Some assets don’t necessarily fit into our traditional approach to estate planning. We know how to account for bank accounts and real property. But hundreds of dollars’ worth of frequent flyer miles or credit card points? Not so much.
Whether they’re pictures on your social media profile, a PayPal account, a website domain that hosts a small online business, or a growing podcast you put out weekly, there’s an important question you should consider: “Can I pass this on to someone after I die?” And, the next question: “How can I do this?”
Whether their value is financial or merely sentimental, digital assets encompass a large territory. Essentially, your digital property is anything you accumulated during your lifetime that can be accessed through any electronic device.
Following is a brief list to help you figure out what you may possess as a digital asset:
Many states have already begun to address the legal issues surrounding access to someone’s digital assets after they pass, but it’s still in its infancy. With no legal precedent, it’s a complicated territory. As technology evolves at a faster pace, new modes of communication are continually being introduced and with them, their own set of complexities. Privacy laws are always at the top of these concerns.
Currently, almost all 50 states have adopted The Revised Uniform Fiduciary Access to Digital Assets Act (2015), or some revision of it. This act essentially gives an appointed fiduciary the right to manage a decedent’s digital assets under certain conditions. However, legislators still have a long way to go. People are amassing larger digital estates, and with them, the desire to protect these assets and pass them on to loved ones.
If you purchased a large CD or book collection and would like to pass it on to someone in your will, legally you can do this. However, if you own a large library of digital music or books you purchased and downloaded over the years from iTunes or Amazon, you have no legal right to pass it on to anyone – whether living or dead.
It’s all in the Terms of Service agreement (the one you probably clicked the agree button to but never read). Many assume that once these digital assets are paid for, they’re owned. Most likely, this isn’t the case. The license to use their product is strictly between you and the company. You cannot transfer it to anyone else at any time, even upon death. Once that happens, the contract expires. Think of it as leasing the content rather than buying it.
When you purchase music from Apple iTunes, you’re purchasing a non-transferable license to play that music rather than actual ownership of the music. Unlike a physical copy, this digital license is separate from the actual downloaded digital music file.
This is also true for Kindle eBooks from Amazon: the digital content for the kindle is “licensed, not sold, to you by the Content Provider,” so it is nontransferable. You can’t resell it, you can’t donate it, and you can’t leave it to an heir. It’s in the Terms of Service agreement.
Companies are serious about protecting their digital assets. If they discover a direct breach in this contract, they may subject the account to termination, prosecution and damages. This may not be something you want to pass on to others.
An idle account is a vulnerable account. Anything you possess digitally could easily fall prey to hackers who will assume your identity, sell your information, and engage in other unconscionable activities – which could be disturbing to your family members and friends. Whether or not this is something you’re concerned about is a personal decision.
Some providers account for death and have set up provisions for account holders to pass on these digital assets to a designated beneficiary. It’s always good to check if this feature is available with each of your online accounts.
For instance, Google allows you to designate someone to be contacted before any accounts are deactivated if there’s a prolonged period of inactivity, Google will first contact you via text and email. If there is no response, it will then contact your beneficiaries.
Other major social media and online services that have set up provisions for a decedent’s account include Facebook, Twitter, LinkedIn, Yahoo!, Pinterest, Instagram, and Microsoft. Be sure to check what these guidelines are so you can set your account up accordingly.
However, when it comes to your physical devices such as computers, laptops, tablets, and smartphones, you may not be as lucky. Many brands are unwilling to grant access to anyone but the owner, so you’re better off leaving passwords to a loved one or backing up your data and documents to another known account.
If you have designated a digital trustee to oversee your online accounts after you pass, it’s imperative you keep your list of usernames and passwords up to date and their current location. This can be difficult considering most people can hardly remember all their changing passwords.
To make it an easier process, there are service providers who will give you access to a digital safety deposit box to store your usernames and passwords for a fee. Upon your death, they will release these details to your designated beneficiary who can then access your digital information and property. But, again, this information must be kept current.