Digital Assets in Your Estate Plan: Part One
Most of us can’t remember what life was like before home computers and cell phones. Digital technology has made our lives easier by providing a way for us to keep in touch, pay bills, manage subscriptions, store photos, and more. As we have adjusted to technology becoming an inextricable part of our daily lives, it has accumulated and for most people, become an often-forgotten asset that is part of our estate.
What Is a Digital Asset?
Digital assets include anything that can be stored electronically on a computer or other digital device and are associated with ownership or use rights. The owner has the right to use and access that technology with usernames and passwords protecting it from intrusion by others. This protective layer helps to safeguard your assets on the one hand, while causing headache or heartache for loved ones who want access at your death or incapacity, on the other.
Financial value assets include cryptocurrency like Bitcoin, online payment accounts like Venmo, loyalty program benefits like frequent flyer miles or credit card reward points, domain names, websites and blogs, as well as other intellectual property like photos, videos, music, and writing that generate royalties. NFTs are a newer concept that can represent various properties, including artworks, collectibles, virtual reality and gaming items, domain names, and ownership records. All these types of assets could have financial worth for your loved ones, not only in the immediate aftermath of your death or incapacity, but potentially for years to come.
Then there are assets with sentimental value that might include things like photos, video, music, social media accounts, and websites or blogs. Most of us routinely use our phones to take family photos on vacation or at school events and unlike a physical photo album, those images aren’t stored in a physical location in your home. Those images accumulate over time and before you know it, you've documented much of your life and those around you. It’s easy to forget that this digital media resource could be forgotten in your estate plan and ultimately lost forever if you don’t take steps to protect it.
Who Can Access It?
Until recently, the law was not very helpful in determining who could access these files and accounts if the user became incapacitated or died. Who had the legal right was not easy to figure out. If the decedent left no usernames and passwords, the estate representative or family member would have no way to access them. Even if an estate representative could log in, state and federal privacy laws typically prohibit such access so as a result, digital assets would linger on the internet or on devices long after the person's death, untouchable by family and friends. This hole in the law caused heartache and headache for families who wanted access to treasured family photos or other digital assets from their loved one's online accounts or libraries. And sadly, the loss of valuable items or information were the norm.
As you can see there is not one straightforward answer when it comes to leaving your digital assets to loved ones. Including detailed instructions in your estate plan is a crucial first step to ensure that your assets are not lost. Part Two of this article will provide useful ways to manage digital assets in your estate plan and pass down what you rightfully own and want your family to enjoy.
This article was written by Lynn Girvin of Lynn K. Girvin Law. We are here to help you make informed and empowered decisions for your life and the people you love. We offer comprehensive estate planning services and walk you through every step. Get started by calling our office today at (714) 619-4145 to schedule an appointment. We look forward to hearing from you!