As more and more of our lives are conducted online, a discussion on estate planning for digital assets has become a subject of debate. The topic of digital assets and digital estate planning is an important one, and yet it’s one that is rarely addressed.
At a recent client and spouse meeting, we were discussing wills and estate planning. Due to the loss of a family member years before, the couple was well-versed on the importance of proper estate planning. Our discussions led us to planning not only for their tangible assets, but for digital ones as well. Like many others, this couple had the majority of their financial and personal information online. Here in 2015, digital
assets are not just something kids worry about anymore.
Research shows that even the older generations, particularly Baby Boomers, are spending more time online than ever before. Banking, video streaming, sharing photos online and posting to social media sites have become immensely popular pastimes. Much of the record of a life now is online. It is no wonder some clients want to preserve this history.
Knowing my clients, I knew that covering the topic of digital estate planning was important. I was able to leave them with a comprehensive document that outlined the meaning of digital assets and determined what was to be done with the online assets at death. This is important: You may have more digital assets than you know. Typical digital assets include social networking accounts (such as Facebook, LinkedIn, Twitter, etc.), websites, online account information from other websites and programs, videos (e.g. YouTube), photos, email and webmail, financial documents (such as banking, investment and utilities statements), online businesses (such as eBay, Etsy, Amazon etc.), and personal documents.
Turns out, the average person has a lot of this stuff today. A 2013 Digital Assets survey released by McAfee found that globally, the average person is storing over $35,000 worth of assets on their digital device. What is to be done with this stuff when you pass? We’re entering a time when it’s essential to consider the digital assets of the deceased.
As it stands right now, your digital legacy is at risk of extinction. Our society is creating and storing digital content without much thought to its longevity. Your estate executor should take into account some key considerations when dealing with your digital assets.
In order to safeguard your digital assets, a plan to handle these assets should be mandatory. Clients should appoint a digital executor to manage their online presence after death. For example, do you want your Facebook or LinkedIn account closed or left open as a lasting memorial of your life?
Consider the following four steps when making a plan for digital assets:
1. List all of your digital assets, including user names, account numbers and passwords. Store your list of passwords separately from the
account names to ensure that no link can be made in the event that the lists are stolen. Ask yourself what would be of value if your computer were lost or stolen?
2. Outline comprehensive directions on how you would like your digital assets to be managed post-mortem. Draft a specific clause in your will to give your executor the power to access, handle, distribute and dispose of your assets. Provide information on how to access and control your online accounts to facilitate the administration of this aspect of your estate.
3. Choose a digital executor. Where applicable, you could have a number of executors for your will. You may choose to have one person for your financial assets, one for your business assets and one for your intangible or digital assets.
4.Safeguard your information. Programs such as PasswordBox and My Vault act as a digital safety deposit box and allow you to safeguard your private data as well as manage your digital assets. You also can use these to store copies of important documents such as your will, power of attorney and birth certificate.
As more people spend more time online, the need for such clauses in a will are going to increase. To this point, the law hasn’t yet caught up to the advances in technology, especially in this area. But we live in a digital age, and our online presence continues to grow. It is imperative to consider digital assets. Think about what you might want preserved after you are gone. If you took all that time to preserve those family photos online, shouldn’t you take the time to make sure they last into the future and that the generations to follow can access those photos?
This is a slightly amended version of an article written by audit and advisory specialist Alan Wainer. It has been shortened to make it suitable for web publishing.