By Linda Melancon, Attorney at Law
When you begin thinking about estate planning and which assets to leave to certain family members or friends, the china, photo albums, or expensive jewelry may come to mind. But what about your Facebook account, your online banking account, or a personal website? As we increasingly rely on technology for our social, consumer and business activities, it’s essential that individuals include their digital assets in the legal documents that protect their legacy. Here are a few things to think about when planning ahead in the digital age.
- Know what your digital assets are. Computers, iPhones, and hard drives are tangible assets, but the non-tangible, electronic data they contain falls under the category of digital assets and is often password protected. These assets range from ones of pure sentimental value, like family photos on social media sites or email correspondence, to assets that carry monetary potential – such as PayPal accounts, company websites, etc.. In fact, a 2013 McAfee study showed that the average consumer has digitally stored assets worth approximately $35,000. Unfortunately, an estate executor may be unable to pay certain bills or even unaware of their existence in cases where this digital property was left out of an estate plan. To prevent this, take time to make a complete inventory of your digital assets and what should be done with each of them at the time of your death or disability.
- Understand your service user agreements. We tend to click “I have read and accepted these terms of service.” when we sign up for online accounts without thinking of the implications these agreements may have on our loved ones who are tasked with settling our estates after we’re gone. While Facebook allows you to designate a “Legacy Contact” to monitor your account if something happens to you, Yahoo! specifically states that user accounts may not be transferred to a different user and will be permanently deleted with all content upon proof of a user’s death. It’s also important to recognize that eBooks or iTunes files are licensed to – not owned by – the consumer and may not be given away at death like other assets.
- Discuss legal directives for digital assets with your attorney. Discuss your digital assets with your attorney to make sure that you, your estate, and your beneficiaries are protected. You may need to incorporate language in your wills, trusts or powers of attorney to account for these assets. It’s always discouraging to hear of parents who went through 8 weeks of court processes to gain access to a child’s computer or a spouse who was denied their loved one’s records – not because the deceased denied them access, but simply because those digital assets were not considered in their estate planning.
While it may be burdensome to regularly manage your digital assets, consider making it a yearly or quarterly habit to download online pictures, family videos or documents – especially ones from accounts that will be deleted by the service provider at the time of your death. Also consider leaving a list of usernames and passwords in one secure location. There are many online providers where you can store all of your usernames and passwords. Finally, for true business enterprisers, make sure that you have a qualified appraiser value your digital assets for tax and estate planning purposes.
Many individuals already have estate planning documents that don’t mention directives for digital assets. Living in the digital age may mean that some of your most important records aren’t in your home where a successor can walk through and find them. Don’t wait until it’s too late to make your digital assets a part of your legacy!