How much of your life is virtual? Do you know anyone who doesn’t have a computer, a tablet or a smartphone? Every email, every payment, every movie, every picture, every file in the cloud is a digital asset. What happens if you pass away and no one can retrieve them?
Your estate can get stuck in digital probate.
What is a Digital Asset?
Digital assets are your virtual goods and property. Your boat is real property – one of your assets. Everyone knows you have it – they can touch it, ride in it or buy it. The pictures of you sailing in it, taken with your smartphone and posted to social media, are digital assets.
Digital assets are broadly defined as information about you that is electronic, posted online or stored in a device. The device itself – computer, tablet or phone is also an asset – as well as all the logins and passwords needed to access your digital information.
Just like your boat, house, and car, your digital assets are part of your estate. But if no one has access to them, it can stall the distribution of your estate and cause dissension among your heirs.
Sentimental vs. Monetary Value
Like your physical property, some of your personal digital property may have monetary value, while other assets are merely sentimental. The pictures of your grandchildren on your phone might mean something to your family but unless you’re famous – they probably aren’t worth much money.
But a monetized YouTube channel or a profitable blog can go on generating income after the owner has passed away. Music, artwork or eBooks are all digital assets potentially yielding royalties which can add to your estate. Even the domain names you own may have resale value.
Then there’s your computer equipment – hard drives, monitors, phones, tablets. Depending on the age and quality, they could also have monetary value.
Lastly, when owning a business, there may be intellectual property, patented technology, websites, client records, domain names and financial transactions online. All of those assets, plus any social media, cloud storage, apps or third-party integrations will need to be considered when determining the dispensation of the company.
Estate Planning for Your Instagram Account?
Really? Has it come to this? To some extent it has. There are two primary reasons.
First, unless someone can locate and access your digital property, the value of it is unknown. Monetized digital assets create even murkier legal scenarios. The passwords and logins to the information you have online are as important as the contact information of a stockbroker or account numbers for your bank account.
Second, probate law has not caught up to the digital age. Without precedent or case law, lawyers and courts are feeling their way through digital asset management. Unfortunately, this can slow the probate process considerably. Since probate law varies from state to state, the potential for issues can vary radically as well.
You may think it laughable that your heirs would argue over a few photographs online and you could be right. But if you’re wrong, those digital assets – sentimental or monetary – can get tied up in court for an indeterminate amount of time.
Think About Your Digital Life
The next issue to consider is privacy. When organizing your digital assets, this may need to be a primary consideration. Once access to your digital assets is available, so is all the information they contain.
That includes movies you watched, websites you visited, emails you sent, things you bought, tweets, posts, texts, direct messages. Today, once private interactions and transactions are now public.
Sometimes there are things which might be painful for your family members to know. There could also be information that is harmful to other individuals or organizations. Assets don’t have to be illegal to set in motion needless disruption or contention.
For example, looking at a PayPal account history, your family may find you’ve been supporting one family member but not helping another. A spouse may see images or communications that were never intended for sharing.
Estate planning is essential to determine how your digital property is managed, dispersed or destroyed.
Download Free PDF Guide On The Probate Process
Creating a Digital Estate Plan
Digital estate planning relates to the assets, the devices they’re on and the ways to access them. Most of us are consistently warned not to share passwords or pins. If a false login is entered too many time, a device could be programmed to default to factory settings. That would destroy any digital assets.
Even if you haven’t started your estate planning, it’s a good idea to begin a list of your accounts, logins, and passwords. It may surprise you to see how much digital property you own.
These categories may jog the memory or simply offer an easy way to organize your accounts:
- Devices: (smartphones, tablets, and computers, external drives)
- Passwords to unlock screens or drives
- WIFI or network logins
- Livestreams (Netflix, etc.)
- Accounts for purchased movies, music, eBooks
- Financial transactions
- Online banking & other financial services
- Bill Paying
- Money management or tax programs
- Software as a Service (SaaS) accounts
- Software or subscriptions you pay for monthly or annually
- Social Media Accounts
- Facebook, Twitter, Instagram, YouTube, Google +, LinkedIn,
- Email accounts
- Storage Accounts
- Cloud accounts
- File storage/sharing services
- Websites or blogs
This is a suggested starting point – you may have more assets or other categories. As you make your list, it might be helpful to indicate any assets with potential monetary value.
If you own business, keep that list separate from your personal property. It is a given that your company assets will have some financial value.
You can store the information on an unlocked thumb drive with your estate plan. You can also store it in a secure online location and simply provide your attorney with the login and password to access it. Either way, you need to keep it current.
Identify a Digital Executor
As was previously noted, you may want to choose a separate executor to handle your digital estate. You can protect your reputation, as well as your family from being unintentionally upset or hurt by private information they were never intended to see.
Again, the case law is unclear about how digital assets are managed after death but ask your attorney what rights you have to keep private or destroy your digital assets after death.
- Are you allowed to have your search history cleared on Google or Bing?
- Can your digital executor withhold pre-designated texts from being shared?
- Can intimate photographs be removed from the cloud?
Even if case law hasn’t covered those questions, it may be to your benefit to assigning an executor outside of your family to handle your digital assets.
Who Gets What?
Though not everyone will be interested in your ten seasons of Top Chef videos on Amazon, it’s best to make some decisions about how to dispense your digital property. Grief and loss stir up emotions and families can find themselves feuding when they least expect it.
Document who gets what, both with your sentimental and monetary assets. Publicly available online assets, like digital photos or stories on blogs, don’t need to specifically be dedicated, beyond providing a link to their location.
Carefully consider who will acquire the rights to monetary assets such as podcasts, YouTube channels, websites and eCommerce stores. Though one individual may be best suited to manage the technology, you can still split the income among multiple parties.
One last caveat – not all digital assets may be owned or transferable. For example, when you purchased those Top Chef videos, you bought the license to view them – not the content itself.
Closing Online Accounts
Even if you don’t have a large estate or any monetized assets, you probably have accounts that need to be shut down in the event of your death.
Any automatic payments for services will need to be stopped. Personal social media accounts will most likely be closed. Any memberships or subscriptions to websites, online games, etc. will need to be stopped.
Each platform or service provider will have their own rules for closing accounts when the owner has passed. A death certificate may be required or notification from an attorney. Discuss the issues and options with your attorney when making your estate plan.
Digital Estate Planning
To avoid the pitfalls or glitches down the road, look for an attorney who is grounded in digital asset management.
Managing your virtual life after death protects your privacy, identity, and reputation. Your heirs don’t need to get caught in long drawn out probate process that’s still being legally defined.
Your digital assets merit a digital estate plan.