This post was written by me & originally published in March/April 2012 issue of Facts & Findings, the magazine for paralegals.
When we think of estate planning, most of us think about wills and trusts to pass along and protect our property such as real estate, bank accounts, retirement funds and personal effects after we die. However, with technology becoming an increasingly large part of everyone’s lives, our digital assets are becoming as important as traditional material possessions. Until recently, estate planning did not address the disposition of such assets after death.
Digital assets are all of your online accounts and computer files. Think of them as “virtual belongings.” Digital assets can have both monetary value (eg: websites, domain names) and sentimental value (eg: social media accounts, photo sharing sites, blogs). As with other traditional assets, the only way to preserve, protect and distribute your digital assets is to include your wishes in a written estate plan.
Here are some common examples of digital assets:
- Multiple e-mail accounts
- Digital photos stored locally on your computer & photo sharing accounts such as Flickr, Picassa,Snapfish, Shutterfly, etc.
- Social network accounts such as Facebook, Google+, MySpace, Twitter, LinkedIn, etc.
- Website, blog and domain names
- Ebay accounts
- Paypal accounts
- Online medical records
- Computer files
- Paid online subscription services
- Online “cloud” storage services such as Dropbox, iCloud, Google Docs, Crashplan, Carbonite, etc.
Although it’s important to address our digital assets as part of written estate planning, some online services and social media accounts are starting to develop their own rules about what happens to an account when the user die. Here are details on how a few of the most popular social websites handle the accounts of deceased users.
Upon providing proof of death, family members can either request that the deceased user’s account be removed entirely or receive an archive of all of the decedent’s public tweets. However, Twitter will not allow access to the account itself or disclose any non-public information regarding the account.
In comparison, Facebook allows family members to delete a deceased user’s account or memorialize it using an online form to report the death and submission of some proof of death such as an obituary. Unlike, Twitter, a memorialized account stays in Facebook’s system, and only confirmed friends of the deceased user can still interact with the decedent’s wall.
LinkedIn requires that a form be completed about a deceased member and then puts instructions on its Website about logging into the decedent’s account and deleting it. This highlights the importance of getting organized and leaving written instructions to your surviving loved ones about how to locate and access online accounts and digital assets.
Identify Your Digital Assets
A typical estate planning questionnaire or intake sheet asks for traditional financial information including real estate assets, bank accounts, life insurance, stocks and investment accounts, retirement accounts, business interests, automobiles and other tangible personal property. However, even if the attorney doesn’t ask for it, you should document all digital assets such as e-mail accounts, social media accounts, websites, blogs, domain names, e-commerce accounts, online subscriptions and memberships, a description and location of all digital files, documents, photos, etc. and online investments or bank accounts.
Inventorying digital assets can be as simple as writing out a list of digital and online accounts, user names and passwords on a piece of paper and letting the attorney or family know where to find that list.
An increasingly popular alternative is to use an online document storage service to store your signed estate planning documents and other important papers, account information and other important papers (perhaps the list just described), account information and post-mortem instructions in the “cloud” with an online storage service, such as Docubank.com, TheDocSafe.com or LegacyLocker.com. You could also use more generic cloud-based document storage services such as Carbonite, MozyPro, Dropbox or CrashPlan.
Another new and promising service worth looking into is by Entrustet.com which offers an online encrypted service allowing subscribers to create secure lists of digital assets and accounts, designate heirs of each account and a digital executor, and decide which assets should be transferred to heirs and which should be deleted upon death. The base level of service is free but they also offer a paid premium service that automatically deletes designated accounts immediately upon notification of death by an appointed “digital executor.” They also offer a paid search service to locate online accounts after someone dies with detailed instructions about how to handle each account.
By the end of Step 1 the traditional estate-planning questionnaire will be complete and the client’s digital assets will be documented. This information can be delivered to the estate-planning attorney ahead of time or it can be brought to the first meeting. Together with the attorney and client, you will confirm the information and make sure that any and all digital assets are listed.
Naming a ‘Digital Executor’
This person will carry out wishes regarding digital assts and who should inherit each digital asset. In some cases this will be the same person designated as the personal representative, executor, or trustee of the estate or trust. However, in some cases you may need someone else to serve in that capacity.
The ultimate question for many people will be what should happen to your various digital assets after you die. The answer to that question will identify who, if anyone, will inherit a specific digital asset or a portion, or all, of your digital assets. Alternatively, you may wish to have a specific digital asset, a portion, or all, digital assets deleted upon death. The digital executor will be responsible for carrying out those wishes.
Draft The Estate Plan to Address Digital Assets
Given the relatively new emergence of digital assets and the somewhat archaic parameters of the probate and trust codes in most states, options addressing digital assets are limited. In general, digital assets cannot have a beneficiary or a “transfer-on-death” designation. In most estate planning documents (ie: wills or trusts) not drafted specifically with digital assets in mind, digital assets will pass along with the residue of the estate.
This can be changed by including specific bequests of digital assets in the will or trust. The specific bequest could give all digital assets to a particular individual or each individual digital asset could be left separately in accordance with your wishes.
Another planning option is to add language in the specific bequest section regarding digital assets and refer to an addendum for the specifics of the distribution plan. The distribution plan is attached to the will or trust and is incorporated by reference in the original document. If a change is later made to the digital asset distribution plan, the only thing that must be updated is the addendum. To fully incorporate the revised addendum, you may still need to execute a short codicil to the will or an amendment to the trust, but the body of the document itself can remain fully intact.
Use as Online Service
Entrustet and Legacy Locker are free online services that provide an easy and cost efficient way for you to stay on top of digital assets. With these services you can generate much of the information necessary to complete the digital asset distribution plan addendum discussed earlier. When meeting with the estate-planning attorney to sign the will or trust, the digital asset distribution plan can easily be finalized and incorporated into your estate plan.
More than 65 percent of Americans do not have any form of written estate plan in place, let alone an estate plan that addresses digital assets. I encourage everyone to make sure they have a written up-to-date estate plan that addresses not only traditional assets but online digital assets as well. At the least, digital assets provide a lasting legacy to loved ones about the things that were important to the deceased, their values, history and memories.
Digital assets document our lives in many ways. If loved ones are not apprised of how to access those assets, that history and a piece of ourselves, will be lost with us.
Kristen Marks, a/k/a ‘My Pink Lawyer,’ is a public speaker and Florida estate and special needs planning attorney who’s been serving women and their families for over sixteen years. Formerly a women’s business coach and Pink Cadillac driving sales director with Mary Kay Cosmetics, Kristen continues to educate and mentor women through her Women Empowered workshops and other speaking engagements. Kristen offers several free women’s estate planning and minor’s guardianship guides on her website (www.MyPinkLawyer.com) and is available to speak to your group upon request. Kristen has been married to her law school sweetheart for 16 years and they have two (2) children. You may follow My Pink Lawyer onFacebook (www.facebook.com/mypinklawyerfan), LinkedIn(www.linkedin.com/in/mypinklawyer) and Twitter (www.twitter.com/mypinklawyer).