The desire to leave a legacy when you depart this world has always been the reason to do estate planning. Until now, that’s been enough. But in today’s world of technology, few people are considering what to do with their digital assets—Facebook accounts, Twitter accounts, your business website, online banking. What happens to those when you die? That’s why a new form of estate planning is on the rise—Digital Estate Planning.
You may not think digital assets are worth much. But consider small businesses that generate most of their revenue from online sales. That digital asset is worth a lot. If the business owner dies their spouse can’t get into the account.
The problem comes from a contract you agreed to but didn’t read. All digital accounts are governed by the terms of service agreement, you know, that long thing you scrolled through when you opened the account because it was so long and you just clicked “agree” at the bottom of the page. The agreements usually say the accounts are non-transferrable assets and you can’t leave them to your heirs by traditional wills or trusts. The password is protected even from the executor of your will or the trustee of your trust, unless you plan ahead.
All 50 states now have laws that allow you to name a digital assets fiduciary, giving them authority to gain access to your digital assets as dictated in your will, trust or power of attorney. If you clearly list your wishes for the way you want those digital assets distributed, those wishes supersede the terms of service provisions of each digital asset account. There is a process to follow.
Inventory all digital assets. Put them into categories such as communication (email, contacts); rewards programs (hotels, airlines, restaurants; shopping (Amazon, Ebay, any online shopping); online data storage sites (iCloud and other cloud-based back-up sites); finances (online payments, banking or investment accounts, Bitcoin); social media (Twitter, Instagram, LinkedIn, Facebook, SnapChat); gaming sites; and fantasy leagues (especially if there is real money involved).
List your wishes. What do you want done with your social media accounts? Memorialized; shut down? Who gets airline points or bonus dollars at department stores? Who has access to emails, texts, and social media sites, and what should they do with them? Where do pictures go?
Consider using a service that generates secure passwords and stores the passwords for every digital asset site. Then give your digital fiduciary the master password to that service. That keeps passwords out of your will, which becomes public record when you die.
You can take back control of your digital assets, but you have to take action. Update your will. Name a digital assets fiduciary and insert into your will a detailed wish list of how you want those digital assets distributed. Doing it now can save a lot of emotional pain and suffering later.