Part III: This post is about digital assets after you have passed away. What happens with your digital assets? This question is simpler to explain (notice I did not use the term “answer”) in the decedent estate administration context, but the answer is a lawyerlike response of “it depends.”
If you would like to view a fun infographic blog post, check out Linda Rosenthal’s post about digital estate planning here. Okay, let’s start with the basics.
- What is Digital Property?
Any online account you may own or any file that is storedon your computer, another device or in the cloud.
2. What might an estate planning attorney want to advise a client about digital assets in the EP context?
Many of us who practice law in this area use a “letter of instruction” as an organizational tool to help a personal representative do their job. It is not a legal document but rather an organizational document designed to help make the job of the personal representative (PR) easier. Many people have experience with trying to locate assets, insurance policies, investment accounts, etc., that are nowhere to be found after a person dies. This is what the letter of instruction is designed to flesh out. Many people assume that if they have a will or a trust, that this document alone will suffice to guide them to assets. This is not necessarily so and is often not the case at all. The will names the PR and describes the assets and property of the person who wrote the will and usually dictates the method of distribution of the property, but often a will or a trust will usually not give a PR any indication as to the identityor nature of many of the assets, how they can be located and accessed, along with other important details.
There are several services online to put into place if you want to make arrangements via persons other than those whom you have selected as your agent or personal representative. I think it is crucial that a letter of instruction contain a digital access as well as digital assets listing so that the agent, PR or survivors can identify the “known universe.” How is that universe constellated? Look to Kipling’s six serving men to assist here: what, why, and when, and how, where and who.
- Computer storage of information (hard drive or cloud-based)
- Email accounts, usernames and passwords
- Online Banking information
- web domains and the like (internet real estate)
- intellectual property (e.g., blogs, pictures, etc.)
For better or worse, digital assets that have value can be transferred or disposed of relatively easily via a will or trust. Management of those assets is another story. How can estate planners stay on top of the ever-changing landscape?! How about a special digital asset trust? You certainly don’t want the private information contained in your will. I just probated a will where I had to redact the testator’s SSN. The trust’s ownership of the assets will survive the death of a testator, and (in states outside Colorado where estates are public record) remain private. Trusts can be amended relatively easily, and a special successor trustee (like a digital asset management company) may be named to manage the assets. This is just one idea to consider among several alternatives.
3. What are some of the difficulties to consider when devising an estate plan which includes digital assets?
Most states do not have any law that applies particularly to digital assets in the probate context. In our legal system case law can develop in new areas of the law but a preferable means of a cogent legal response to this ever-changing landscape would be to devise a new “regime” for such assets by including them in each state’s probate laws. There is of course a difficulty of the variety of each state’s probate laws, and this mobility is relevant in our mobile American culture. This effort, a uniform state law regarding digital assets, is what the Uniform Law Commissioners (ULC) is engaged in presently. In the meantime however, we must consider the lack of clearly applicable law, the uncertainty of existing law, the prevention of identity theft for online activities all in the context of taking steps to make sure that a person’s wishes relating to digital assets are carried out in the way intended. This area is a natural place for the ULC to get involved, as the need for uniformity across state lines, along with the consideration of applicable federal laws regarding the internet requires a considered approach. In the durable power of attorney context, the issues are much more challenging than in the decedent estate context.
4. Fiduciary Access to Digital Assets
There are important distinctions between fiduciary management of digital assets when a person is alive and the management of those same assets after a person has passed away. The situation appears to be much more problematic as they concern management of assets while a person is alive and perhaps incapacitated. The situation is clearer and a bit more manageable as it concerns decedents’ estates. I previously wrote a blogpost about social media and mourning, here’s an article about a new feature on Facebook that allows people to memorialize, pay tribute to and otherwise grieve on Facebook.
I will have another post on this topic before year’s end – updating our digital accounts and assets should be on everyone’s year-end to do list!
©Barbara Cashman 2013 www.DenverElderLaw.org