The digital landscape has so fully encompassed our lives that the online services we use even affect us post-mortem. We have bank accounts, emails, social media profiles, digital music and movies, assets in cloud storage, media subscriptions and dozens of other digital products that are entwined in our identity and digital legacy. And while these services make life more wonderful, without proper digital estate planning they can seriously hamper the people we leave behind.
Imagine a man named Tim. He’s middle-aged, married and has a teenage daughter. Tim is also the sole owner and manager of a carpentry business that designs and sells custom kitchen tables. Tim handles the financial planning and bills for his family and the business alike, most of which is completed through online banking or similar resources. He’s the only person who knows the log-in information. On top of that, most of his customers order through online forms, and none of his five employees have authorization to access the company’s internal design systems to process these orders without Tim’s log-in.
Tim unexpectedly dies in a car crash.
He left no formal estate guidance or any information of how to access or use his digital assets, including his log-in information for the family finances and his carpentry business. Consequently, now his family doesn’t have a convenient way to view their joint finances or pay their bills, and his business grinds to a halt because his employees can’t access the company’s banking or design software.
If Tim went through the simple task of making a digital will, then his family and employees could have transitioned through his absence without as much of their daily lives collapsing. That’s because a proper digital estate plan would have identified the location of his online accounts and other digital assets, and then provided access information and ownership rights to help his family, friends and employees continue moving forward. In today’s hyper-digital age, this is the most commonsense approach to handling digital assets after death.
What are Digital Assets?
Digital assets are essentially anything that exists in a binary format and comes with usage rights, which means most folks have a massive digital estate. An article on Lexology states that possible sources of digital assets include media like movies, photos, and artwork; medical or genetic information; financial service accounts; business accounts; and social-media accounts. However, the legal qualification of a digital asset greys a bit when it comes to your online data. Companies like Facebook require a court order for access to another person’s data or consumer profile—dead or alive—so you’ll need to keep requests like that in mind.
When you’re planning a digital estate, it’s also useful to plan what assets you’d like to control post-mortem and which ones aren’t worth the hassle. However, what digital assets you can and can’t bequeath is sometimes tricky.
Because digital assets are not tangible property (like a house or a car) it can be challenging to dictate how intangible assets (such as photos in cloud storage) are distributed in a will. For example, unlike physical media, the law around digital rights management is murky enough that you might not be able to say who gets your online movie and music collections. The iTunes or eBay credit you have left could be up for grabs, too. There are ways around this, but it can take innovative estate planning with experienced estate attorneys to solidify a foolproof plan.
Who Should Have Access to Your Post-Mortem Digital Assets?
Creating a proper digital asset management strategy isn’t the equivalent of leaving log-in information with a third party, such as online estate planning platforms. Performing only this step can be ineffective and unpredictable—especially if the chosen third party happens to lose or sell that sensitive information.
Our example with Tim shows that it’s critical to consider who has post-mortem access to digital assets for estate planning and management purposes. Your estate’s executor, and your spouse or children are typically people who should have this privileged access. The executor often needs admittance to some online accounts, such as banking or online wallets, to gather information and monetary funds to properly administer the estate.
Who Needs Estate Planning?
Not everybody is going to need an estate or a digital will. Your lifestyle, family situation and financial wealth will dictate what’s necessary for your post-mortem bequeathals. However, Lexology advises that the following demographics can greatly benefit from meeting with experienced legal counsel to discuss estate planning:
- Individuals or couples who have dependents or beneficiaries with special needs;
- Adoptive parents, who need to make special provisions for inheritance that differ from state law provisions that apply to those without a legally enforceable plan;
- Other non-traditional families, such as those of unmarried couples or domestic partners;
- Married persons who have previous spouses or children from a prior marriage;
- Those who have special charitable goals; and
- Those who have ownership shares in a closely held business that could suffer grave disruption from an inheritance battle or significant death taxes on their estates.