estate planning and digital assets: protecting assets outside of the norm
TRANSCRIPT
ESTATE PLANNING AND DIGITAL ASSETS:
Protecting Assets Outside of the Norm
Larry Deason and Shawn Garner Estate Planning and Elder Law Attorneys in Yuma Arizona
Copyright 2013. Deason Garner Law Firm 2
Recently estate planning has had to add in a new category: digital assets.
No one is really sure where to place digital assets at this time, but
everyone knows that these are becoming just as valuable as a person’s
traditional personal property.
For decades assets fell into two categories: real property and personal property. Personal
property can also be divided into its own set of subcategories that includes tangible and
intangible assets. Tangible assets are those that you can hold or see physically, while intangible
assets are those that are not seen – such as a bank account’s funds. Recently estate planning
has had to add in a new category: digital assets. No one is really sure where to place digital
assets at this time, but everyone knows that these are becoming just as valuable as a person’s
traditional personal property. While some estate planning professionals consider digital assets
a form of intangible assets, others say it is a form of intellectual property. Regardless of where
it is classified, planning for these assets is imperative.
WHAT ARE DIGITAL ASSETS?
A digital asset is any asset you own
that is online or stored on a computer.
It isn’t physical, but it is a real file,
folder or other cloud-stored item. It
also includes all online accounts
including email, photo sharing sites,
social media accounts, online
document storage accounts, blogs,
online banking, investment accounts,
web hosting accounts, etc. Basically, if
it is online or stored on a hard drive, it
is considered a digital asset. Even
online gaming accounts have been classified into this category – such as a World of Warcraft
account. You can have these files stored at home or in your office computers. Even though your
digital asset doesn’t have an exact value, it still is an asset that belongs in your estate.
Therefore, when you’re drafting an estate plan, your digital assets should be included.
WHY INCLUDE YOUR DIGITAL ASSETS?
There are a lot of reasons individuals include digital assets within their estate plans, but the
more common reasons include:
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Making it Easier for Executors or Loved Ones
Most people have multiple user names and passwords associated with their online accounts.
When it comes time for an executor to find these, they need to get access to them, which
means having a detailed list of these accounts and their credentials. Sorting through your
online life can be a daunting task for your loved ones or your estate executor; therefore, estate
planning can help lighten the load and make the task less burdensome.
There are varying laws about digital assets, which makes it difficult for your executors. If they
don’t have access through your estate plan, they may never gain access to your online
accounts due to legal limitations.
Preventing Identity Theft
Identity theft among the deceased is
increasing every day. Not only do your
executor and loved ones need access to
online accounts to close them as part of your
estate settlement, but they need access so
that they can help protect your identity after
your death. Criminals are able to create credit
card accounts, access online bank accounts and even apply for jobs under your name – even if
you’re deceased. By giving your executor or loved ones access to your online accounts, they
can make sure they’re shut down and not left on the internet for hackers to find and retrieve.
Preventing Losses
There are some digital assets that can hold monetary or sentimental value, but if they remain
undiscovered they can lose that value. For example, an author who has a completed
manuscript on his computer but dies before he can give it to his publisher. This manuscript
could create a book that generates proceeds for the estate, but without access to that
manuscript, it is a lost asset.
Also, the executor needs access to online bill pay accounts, insurance accounts, etc. so that he
or she can cancel subscriptions, accounts and memberships before their dues are required. If
you pass away, but your executor doesn’t know about your half dozen online subscriptions,
your estate will have to pay those bills and work it into the estate settlement – which could
cost one of your beneficiaries their inheritance.
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Keeping Your Story Alive
You don’t have to be an author to have a story. Most individuals have blogs or online social
media accounts that tell a lot about them and how they lived their lives. These personal stories
are meaningful to family members and friends. By giving access to these accounts, your story
can continue to move forward and it can be shared – rather than forgotten.
DECEASED USER POLICIES FOR COMMON DIGITAL ASSETS
There are online account user polices, but not all of these address what happens if you pass
away. Consider reading through your online policy to see if there are any rules or regulations
regarding your passing and how executors can access your account. If an executor doesn’t have
your credentials to log-in on his or her own, they’ll need access granted by the site’s host
instead. Currently these online providers require a court order or other legal interaction to
grant an executor access to an account without the password or username:
Facebook – Social Media
Hotmail – Email
Gmail – Email and Document Storage
LinkedIn – Social Media
Yahoo Mail – Email
MySpace – Social Media
Twitter – Social Media
HOW TO PROTECT DIGITAL ASSETS
There are two ways to protect your digital assets: in a will or through a trust. You can place
your information in your will, but there is one thing to consider: if you only use a will, your
estate will go through probate. That means your estate will be public knowledge and your user
accounts will be part of that public knowledge. Instead of outright publishing your digital
assets and their information in your will, you can name an executor to manage these assets
and reference a separate document that can be accessed only by the executor; thus, leaving
your credentials out of the public eye.
