Digital Assets and Estate Planning

People often expect that an estate plan will provide for traditional assets like a home, jewelry, cash or bank accounts. Many people are unaware, however, of the extent of their digital assets created and used in daily life, as well as what happens to those digital assets upon death. More and more often, individuals rely on online accounts and own assets that may exist only on the Internet. These “digital assets” may include financial accounts, internet-based businesses, social media accounts, photographs, documents, and other digital files. Each of these assets may require a different username and password to access and manage.

What Are Digital Assets?
“Digital assets” consist of any:

• Internet-based account.
• Internet-based membership.
• File stored on a computer, cellular phone, personal digital assistant, memory device or other digital device, online or in the cloud.

Some categories and examples of digital assets include:

• Personal. Personal digital assets can be stored on a smart phone, computer, or online, and would include emails, calendars, photos, videos, music, medical records, contact lists, e-books and gaming assets. 
• Social media. Social media assets are used for social networking and microblogging as well as for storage of photos, videos, and other electronic files. Examples include accounts with providers such as Facebook, LinkedIn, and Twitter.
• Financial. Financial digital assets include online banking and bill paying accounts, as well as tax documents, PayPal accounts, and bitcoins.
• Business. Business digital assets include online stores with potential for revenue streams, such as small online retailers, Etsy accounts, and eBay accounts, as well as business-oriented social media. It also includes all data collected and stored by a business, such as client lists, client preferences, vendor information, shipping addresses or credit card data.
• Domain names or blogs. Domain names and blogs could be valuable, and passwords and other information necessary to renew them are vital. Blogs could also fall under personal digital assets or business digital assets, depending upon the nature of the blog.
• Loyalty program benefits. Loyalty program benefits include loyalty programs through credit cards, airlines, retail stores and restaurants.

Importance of Planning for Digital Assets
There are several reasons why it is important to plan for digital assets. Proper planning may:

• Make things easier on family members and fiduciaries.
• Prevent identity theft.
• Prevent losses to the estate.
• Avoid losing the client’s personal story.
• Prevent secrets from being revealed.

Although placing instructions in a power of attorney, will, trust or other freestanding document may not guarantee that your instructions will be followed, doing so would make it much more likely.  Make clear in a power of attorney, will, trust or other document whether you would like for your fiduciaries to have management authority over digital assets or whether you would like to specifically withhold such authority.


Options in Planning for Digital Assets

Power of Attorney
Instructions can be added to a financial power of attorney granting or withholding the authority to manage the online accounts and digital assets and access to the content of electronic communications. 

Will or Trust
Instructions should be added to a will or trust granting or withholding from the personal representative or trustee the authority to manage digital assets and have access to the content of electronic communications. In addition, the disposition of digital assets may be provided for in the will or trust, either adding them as a specific bequest or simply including them in the list of personal effects given to a spouse or children. Some digital assets may not be transferable upon death, but some may be, so wishes regarding disposition should be made clear just in case those wishes can be followed.

Grant Immediate Access
Some service providers, such as Shutterfly and DropBox, specifically allow multiple individuals to have access. If you are willing to allow others to have access to some assets now, check your service provider's terms of service for this option.