AZ Trusts and Wills- Managing digital assets-by Shannon Trezza
Managing on-line and digital assets in your will or trust-by Shannon Trezza
So much of our lives today are on-line. Over 70% of Americans use e-mail. iTunes users have downloaded over 25 million songs. Netflix has over 29 million users.
We use Kindles and iPads to read books. Our hard drives are filled with photos, songs, and movies. We conduct banking and view our investment accounts on-line.
Although we spend so much time working, shopping, and using entertainment on-line, we may never consider what happens to our digital assets when we die. It’s time to make sure you include all of your digital assets and on-line presence in your estate planning process.
What might be some of your digital assets?
Here are some of the most common digital assets, including some of the ways you conduct business on-line.
- E-mail accounts
- Social media accounts – such as Facebook, Twitter, Pinterest, LinkedIn, and Google+
- On-line banking and investment accounts
- Financial products – such as credit cards, cell phone, cable, and utility accounts
- Rewards programs – such as frequent flyer programs, hotel, and rental car
- On-line entertainment – such as iTunes, Netflix, Hulu, Pandora, e-books, Kindle, Barnes and Noble, and on-line gaming accounts
- On-line shopping or payment accounts – such as eBay, Amazon, and Paypal
- Digital storage –such as Flickr, Instagram, and Photobucket
- Domains, blogs, and website – often an essential part of any small business
As an individual, if you are responsible for on-line banking accounts and conduct most of your family’s financial affairs on-line, at a minimum you need to consider how your spouse or next-of-kin will take care of your family’s needs in the event of your death.
Keeping a list in a very secure location that includes all of your accounts, user names, passwords, and answers to security questions is a good beginning.
Some people use on-line services to do this, while others will have a written list they keep in a safe place. You will want to reference the list in your will, but since this list will be updated on a regular basis keeping it with your will is not necessarily practical.
Just as you would make sure the guardians of your children, your spouse, or executor of your estate would know how to get access to your will or life insurance policy, it’s important to make sure they also have access to any of your on-line accounts or digital assets.
You may also want to explicitly state who can’t have access to those accounts. There are cases where family members want to get access to a deceased loved one’s e-mail account regardless of whether the person wanted those individuals to have access.
Specify in writing what your wishes are. Perhaps you would like your Facebook or e-mail account cancelled. These are all important considerations when doing estate planning with your digital assets.
Keep in mind that the internet service provider or other digital provider will have rules governed by the contract with the user (the deceased).
You might even want to designate someone to handle just your digital assets who is tech-savvy. This would be in addition to someone who handles your other affairs. It can be difficult enough for family members to handle all the details after the death of a loved one. Whatever planning you do will make their lives easier.
The Value of Digital Assets
Digital accounts are a very specific kind of asset. Your executor or next-of-kin may not be aware of the value of your digital assets, especially if they are not tech-savvy. Just as your estate might have obscure but valuable items, digital assets require some specialized knowledge.
Many people may dismiss the value, for example, of on-line gaming. However, there may be significant value in the virtual assets you have in a game. In 2009, an individual sold a virtual space station for $330,000 on a game called Planet Calypso. You might have a sword in a video game that could sell on eBay for $500.
This is information you may want to include in your list of digital assets. Don’t assume that your next-of-kin has the knowledge to adequately assess the value of your digital assets
If you own an iPad or Kindle you may have a large and valuable collection of digital books and music. Before e-books and digital music it was simple to designate in your will who would get your library or specific books and cds after you died. Because of the intricacies of user agreements with e-books and other digital products, you may want to consider naming who would get the actual hardware or computer that contains your e-books, music, and movies, along with passwords and user names.
Small Businesses and Entrepreneurs
Many individuals, entrepreneurs, and small businesses have an internet presence that is valuable as well. Bloggers often have revenue streams that come from information products, Google ads, or may have e-mail lists that have thousands of individuals on them. All of these assets have value and need to be considered when planning for your estate.
It may be that you own domain names that can be sold or have some value. Perhaps you have developed an information website or have coupled your small business with an on-line presence that has value as well.
When you are considering all of your assets, think about the full spectrum of your on-line presence.
If you have Facebook accounts associated with your small business or LLC, you will want to make sure that more than one person has access or that you include user names and passwords in your list of digital assets.
If you hire an employee or contractor to manage your on-line presence, you will want to make sure that more than one person has administrative access to those accounts. Consider whose name the account is under and how you want that handled in the event of your death or the death of your employee/contractor.
As you consider all of the issues related to your digital assets, remember that state and federal laws may not have caught up with the current state of technology. Only 5 states, as of January 1, 2013 had any laws concerning access to a deceased person’s on-line accounts. And, Arizona is not one of those states.
There may be a lot of grey area when it comes to digital assets. Being explicit about who, what, where, and how much it’s worth in writing will give you the best chance at making sure your wishes will be followed after your death.
By planning ahead and being clear about all of your accounts you ensure that your spouse, executor, or guardian of your children can move forward to take care of your family’s needs in the event of your death.
Are you ready to start your will or trust? AZ Statewide Paralegal offers estate planning for you and your family. We have extensive information here about estate planning and you can learn more about our will and trust packages. Call us at (520) 327-4000 Tucson or (602) 253-1515 Phoenix if you have additional questions about the process.