Digital Asset Planning

Posted By Steven M. Adler, Esq. || 20-May-2016

Given the breadth of digital assets it’s difficult to know where our survivors would start, other than that they would likely be overwhelmed. Further complicating these matters is the uncertainty of existing ownership and transferability laws that do not adequately address the category of property known as “digital assets.”

What are Digital Assets?

Digital assets are broadly defined to include any online account and any file stored on a person’s computer or server. Online accounts include social networking sites (e.g. Facebook, Twitter, LinkedIn), email accounts (e.g. Gmail, Hotmail, Yahoo!), online financial or brokerage accounts and online bank accounts (e.g. E-Trade, Fidelity), photo-sharing sites (e.g. Snapfish, Flicker), and blogs. This class of digital assets also includes online resources like eBay, Amazon, Yelp, PayPal, and domain names and URLs from sites like GoDaddy.com, or avatars on video games and virtual worlds such as World of Warcraft or Second Life. Digital Assets is also comprised of files that are stored on your personal computer, tablet, smartphone, or on a server through an online backup service. Such digital files can include your digital music, digital photographs, business documents, address books, personal journals, family recipes, and a whole host of other types of information that individuals want their heirs to eventually have. In short, any online account that is protected by a username and password and contains a user’s economically or sentimentally valuable content can be classified as a Digital Asset.

Furthermore, Professionals such as computer programmers, graphic or web designers, photographers, writers, musicians, and other artists may create “digital data” which becomes stored on a computer or a server that has substantial intellectual property and monetary value.

Basic Steps to Digital Estate Planning

To ensure that your digital assets are disposed according to your wishes, it is imperative that you engage in digital estate planning. Here’s how you can create a Digital Estate Plan in five (5) easy steps:

  1. Make a complete inventory of all of your digital assets including everything discussed above so that your Digital Executor will know exactly what assets you have in the digital world.
  2. Then assemble a list of all of your usernames and passwords and store it in a secure-but-accessible place. You can leave it with your attorney; store it on-line with a secure and shareable archive company such as Everplans; or simply lock it in a file cabinet or safe. You may even make two difference lists, one for usernames and a second for passwords, and keep them in two difference locations. No matter where you decide to store your digital estate plan, you'll want to be sure that the people who need to know where the plan is actually know where to find it and how to access it if it is password protected.
  3. Third, select a proper fiduciary. When considering who to name as your Digital Executor, think about the different types of digital assets you have. Are they mostly personal? Are they mostly financial? Are they mostly related to a business you own? Or are they all of the above? No matter the type of digital property you have, you'll want to consider the nature of the Executor's role to find the right person for the job. An ideal Digital Executor will be someone who is tech savvy, highly organized, detail-oriented, and committed to following your wishes as you've spelled them out in your digital estate plan.
  4. For each digital account or asset that you have, specify how you'd like your Digital Executor to handle that particular asset. For example, you may want some assets to be archived and saved, you may want others to be deleted or erased, while others should be transferred to particular family members, friends, or business colleagues. While you may name your Digital Executor in your will, you may want to keep your directions to your Digital Executor private. This can be as simple as writing things down, sealing it in an envelope and marking it “To Be Opened Upon My Death.” I suggest leaving this envelope along with your Will in a safe or with your attorney.
  5. Finally, it is imperative that update your schedule of digital asserts and their respective user names and passwords regularly.

Conclusion

Laws to handle digital assets are still emerging, but lawmakers and the courts will always lag behind technology, creating confusion and unnecessary expense for those trying to sort things out. In the meantime, digital-savvy individuals must take some basic steps to prepare an inventory of their digital accounts and assets, assemble a list of passwords, and give their executors proper information, instructions, and authority so that the estate administrator will know just what you have, where it is, and how you want to dispose of it.