Estate Planning for Digital Assets in a Digital World

We live in an increasingly on-line world. More and more, we are conducting a good part of our business and personal lives electronically, through the use of on-line accounts. This presents an estate planning dilemma. If you have on-line accounts or other digital assets but have not planned for the disposition of those assets and accounts after your death, your estate planning is not complete.

What are Digital Assets?

Digital assets are intangible informational assets that exist entirely in digital media and not in any paper form. Examples are on-line bank accounts, stock accounts, and financial records, e-mail accounts, pictures and video storage sites, social networking sites, domain names, professional sites, address books, client lists, and backups. Moreover, digital assets go beyond on-line accounts to include personal computers, work computers, and their hardware and software. Trust and estate lawyers are increasingly helping to plan for the care of digital assets upon their clients’ incapacity or death, providing advice concerning the disposition of the assets themselves after death.

The Actual Planning for Digital Assets

Two separate issues are involved in digital asset estate planning: ownership of the underlying asset and disposition of the on-line asset after death. With regard to ownership of the asset, it is advisable that clients develop an inventory of these assets, including a list of how and where they are held, along with usernames, passwords, and answers to security questions.

With regard designation of who is to receive the asset upon death, there are different options, including using wills and trusts, or even separate documents. Because of the limitations which exist in incorporating your digital assets into a Will or a Trust, the better practice is to utilize a separate document which addresses only your on-line assets.

This separate list should designate all on-line accounts, usernames, passwords, URL’s, domain names, security questions and answers, whether the accounts have monetary value, and any special instructions. You should designate which assets should be deleted versus which ones should be passed on to family members or others. This list should be given to your Personal Representative, if one has been designated in a will, or kept in a safe deposit box or a fire-proof safe at home. Tell a trusted family member, Personal Representative, or attorney the location of this separate list. The list can then be found upon your death and used by the executor or personal representative to access and pass on the assets.

If you would like more information regarding Wills, Trusts, or estate planning for digital assets, please contact one of our estate planning attorneys.