Updating Your Estate Plans? Don’t Forget your Digital Assets.
November 30, 2020
Traditional estate planning typically involves a great deal of thoughtful consideration about how to divide money, personal property, and family heirlooms among our loved ones, in addition to leaving a personal legacy to support charitable causes that mean the most to us. But now there is something else to add to the mix: digital assets. If you already have a last will in place, but it doesn’t address your digital assets or appoint a digital executor, you can create a codicil that will allow you to add these important provisions. (It’s also recommended to create an updated power of attorney with similar provisions.)
What Are Digital Assets?
Your digital assets run the gamut from online bank accounts, cryptocurrency accounts and bill payment accounts to photo-sharing sites, social media accounts, websites, and online storage accounts. They can also include e-mail accounts, retail “rewards” accounts and accounts related to your personal interests, such as frequent flyer accounts, or even Pinterest and iTunes. But because protecting your privacy is paramount when you are interacting online, providing access to digital assets are adding a new level of complexity to estate planning.
Who Has Access to Your Digital Assets?
While some of these assets have primarily personal value, others may have financial value. And, if digital assets aren’t included in your estate plan, then your heirs might not know about that online stock or that bank account—and those potentially valuable assets could be lost forever.
In addition to naming a digital executor in your will, another option to grant access to your virtual assets after your death is to specifically give permission to your heirs. A master list of accounts and accompanying passwords should be kept in a safe place—such as a safety deposit box—and your estate document(s) should include instructions regarding where the passwords are located. Be sure to provide details for how you’d like every aspect of your online world handled after your death, including social media profiles: should they be cashed out, closed down, or left online as a memorial?
And most importantly - keep your information current. Usernames, passwords and lists of accounts must be updated regularly! Keep in mind: nearly every type of online account has a “terms of service” agreement, most of which are non-transferable, and there are several Federal laws that prohibit certain unauthorized access to computers and online accounts, as well as ability to share deceased users’ account contents with relatives. Originally designed to prevent online fraud, these laws can also keep surviving family members from accessing information related to a deceased loved one’s estate.
Remember: Digital Assets are Just That: Assets.
Including your digital assets in your estate planning can protect your privacy, even after death, as well as ease the management of your estate for your loved ones. Plan for your digital assets in the same way you would any other valuable tangible (or intangible) asset. After all, digital assets are today’s shoeboxes of photos, letters and other mementos. Planning can help to preserve this facet of your personal legacy in digital form.
But keep in mind that the area of digital estate planning is a relatively new field of law. It is important to research the rights and issues that may prevent your named digital executor from carrying out the terms of your digital asset wishes. For example, find out which websites will or will not allow account access to designated executors, what authorization is needed, whether an executor will have legal permission to access online financial accounts, and whether any applicable state law requires your digital executor to reside in the same state as you.
As always, we suggest that you have your estate planning documents reviewed by an estate planning attorney in your area for the most comprehensive solution for your needs.
Questions? Contact David Toll, JD, senior associate vice president, Office of Gift Planning at (215) 895-1882 or firstname.lastname@example.org.