So your estate plan carefully addresses disposing of your home, car and bank account. But what about your digital assets?
There are two different types of digital assets. One type is assets such as bank and investment accounts that you manage online which are really no different than accounts you manage with a paper trail. The biggest difference is how these accounts are accessed. The other type of digital assets are those that only exist digitally – iTunes, Shutterfly, Google.docs., etc.
There is real value in our digital assets. Think of the amount of time and money you’ve spent building your iTunes or Kindle library. A 2011 study by McAfee, Inc. revealed that U.S. consumers placed an average value on their online presence at $55,000.00. And, of course, many people have gone paperless in managing financial accounts – bank accounts, investment and retirement accounts are frequently handled online. There is non-monetary value associated with our digital assets too. What about the volumes of information and photos on Facebook?
Many people have both types of digital assets and should consider addressing both in an estate plan. As is typical, laws lag behind reality. There is very little activity in the Wisconsin legislature or the courts regarding disposition of the ever-growing area of digital assets. Despite the legislative void, you can, nevertheless, take steps to provide for your digital assets at your death or incapacity.
The first step is to make an inventory of your digital assets and determine what is important enough to address in estate planning. This would, of course, include bank and investment accounts, but you may not care if your Pinterest account dies with you. With this inventory, you should include usernames, passwords, PIN’s, security questions (and answers) – whatever a personal representative or other fiduciary might need to access the digital asset. This inventory could simply be kept on a piece of paper with your estate planning documents. There is also a growing availability of online services that purport to safely store all information regarding online accounts in one place. So although you have wisely used a different password for every online account you have, your personal representative only needs the one username and password to access the online password storage service.
The second step is to review the online accounts to determine if the service itself has provisions or even requirements for dealing with the account at the holder’s death or incapacity. For example, Google introduced a service in April called “Inactive Account Manager.” This feature allows a user to designate up to ten people to be notified (after notice to the account holder) when a Google account remains inactive after a certain period of time, and what happens to data stored through Google. Many websites also include provisions for inactive accounts in the Terms of Service (TOS) language. You may have unwittingly agreed to such provisions by clicking “I Agree” when you signed up for the online service.
One current Wisconsin statute allows a person to leave a “separate writing” for tangible assets. This is typically used to leave a sentimental tangible item to a specific person, without committing to the bequest in a will. For example, a person might leave a piece of heirloom jewelry or specific artwork to a particular child. Separate writings may be easily changed from time to time, without the more tedious process of modifying a will or trust.
Although digital assets are not exactly tangible assets (you can’t pick up and move an iTunes library), a separate writing to document and dispose of digital assets may be a viable option. And like the separate writing for tangible personal property, a separate writing should be kept with your will. But note that such a separate writing is only as good as you UPDATE it. Online services often require you to change your password – this also requires an update to a separate writing.
At the very least, it is advisable to incorporate some type of mechanism in your estate plan for informing your personal representative (or executor), trustee and agent of your digital assets. The bottom line is that estate planning requires a person to get their financial house and Internet house in order.