Preserve and Protect: Assets Traditionally Not Considered in Estate Plans
We acquire an ever-growing and diverse collection of assets during our lifetime.
To preserve and protect them, an estate plan is typically created with the counsel of an estate planning attorney. It preserves our wishes, and grants certain people power and authority to handle our affairs when we are not capable or upon death.
However, estate plans, whether simple or complex, traditionally consider only our hard tangible assets. Recently, a new class of assets of ever-growing importance has arisen not traditionally considered in estate plans: digital assets.
Valuable for Loved Ones
We have all created or acquired digital assets and an electronic digital identity consisting of far more than the electronic accounts we access online to manage our digital photo albums or social network profiles. Our digital assets include the information necessary to access the financial assets and accounts we routinely manage on our personal computers or smartphones. Everything from our savings and checking accounts, stock trading accounts, medical information, credit card payments and even our gas and electric bills are accessed and managed online via a litany of profile names, online passwords and "secret" security questions.
Digital assets increasingly mimic traditional "hard" assets. PayPal and Bitcoin accounts are often worth thousands of dollars and access to website domains and email accounts are crucial to many businesses. Valuable digital assets also include information stored in secure electronic "dropbox" folders, frequent flyer airline miles, hotel reward points, electronic music, and video and audiobook collections maintained on digital accounts and devices.
Preserve and Protect
It is important to consider how your heirs will access the assets you store digitally and the manner in which the executor of your estate or agent named in a power of attorney document will manage the affairs conducted electronically.
Some practical questions to consider: Will your spouse have the information necessary to access an electronic joint checking account upon your death? Will the executor be able to manage online payment of bills and expenses? What happens to pictures uploaded to an electronic picture album? Will social media accounts be deleted or maintained after your death?
Digital assets create questions and scenarios unforeseen by estate planners. Access to the websites where we store digital assets are governed by ever-changing "terms and conditions," and users are typically granted restricted and limited licenses that are nontransferable or terminate at death.
It is important to establish procedures granting access and preserving the information necessary to manage your online accounts with your attorney. Specify the power of both your executor and agent under your power of attorney document to access and manage your online and digital affairs. Safely and securely store and actively maintain a separate list of online passwords and account information. Today, there are services whereby an online database of your passwords and login information is maintained and released to beneficiaries upon death.
Most importantly, the next time you speak with an estate planning attorney, take time to plan and consider your "digital" assets and electronic identity - valuable and important, but easily overlooked as you plan your affairs.