Online presence, be it through social media, e-mails, e-commerce website accounts etc., is an integral element of your personality today. Online presence essentially leads to the fact that each one of us has digital assets which should be included as assets while planning one’s estate. Question is, have you dealt with your digital assets through your estate planning documents in case something happens to you. My guess is no. Until recently, even lawyers didn’t think of digital assets as part of estate planning. Today’s online presence virtually demands that steps are undertaken to deal with digital assets in case of a person’s death or medical emergencies.
It can be a difficult task for estate trustees to manage and deal with digital assets of the deceased if the trustee is not aware of the accounts and passwords in order to access the assets. Online bank accounts, specially if the deceased had gone paperless and was receiving all bills online or Facebook or Twitter accounts, Apple iTunes or Netflix accounts or even the thousands of dollars in games and gaming accessories which people buy online and store online to play games are a few instances which would need to be addressed in case the owner dies or becomes physically or mentally incapable to deal with digital assets.
Typically, digital assets would include all electronic or digital “belongings” a person may have, such as emails, tweets, blogs, texts, digital photos and videos, songs, e-books, as well as all online accounts to access websites or programs including e-commerce, social media, blogs, photo-sharing accounts and domain names. There are also digital assets in the form of devices such as computers, tablets, smartphones, smartwatches, which can store any number or types of electronic files and content.
Digital assets would qualify as such if there exist the folowing three distinctive elements:
- a digital file or record,
- access to the file or record; and
- the right to use the file or record.
In order to deal with the digital assets all the above three elements must be addressed by the client and his or her lawyer to ensure that the executor will have all required information to access and administer the digital assets.
The biggest challenge in dealing with digital assets while planning your estate is the treatment of competing property rights which survive death and contractual rights which quite often do not survive death. The trustee may be left with a legal right to the files or accounts but the right to access that information is usually exclusive to the account holder and the estate trustee will have no such enforceable right since the access rights are limited to the user.
Estate planning documents should contain language providing express wishes of the testator granting the executor the power to access, control, delete and transfer digital assets. In other words, a will, continuing power of attorney or a trust document should clearly indicate the testators wishes with respect to how the digital assets should be handled after death or incapacity. To assist the executor in dealing with digital assets, one could prepare an inventory of digital assets including usernames and passwords to catalogue all digital assets and services. The inventory provides access to such information in a centralized location for the executor. The inventory listing all digital assets and passwords, however, should be a separate document than the will itself because a will can become public. It is important to maintain confidentiality over such a list and ensure it is stored in a secure location to avoid any misuse of the important information stored therein. Further, only the executor should be advised of it’s location. Moreover, the testator also has a task at hand to keep the list of its digital assets up-to-date. The purpose of the inventory is to inform the executor or estate trustee of what digital assets an individual owns and also the individual’s intentions with respect to how these assets are to be dealt with upon incapacity or death.
Digital information or assets, if not properly protected may lead to consequences anywhere from damage to an individual’s reputation to causing discord amongst surviving family and friends. More so, if the estate trustee is not able to quickly access and take control of digital assets, the biggest threat is that of misuse of online information including fraud or identity theft. Planning for the disposition of digital assets is recommended to minimize the risk to incapable persons, legal representatives, and beneficiaries. Administration of digital assets as part of the estate will continue to evolve as law in this field evolves and the methods of access, type of information, and value of the assets change over time. However, what is important is that testators ensure their planning and administration keeps pace with evolution and all assets of the testator are dealt with including digital assets.