When we think about estate planning, we often think about property and health care. But in the modern world, a third domain of planning has emerged: digital asset estate planning.
Digital assets include documents, videos, and photos stored on one’s computer or online “in the cloud”; digital rights to content such as movies and music; social media profiles and data; email account access and data; and more. In many cases digital assets are personal, private, sensitive, and/or sentimental. In some cases, digital assets are valuable. For example, a popular social media profile has a significant financial value due to potential or actual advertising revenue.
Some companies have already rolled out tools for digital asset advanced planning. For example, Google allows users to designate another person (technically, another email account) to be granted access to the account after a designated period of inactivity (the presumption being that you must have died or become incapacitated).
Such tools are useful, but they are limited in scope. The next time that you review your estate plan, consider the following planning techniques:
- Update Power of Attorney documents (if any) to specifically address digital assets and accounts in a way that fits your wishes.
- Help your personal representative tend to your digital affairs by maintaining an up-to-date inventory of important digital assets. This inventory should be located with your side letter of instruction and might include:
- the name of the asset;
- any username, password, PIN, security questions and answers, and/or two-factor authentication information; and
- a note specifying what you want done with the asset on your behalf (e.g., pay the bills and closed account, or delete the account, or copy the photos and distribute to specific persons).
- Note that “Password Managers” such as LastPass and Dashlane can be useful and relatively secure repositories for much of this information.
- If digital assets are quite valuable or otherwise significant, consider assigning ownership of your digital assets to a special “digital asset trust” – see Beyer & Cahn, When You Pass on, Don't Leave the Passwords Behind: Planning for Digital Assets, American Bar Association Probate and Property Magazine, Vol. 26 No. 1.
If you have questions or concerns regarding digital asset planning, please let us know at your next appointment!
Hurlow Wealth Management