Many of us have prepared our will or trust to distribute our assets when we die. But what happens if your personal representative cannot find or access your assets? This is what often occurs regarding your digital assets.
So, what are digital assets. Digital assets are defined as any electronic record in which an individual has a right or interest. But it does not include an underlying asset or liability unless the asset or liability is itself an electronic record. So, this includes things like your online bank, investment, shopping, gaming and social media user accounts. The basic idea is to knit these digital assets in with the rest of your estate plan. Who should get the data? And more importantly, are there things we don’t want others to have?
Many digital assets have little or no financial value. But there can be significant value if you know what to look for. An obvious example of a valuable digital asset would be a manuscript on the computer of a best-selling author. But domain names and advertising from web pages and blogs may also have financial value. Downloaded assets such as digital music and book libraries may be worth something, too. And even if they don’t have monetary value, digital assets may have sentimental worth.
The first big hurdles for a personal representative in dealing with digital assets can often be simply identifying the assets and then gaining access to them. Unless the owner of those assets has left specific guidance about the existence and whereabouts of the digital assets, the deceased or disabled individual’s fiduciaries may not even be aware of their existence. Additionally, those digital assets may not only be password-protected or encrypted, but they may also be covered by data-privacy laws or criminal laws regarding unauthorized access to computer systems and private data. Fiduciaries may be able to unearth passwords and gain access to their loved ones’ online accounts, but they may not be doing so legally.
The field of digital estate planning is also evolving rapidly, as are digital providers’ policies on what should happen to digital assets that are left behind. For example, Google and an increasing number of social media providers have created procedures, which allow you to name a trusted person who can gain access to your data once your accounts have been inactive for a certain period of time. Digital assets are also governed by a complex web of rapidly evolving laws, both at the state and federal levels.
So here are some things you might consider in your planning.
1) Identify your Digital Assets
Think about the following:
- What valuable items would you lose if your computer was lost or stolen today?
- If you were in an accident, would your loved ones be able to gain access to your valuable or significant digital information while you were incapacitated?
- If you were to die today, to what valuable or significant digital property would you like your loved ones to have access?
2) List Your Digital Assets and Critical Access Information
Make a list of your digital assets. For each asset, list the URL to locate the sign-in page for it, your username, the email associated with it, if any, your password, security question answers. As time allows, log on to your digital assets sites and note what information you had to possess in order to access the account.
You might also want to list all of your digital devices such as computers and smartphones, data-storage devices or media, domain names you own and where they are registered, and any intellectual property you possess in electronic format (like a book or paper you created).
Obviously, this list contains highly sensitive, confidential information. It needs to be backed up and you should probably have a hard copy of it, also. But be sure you protect it by storing it in a safe place. But if you protect it too well, again your personal representative may not be able to access it. So be sure you tell your personal representative (and any secondary representatives) how to access this list.
Finally, it is critical to keep this list updated. So, any hard copies may not be as up-to-date as your electronic list, but you should regularly replace the hard copy with an updated copy.
3) Back It Up
Be sure your Digital Asset list is backed up, just like all of your computer files. Having multiple back-ups is always good as long as they are secure. Use an external drive. Or better yet, use two. Keep one in a safe or safe deposit box. Keep the other connected to your computer for real-time backing up. Regularly swap the two disks so that the stored one is only a little behind. Add to this a cloud back-up with something like Carbonite, OneDrive, Google Drive or any number of similar cloud back-up services. Then even if a specific device malfunctions, storing digital assets on another storage device or in the cloud helps ensure the longevity of those assets.
Keeping your list current and letting your personal representative know how to access the list are critical factors in insuring your digital assets won’t be lost forever.