Estate Planning for Digital Assets
Prior to the explosion in popularity of the internet, personal property was fairly easy to define. Things you can see, touch or hold, like artwork, collectibles, and jewelry, are clearly personal property. But what about domain names or social media accounts? Are they personal property? Intellectual property? Intangible property? Not property at all? Whatever type of property digital assets are classified as, the fact is that such assets may represent a good portion of a person’s estate that needs to be planned for. The average perceived value of digital assets for a person living in the United States is $54,722. There are several different categories of digital assets and planning techniques can differ depending on the type of digital asset we are talking about.
Personal digital assets are those stored on a computer, smart phone, or other digital device, and/or uploaded onto a web site or on a cloud storage account. These assets include photographs, videos, emails, texts, documents, music playlists, and digital books, to name a few. Social media digital assets are those accounts such as Facebook, LinkedIn, Twitter, YouTube, Instagram, TikTok, etc. Financial digital assets include accounts with Amazon, e-Bay, PayPal and all online bill paying. Business digital assets consist of information collected about customers, such as billing and shipping addresses, credit card data, and bank account information. Domain names or Blogs are another category of digital assets that can be valuable. Loyalty program benefits, such as frequent flier miles and cash back rewards are also examples of valuable digital assets that can be accumulated and left behind without being used.
Why is planning for digital assets so important? First of all, if you are the type of person that has different usernames and passwords for every digital account (as you should), this can be a nightmare for your Executors or family members. Your loved ones might want access to your emails or texts to learn about your final days. If you are someone who banks and pays bills entirely online, your Executor will not know where your financial assets are or what bills to pay without some advanced planning. Another reason to plan for digital assets is to prevent identify theft and financial losses to the estate. Financial losses to the estate may arise because of unpaid bills and the resulting cancellation of things like insurance policies, or because of lapsed registration of domain names, which can be quite valuable. Encrypted files, such as those that may be kept by novelists or composers, can cause quite a loss if they are unable to be decrypted. Another reason to plan for digital assets to avoid losing the deceased’s personal story. As someone who keeps a photographic record almost entirely on Facebook of family memories, this one hit pretty close to home for me. On the flip side, you may not want something in your digital world to be discovered by your loved ones.
What can you do to plan for digital assets? First, take advantage of online tools offered by service providers. The online tool with respect to a particular service provider is a service that allows the user to provide directions for disclosure or nondisclosure of digital assets to a third person. Unfortunately, as of right now, the only two major providers with online tools are Facebook and Google. Second, turn digital assets into something tangible by saving them onto a CD, DVD, portable hard drive, or flash drive, any of which can then be stored in a safe location. Third, prepare an inventory of your digital estate, including websites, usernames, passwords, secret questions, etc., but be very careful in how this information is stored. Fourth, you can provide immediate access to digital assets through websites like Flickr, GoogleDocs, DropBox, Shutterfly, and create a family YouTube channel. Fifth, you could authorize an agent under a power of attorney to access your digital assets, but the power of attorney must specifically provide that the agent has access to the content of electronic communications. Finally, you can address the transfer of digital assets and access by your Executor or Trustee in your Will or Trust.
For more information concerning this topic, please join us for a free webinar on November 18, 2020 at 10:00 AM. Click here to register.
 Beyer, G.W. and Nipp, K. G., (2020, September 25). Cyber Estate Planning and Administration. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2166422.
Ask Dan: Social Media & Animals
Hook Law Center: Dan, I’m wondering, where do cute animals “trend” on Instagram?
Dan: That is a good question. Twitter was the first platform to officially adopt the hashtag in 2009, meaning that any tag starting with “#” became automatically hyperlinked. It was not long before most of the other networks, like Instagram, added support for hashtags on their platforms. Now, popularity is measured by the most trending hashtags on social media. So, where do cute animals stand? Well, considering someone’s cat shows up as the second picture under a search for the number one hashtag, #love, I would say that cute animals trend pretty high!