a list of your digital assets so that your loved ones have an idea of where to begin in collecting digital assets. This list should include usernames, passwords, security questions associated with accounts, and instructions on what should be done with accounts after death, such as which accounts should be deleted. As this list contains key information for accessing digital assets, it should be kept in a secure location that can be accessed by loved ones after death. We do not recommend that clients include this information in their wills, as they can be accessed by the public after death.
In addition to creating an estate plan that plans for access and disposition of digital assets, certain online providers have internal procedures and policies that you can use to protect your digital assets after death. For example, Facebook ‘s privacy and security settings allow you to name a “legacy contact” to handle your account after you pass away. Instructions can be found here: https://www.facebook.com/help/103897939701143?helpref=faq_content.
Google also has an option where you can name an “inactive account manager.” This allows the Google account owner to specify what should happen to the account after it has remained inactive for a period of time. The account owner can list persons who will be notified that the account will be closed before it is deleted, giving loved ones time to access the account and download any important content before the account is deleted. Instructions can be found here: https://support.google.com/accounts/answer/3036546?hl=en.
With some basic planning, you can provide your loved ones with access to assets that could have considerable sentimental and monetary value. As society and our lives continue to get more intertwined with the digital world, it becomes crucial that estate plans are comprehensive and provide protection and instructions for our digital assets.
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Kelly Rains Jesson