Estate Planning Solutions for Digital Assets
Deb Lush (Winter 2014-2015)
From the avid blogger to the occasional e-mailer, everyone has digital assets. Yet, few have thought about what happens to those assets after death. This article will explain what digital assets are, the hurdles associated with them after death, and practical solutions for making it easy on your family.
Hurdle #1: How will the family know about my digital assets (and what are they, anyway)?
Solution: Create an inventory of digital assets.
Digital assets fall in two main categories: (1) any online account that requires a username and password, and (2) any file stored digitally, such as on a computer, phone, tablet, server, DVD, CD-Rom, or “cloud” storage. The list is infinite – here is a sampling:
• Social media accounts. Facebook, Twitter, Google+ and potentially dozens more.
• Email accounts. Gmail, Yahoo, AOL, Hotmail, etc. Many people have more than one.
• Online banking. Online banking, which requires a username and password, is a commonplace practice.
• Investment accounts. Similarly, a growing number of people access their 401k, IRA and other investment accounts online.
• Other financial products. Online access may also include credit card information to a cellphone service to a credit monitoring service.
• Online entertainment accounts. Netflix, iTunes, Audible.
• Other. Amazon, eBay, Flickr, Shutterfly, Snapfish, Pinterest, “cloud” document storage, and countless others.
Whether your digital assets are valuable or not, after your death, your loved ones will want to identify all of them to make appropriate arrangements, such as closing an online banking account for security purposes or obtaining access to all of your photos on Facebook (or elsewhere), which will be priceless to your family. The only way to help your family know is for you to create an inventory or list of all your digital assets.
Hurdle #2: How to access it.
Of course, knowing the asset exists does little to give your loved ones access to it. You should reveal in your inventory your username and password for each digital asset, as well as any other information necessary for your loved ones to access the asset.
Hurdle #3: How to reveal the information only to the right person(s).
The information required for your loved ones to access your digital asset is highly sensitive. Identity theft is a growing crime. You should ensure the information is protected such as keeping a hard copy of the inventory in a safe deposit box or with some other form of security. Tell only the persons you trust where the inventory is and ensure they have access to it. For example, make sure the person is listed with the bank as having access to the safe deposit box.
There are a growing number of businesses that focus on protecting your digital assets. Legacy Locker, Secure Safe, Entrustet, and DataInherit are examples just to name a handful. Of course, you will want to research and verify any business that solicits personal information.
Hurdle #4: What do with it?
Include in your inventory instructions for what should happen to each digital asset after your death. Your loved ones will not know what to do with the digital assets unless you tell them. For example, some Facebook users may want their Facebook page closed after death while others may want their page to be continued as a legacy. Also, in your instructions for each asset, you should identify the person responsible for doing it.
Hurdle #5: Who is in charge?
Your family needs to know who should be in charge of your digital assets. Disputes can occur when one family member believes the Facebook account should be left open and another believes it should be closed. Who decides? Be clear in your estate plan who controls the digital assets. The law in this area is too unsettled to leave the matter to chance. Make clear who is in charge.
Hurdle #6: How can I transfer the digital asset – if I can transfer it at all?
Solution: Know your rights.
Whether you can transfer your asset, account or other digital property after death may be limited by the provider. For example, with regard to most digital images, photos belong to you, but the account is personal and cannot be transferred after your death. In a case covered by news outlets, Oregon woman Karen Williams lost access to all of her son’s photos, messages, and other memories on Facebook when her son died in 2005 at 22 years of age.
Similarly, the user agreement for Apple & iTunes says your account is not transferable after death, but while you’re alive, you can transfer the collection to your other devices such as CDs, a phone, or an iPod, for your use as you see fit. In other words, transfer of your digital collection of music is a violation of the contract. Even if someone has your password and account information, accessing such information is violation of the contract and potentially a cyber-crime.
An app for Facebook called “If I Die” presents an interesting solution for those who wish to have posts appear posthumously. The app allows you to name several “trustees” who would be responsible for such posts, which you can write ahead of time. It is even possible to schedule such posts. Anecdotally, one woman diagnosed with cancer created a video for each of her daughter’s birthdays until the daughter turned age 18.
For Google users, you can use Google’s “Inactive Account Manager” to designate “trusted contacts” to retrieve online information after a certain amount of time of inactivity.
The user agreements, apps, and most notably – the law – in this area are in a very nascent stage. Most agree that the 1986 federal law, the Stored Communications Act, is out of date and inadequate. There is significant debate over what current laws should say, and whether more information is needed before updated laws can be made. The Uniform Law Commission in recent years approved a study committee on fiduciary power and authority to access digital property and online accounts.
A small handful of states have enacted laws, but some question whether such laws would control over user agreements with contrary terms, not to mention whether the outdated Stored Communications Act preempts any state law attempt to modernize the rules. A measure addressing digital property was introduced last year in Oregon (Senate Bill 54) but did not pass. The issue is complex and the solutions are not simple.
In this period of legal uncertainty, the best approach you can take with regard to your digital assets is to read the user agreements that apply to your assets while taking advantage of the solutions offered in this article. Create an inventory of your assets that identifies each asset, relevant usernames and passwords, and gives instructions with regard to what – “e.g., close the account” – and whom – “Dad, who is my executor” – as to each asset. And perhaps for now, consider buying your music the old-fashioned way, with a three-dimensional compact disc that you can transfer by law to your loved ones.