Don’t Forget About Digital Assets in Your Estate Plan

For many of us, our primary means of communication is email. Some of us like to keep in touch with friends and family by sending “tweets” or updating our Facebook and LinkedIn accounts. We store family photos and other important information online, on a website or in the “Cloud.” We access our financial assets, such as bank accounts and brokerage accounts, over the Internet, and in some instances only receive online statements. We pay our bills electronically. We own Internet domain names. We conduct business online.

Despite this, when we talk about estate plan assets, many people only think of their homes and other real estate, money and physical personal property. But as we become more dependent on computers and the Internet, we also are acquiring, accessing and storing more and more electronic information online. In doing so, we are creating valuable digital assets that often can be passed on to our loved ones. But these assets only become part of our estate plans if we specifically include them.

What are digital assets? Digital assets include our email accounts, social media accounts like Facebook, Twitter and LinkedIn, electronic bank accounts and statements, credit card statements, photographs and music stored online. Collectively, our digital assets have tremendous aesthetic, emotional and financial value.

The online accounts we use every day are protected by passwords to protect our privacy and confidentiality. Often, when the account holder passes, no one has access to the passwords, or worse, no one even knows the account exists! Without the essential login information, obtaining access to these online accounts may require hiring a computer-forensics expert or obtaining a court order. Complicating matters is that accessing the deceased’s online account (even for a spouse, parent or child) may run afoul of terms of service agreements and federal anti-hacking laws.

If an estate fails to identify and collect all of one’s digital assets, it’s the decedent’s beneficiaries who suffer. According to the Wall Street Journal, there are currently $32.9 billion worth of unclaimed assets held in state treasuries across the country. As ownership of digital assets continues to expand, and we conduct more of our financial business online, the amount of unclaimed property will undoubtedly increase substantially.

There are some simple steps to take to prevent depriving your loved ones and estate of the benefit of your digital assets, regardless of value. The first step is to create an inventory of all digital assets, and store an updated list of passwords in a safe place. Once an inventory has been completed, you will then be in a position to make decisions about how to dispose of these digital assets upon death. An experienced estate plan attorney can assist you in drafting the appropriate language in your estate plan documents to ensure that your digital assets are identified and passed on according to your wishes. If you would like more information about incorporating digital assets into your estate plan, please contact me.

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