As you consider what you will pass on to your heirs and other beneficiaries, do not overlook your digital assets. If your virtual property – anything from digital music you’ve bought to website content, Bitcoin or other cryptocurrencies – has value, then proper estate planning can ensure you’ve designated what happens to it when you’re gone.
There is value to your digital assets, including the sentimental value of items like digitized photos and family recipes that loved ones may not have copies of. Estate planning for digital assets can help prevent online identity theft and continued charges for services that your estate could be required to pay.
At Brady Cobin Law Group, PLLC, our respected Cary estate planning attorneys can help you ensure proper access to and distribution of your digital assets when you become unable to speak for yourself. Contact us for an appointment and, in the meantime, consider some of the digital asset planning issues we discuss below.
What are Digital Assets in a Will or Trust?
The concept of digital assets is relatively new. The idea of planning for death puts people off, so estate planning for digital assets tends to be neglected. But any digital property that has value and that you own is an asset you can pass on.
Your digital assets may include just about anything in or on e-mail accounts, social networking sites, picture and video storage sites, games and related sites, professional sites, personal or work computers and their hardware and software, phone and other mobile devices, cloud accounts, and backup drives or devices.
Not all digital assets are transferrable. In general, digital files that you own and that have a monetary or tangible value can be transferred as part of a will or another legal conveyance. Digital assets that you have licensed, like software, may or may not be transferrable, depending upon the licensing agreement.
The terms of service may specify what happens after the death of the account owner. Most stipulate that the rights to the online asset are nontransferable. Generally, you don’t actually own the digital music and books on your computer and mobile devices. You’ve only bought licenses to listen to and view those products.
Among the more likely digital assets to be transferred to a beneficiary are:
- Music, video and audio recordings you have made
- Money in a PayPal or similar account
- Money or merchandise owed to you by an online store such as Amazon or Etsy
- Rewards, such as frequent-flier miles, credit card points, retailer loyalty programs
- Bitcoin or other virtual currency.
Blog, website and online business content may be of value and transferrable, too. However, domain names are licensed, and their transfer would be subject to the terms of agreement. If a blog or website is used as a business that should be continued by your heirs or dissolved after your death, then we can help with business succession planning, including advantageous tax planning.
Email and social media companies typically close or deactivate accounts when they learn of a death. Facebook allows you to designate someone to handle your account upon your death and provides an option to delete it or place it in a memorial status.
Subscription services such as Netflix and Spotify should be properly closed upon your death so additional charges against your estate do not accrue.
Steps to Begin Estate Planning for Digital Assets
Because digital assets are not tangible, there is a greater need to advise loved ones of their existence and how to find them once you are gone. Start planning for disposition of your digital assets by making four lists:
- Devices containing your digital assets: computers, phones, iPads, iPods, Kindles and digital storage devices
- Passwords for devices and accounts. Include answers to security questions and any other two-factor identification that may be required
- Online subscriptions to cancel
- Specific digital assets, where to find them and what you want done with them.
Next, designate someone to handle your online accounts. With the help of an estate planning attorney, prepare documents that give a personal agent or representative the authority to access your online accounts in the event of your death or incapacity. This could be a digital asset authorization and consent form, durable powers of attorney, or trustee authority over your estate.
If you already have an executor of your will, a successor trustee to a revocable trust or another designee, he or she may be the proper person to entrust with closing and/or retrieving assets from online accounts, as well.
There may be accounts, images or documents that certain individuals should not be made aware of, even after you are gone. If so, consider the proper person to handle these and, if necessary, establish separate documents to enable, authorize and instruct them to discreetly dispose of these assets according to your wishes.
You may think that a letter left behind could take care of this, but the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) governs access to a person’s online accounts when the account owner dies or loses the ability to manage the account. It provides rights to a fiduciary (such as the executor of the decedent’s estate) while imposing the duty to act in the other person’s best interest. It also provides legal protections for the custodians of digital assets, the businesses that make, store, or provide digital assets.
Under the RUFADAA, the fiduciary can legally access digital assets like computer files, websites, and virtual currency, but must have explicit permission in a will or power of attorney to access email, texts, social media and other communications.
In addition to proper documentation of your representative’s rights plus instructions about where to find the digital assets, you need to designate how and/or to whom your digital assets are distributed as a part of your will.
Conversely, if you don’t want anyone accessing your digital assets when you die or become incapacitated, we can discuss ways to protect your privacy.
Contact Brady Cobin About Digital Assets Estate Planning
An experienced estate planning attorney with the Brady Cobin Law Group can sit down with you to help you plan for proper access to and disposal of your digital assets. Proper digital asset estate planning ensures your wishes are followed and protects your estate financially when you are gone or incapacitated.
Contact the Brady Cobin Law Group today to protect your future.