PLANNING YOUR ESTATE IN A DIGITAL AGE
WHEN JUSTIN ELLSWORTH, A 20-YEAR-OLD MARINE, was killed in Iraq several years ago, his parents wanted access to his Yahoo email account to see perhaps the last words written by their only son. But the company refused to grant such access, based on its “terms of service” agreement, which provides that accounts are nontransferable and terminate at death. The Ellsworth family took Yahoo to court and a California probate judge eventually ordered Yahoo to turn over the contents of the email account.
While this case resulted in a victory for the family, it highlights what is fast becoming a major estate-planning issue in today’s digital age: How to make sure that your “virtual assets”—electronic resources kept on your computers and related technology—can be appropriately handled and passed on to your heirs.
At the heart of the problem is that the physical assets of years past, such as photos, diaries, and letters, are being replaced by their electronic counterparts. Many critical business transactions, including banking, are also being done online. But the electronic versions of physical assets often are not so easily identified or transferred.
Currently, only five states deal with digital assets in their estate laws—Connecticut, Rhode Island, Indiana, Oklahoma and Idaho— and even these statutes vary in their comprehensiveness. Still, there are several steps families can take when planning their digital estates. First, identify your digital assets, which are generally divided into four main categories: personal, social media, financial, and business assets.
Personal Assets. These are typically electronic files—records, photos, videos, diaries and journals—that can have the same emotional value as their physical counterparts.
Social Media Assets. There are two distinct aspects to these accounts: first, the account itself—that is, the email address, user name or Twitter handle; and second, the contents of such accounts, such as emails, posts, tweets or photos. Most of us would assume that individuals own their username and their virtual correspondence. But, in fact, many online accounts expire with the life of the holder, effectively precluding an account from being transferred after death. This is changing in some states, so you should check with your specific social media account.
Financial Assets. This category includes accounts such as Paypal, massively multiplayer online games (MMOs), online bank accounts and bill-paying services. Access to online services may be critical in helping an executor identify your traditional assets. For example, your banking and brokerage statements may only be accessed online if you’ve opted to go paperless. Non-digital assets, such as reward and incentive programs, also may require online access for management and transfer.
Business Assets. These assets include blogs, websites and online stores or other e-commerce sites. Website domain names are transferable assets and website and blog content belong to the writer under copyright law, so the corresponding rights are also transferable.
Whatever category your virtual assets fall into, here are some steps to develop a comprehensive digital estate plan:
1. Take an inventory. Your list should include all digital assets with their name, location (that is, website address), username, password and other login information. The inventory should note whether any money is involved with the asset, such as an existing account balance. You should review the policy or terms of service for each digital asset, as well as the authorizations necessary for your heirs to deal with each asset. And this information should be stored in a convenient location, like a flash drive or an online site such as Legacy Locker and SecureSafe.
2. Provide comprehensive instructions with the inventory. These instructions should not only explain how to access your digital assets, but what should happen to them in the event of death or incapacity. Should they be memorialized, carried on, sold or deactivated? And would you like certain emails to remain private and others passed on to family members?
3. Choose the appropriate person to act as the “digital administrator.” This person may be a fiduciary appointed by a power of attorney or an executor appointed under your will. They must be trustworthy and available, of course, but also capable of dealing with the digital assets.
4. Choose the means for carrying out your estate plan. In your will, you should reference the digital assets, the person chosen to execute the plan, and your intent regarding these assets. Passwords and usernames should not be included in the will—that would cause the usernames and passwords to become public after death. You also might consider creating a trust for your digital assets.
Paul Hyl is a partner at the estate planning and elder law firm Genser Dubow Genser & Cona in Melville, N.Y. Adam Kahn, a law clerk at the firm, assisted in researching this article. Contact: Paul@Genserlaw.com.
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