When you think about drafting a will or a trust, and you mentally go through your assets, you might forget one very important item: your digital assets. Your heirs and executors will not only need to distribute tangible property like your house or your car; your digital property will need to be divided up as well.
You have probably invested a lot in your digital assets, both in time and money. You should be able to pass this on to your loved ones. Some smart estate planning can help you protect your digital assets and preserve them for your heirs.
When you make a plan for your digital property, you make life much easier for your executor and heirs, and you ensure that your memories will be preserved the way you want them. But figuring out how to handle your online life after your death takes a bit of planning.
What Are Digital Assets?
Your digital assets are everything that you store electronically, either on a local computer or in the cloud. This could be anything from your Facebook page and email accounts to digital access for your credit cards and bank accounts to the domains and websites you own.
Your digital assets can include media accounts such as iTunes or Netflix, frequent flyer accounts, grocery store rewards programs, and your posts on social networks such as Twitter and Instagram. Electronic devices such as your computer, phone, or tablet and all the data on them are also some of your digital assets.
More than two-thirds of Americans use the internet, and the majority of those have a Facebook page. There have been millions of photos posted on Flickr and Instagram, countless videos uploaded to YouTube, and millions of posts to Twitter, Facebook, and other social media. A little piece of that belongs to you.
The online world is a part of the fabric of our daily lives. Your digital assets are valuable. They’re worth protecting.
Why Your Digital Assets Matter to Your Heirs
Place yourself in the shoes of your executor. Someone you love has passed away, and it’s your job to take charge of her financial accounts and wrap up her affairs. She didn’t have a chance to give you a list of her passwords before she died, so you can’t access her accounts online. You’re paying two sets of bills now – your own and those of the estate. Even worse, your life is tied up in phone calls to utilities and credit card companies. You sift through piles of mail, trying to make sense of the bills. Notices get sent to her email, but you don’t get them because you don’t have access to her accounts.
You present the proper paperwork: her death certificate, proof that you are the executor of her estate. Some providers give you access, reluctantly, but others refuse. Once you notify Yahoo that she has died, the company deletes her email account, and you have no way to notify her contacts that she has died. Important email notifications get bounced back with no forwarding message.
It doesn’t have to be this way. When you include your digital assets in your estate plan, you can give your executor legal authorization that will allow providers to grant access to vital online accounts.
With proper planning, you would have the authorization to turn your loved one’s Facebook page into a memorial, so her friends have a place to share memories. With access to her digital assets, you could protect her legacy and also make sure that her accounts are safe from fraud and hacking now that she’s not here to watch over them.
Laws Governing Digital Assets
As with so many things about the internet, federal and state laws are catching up slowly with current reality that the majority of us will have digital assets to leave to our beneficiaries when we die.
The laws governing electronic forms of communication, such as emails and texts, were not written to include the fate of your digital assets after you die. The federal Stored Communications Act prohibits email providers such as Google and Yahoo from sharing your stored communications with anyone but you. The Federal Computer Fraud and Abuse Act make it a crime to access someone’s computer without permission.
Fortunately, state lawmakers have stepped up to the challenge. In 2012, the Uniform Law Commission drafted the Uniform Fiduciary Access to Digital Assets Act (UFADAA). The act has been revised (2012 was an eon ago in the evolution of the internet), most recently in 2015. It has currently been adopted or is under consideration in all but three states.
The UFADAA recognizes that digital property, like tangible property, is part of your estate once you die and that your executor has the right to access your digital assets. The powers granted by this law extend to people to whom you grant Powers of Attorney and to conservators, who look after the estates of people who are unable to manage their affairs.
Unhappy with the terms of UFADAA, an internet service providers’ organization drafted their model legislation, the Privacy Expectation Afterlife and Choices Act (PEAC). California, home to Silicon Valley, enacted legislation that includes elements of both UFADAA and PEAC.
The California law is much more restrictive than UFADAA. It requires your executor to show that you have given your permission, in writing (such as a clause in your will or trust), to gain access to your digital assets. If your consent is not in writing, the Terms of Service (TOS) for the account determine whether your executor gets access. In almost every case, the TOS will lock your executor out of your digital property.
The moral of the story: it’s a very good idea to put your wishes regarding your digital property into your will.
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Some Digital Property Isn’t Your Property
Buried in your contract with online platforms (you know, the one where you clicked “agree” without reading it) could be language that limits your right to pass on your digital assets to your beneficiaries. For example, Yahoo’s user agreement states that there is no right of survivorship and that the account is not transferable. This means that your Yahoo account doesn’t belong to your heirs the way your car or house would. In most cases, unless you leave your password for your executor, he or she will be able to see only limited information in your emails and won’t be able to send messages from your account.
You may believe that you own the music you buy and download on iTunes, but the fine print says that you have only paid for a license to listen to the music; those songs don’t belong to you. The same is true for eBooks and downloaded movies. You can give your collection of jazz recordings on vinyl to your music-loving pal Sam, but you can’t leave him your digital music collection under current law.
How to Include Digital Assets in Your Estate Plan
Without a plan, your digital assets can float on the web like a ghost ship. After a year without activity, your Yahoo accounts simply disappear forever.
To protect your digital assets, make sure that your estate planning documents, such as your will, trust, or Power of Attorney, include language addressing your online legacy. Be specific about what kind of authority you wish to give your executor over your digital property and whether you want your digital assets given to particular people.
Beyond Your Will: Best Practices for Passing on Digital Assets
To make your estate planning easier and to support your executor, create a list of your digital assets. Make a second list with information about how to access each account and keep it in a secure place, such as a safe deposit box or home safe, or give it to your attorney to hold until after your death.
This may sound overwhelming. If you’re like most people, you probably have dozens of logins for everything from your newspaper subscription to your electric bill. The most crucial logins to include on the list are your email accounts. From your email, your executor can use password recovery to gain access to other digital assets. If you use a secure app to store your passwords, that one login is key since it can unlock all or most of your other accounts.
It’s a good practice to download and store your digital assets offline. While you probably don’t want to spend hours preserving every Instagram photo, you might want to archive your favorite images and posts – the parts of your online life that are most meaningful to you and that you want to pass on to your family and friends.
Some platforms allow you to create a plan for your digital afterlife. Google’s Inactive Account Manager allows you to designate someone to manage your accounts once they have been inactive for at least three months. Facebook allows you to designate another Facebook user as your legacy contact. The legacy contact has the right to take certain actions, such as adding new friends, as they turn your page into a memorial space.
Life online changes so quickly, it may be hard to wrap your mind around adding your digital assets to your estate plan. It’s essential to do it, however. Don’t leave this important part of your legacy untended.