A trust may be a better way to protect your digital assets. When you use a trust, information
placed in the trust is not open to the public. This is especially important for digital assets that
are worth monetary amounts. Your trusts’ owner will manage the digital assets.
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PREPARING YOUR DIGITAL ASSETS
While the law is still working to catch up on how to protect or even catalog digital assets, you
can start protecting your digital accounts and online life. Preparing your digital assets does take
some time, but once it’s complete your estate planning attorney can help work it into your
estate plan so that they are protected.
INVENTORY
The first step is to inventory all of your digital assets. This requires you to list every online
account or file on your computer that you consider a digital asset. While it’s hard to predict the
assets everyone will have, here are a few to consider:
Hardware – This can include your computer, laptop, screens, printers and other hardware items
that you use with your computer and networking. Don’t forget flash drives, CDs and DVDs – these
are considered hardware too.
Software – Any software you have (downloaded or not) should be inventoried. If you purchased it
or have user keys, this information should be inventoried too. Don’t forget tax preparation
software, Microsoft Office or similar software and even programs you use to create or share
photographs.
Files – You need to outline some of the files on your computer and online that mean something to
you. These could include videos, photographs, documents, spreadsheets, etc. They should be
outlined so your executor can locate them on your computer. If any files are password protected
you will need to list the passwords along with the file extension for your executor or loved ones.
Online Sites – Make an entire list of all of your online websites. This can include social networking
sites, email, blogs, websites you own, and online shopping accounts, online backup storage and
online forums or groups you belong to. Basically if you have an account online for something, you
should list it here. Include passwords and any security questions that are associated with the
account for your executor as well.
Online Accounts – If you have accounts online – such as bank accounts, investment accounts,
shopping accounts, etc. – you will need to list these. If they have your credit card information
saved, make a note so that your executor can identify these accounts and remove your credit card
information upon your death. This will help combat potential identity theft. Keep in mind your
executor won’t find these accounts unless you point it out – after all, these types of accounts rarely
leave a paper trail in your home.
Work Info – If you access sites or programs for work, write down this information for your loved
ones or your executor. You should include any passwords and information that needs to be
removed. Network passwords should also be provided. If you work for someone else, leave the
business contact information so that your executor can let them know to deactivate your accounts
and access.
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CREATE INSTRUCTIONS
After you have a detailed inventory, you need to leave instructions on how you want your
assets to be treated. For example, you have social media accounts. Will you want these
accounts to remain open? Turned into memorials? Or would you prefer they be closed out?
Each online account, saved file and digital asset should have instructions for the executor or
beneficiary receiving them so that they can honor your wishes with these digital assets.
Determine Beneficiaries
You don’t have to leave all of your digital assets to one party – you can spread them around.
Decide who will inherit what. Some couples will leave documents, photos and videos to their
spouses. Some parents will leave photographs and social media to their children or
grandchildren. Who receives your digital assets is up to you, but you will need to specify who is
receiving them. Make sure to provide passwords and security questions/answers to all
beneficiaries so that they can access these accounts.
Do Not Delete
You may want to add in a “Do not delete” in your instructions. This ensures that your
beneficiaries do not delete or destroy accounts or files that you wanted to remain intact after
your death.
GETTING ASSISTANCE
Digital asset protection is a new realm of estate planning that should be handled by an
attorney. Most DIY estate plans don’t even address digital assets and if they do, they’re
incomplete. An estate attorney can help you designate who receives your digital assets and
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ensure your online assets are just as preserved as your real-world assets.
CONCLUSION
While you may not think much about your social media account or online storage, these
accounts can wreak havoc on a well thought out estate plan. You can protect your estate and
your assets by planning not only for your real world assets, but for your digital assets too.
About the Authors
Larry Deason and his staff have been providing quality legal services for clients since 1971.
Their mission is to assist people who are concerned about protecting their families from the
devastating legal and financial impacts of disability, death, and taxes.
Because he believes in the importance of an informed public, Deason spends considerable
time educating consumers about Estate Planning issues. He writes a monthly Estate
Planning column in The Sun, and he regularly conducts seminars on various Estate
Planning topics.
Deason and his staff believe that in many instances Living Trusts offer clients a proven and
powerful tool for protecting their families from the expense and delay of probate, as well as
a strategy for eliminating or minimizing federal taxes.
Deason’s firm is staffed with paralegals and consultants who are experienced and trained in
a variety of Estate Planning areas. The aim of each member of the firm is to help clients
accomplish their Estate Planning goals while taking the mystery out of the whole process.
We take pride in knowing that our clients feel “peace of mind” once the planning process is
completed.
In 2008, Mr. Garner began practicing law in Yuma in the fields of commercial litigation and
bankruptcy. In 2011, Mr. Garner switched his field of practice to exclusively estate planning
because he found it more rewarding to help people avoid the costs and stresses associated
with litigation more than trying to resolve disputes through litigation and court intervention.
Larry Deason
Shawn Garner
Deason Garner Law Firm 242 West 28th Street, Suite A
Yuma, AZ 85364 Phone: (928) 783-4575
www.DeasonGarnerLaw.com