I’m almost 50, I use computers every day. My life is more organized and more efficient because of on-line banking, automatic bill pay, PayPal, and my smart phone. What happens to my life if I get hit in the head and forget my passwords? Have you ever forgotten the secret questions for the ITunes account you opened 8 years ago? Have you ever had a small child “re-set” your security code on your Iphone? Have you had a loved one pass away and have no way to access their email account or banking services? If any of these things have happened to you, you know that digital assets are an important part of life today.
All these services, data, and passwords are part of your digital assets. Your music collection on ITunes is a digital asset, as are photos and albums you store on the internet, blogs you write for personal enjoyment or for business, content that is published on YouTube or on Twitter. In many cases, these assets are licensed to you personally. If you die, your heirs may have not rights to them. If you become incapacitated and no one knows about them or how to access them, they may be lost. It makes sense to keep track of passwords, account numbers and names, security questions, where your domain is hosted, what email it was associated with when you set it up, and much more. It may also make sense to designate someone who can control these assets if you are not able to. Many estate planning attorneys are adding rights to digital assets to durable powers of attorney. Others are specifying what happens to digital assets in wills or trusts. Everyone should have a digital asset organizer that you update on a regular basis, preferably kept somewhere that a friend or loved one will be able to find it if they ever need to.
Usually when you visit an estate planning attorney, there is a LONG form to fill out describing family, last wishes, assets and liabilities, and who should be your executor, trustee, or guardian of minor children. There are often conversations about health care choices, nursing homes, and how the primary residence should be owned.
When was the last time your attorney asked you to write down your Facebook username? Probably never. In our rapidly changing relationship with technology, what we own and how we own it is also changing. I heard on the radio this morning that 60% of bills are paid on-line now (this is why the U.S. Post Office needs to shrink).
Think about how that will affect the person who probates your estate…We used to hope that there would be an organized file with bills and account numbers, we’d count on the mail coming with statements and other account numbers. How do we find the electronic accounts that “Aunt Edna” kept on her office computer? How will we find the beautiful photo albums that mom kept in her Flickr account? What about the software that has three years left on its license – who owns that, and what is it worth? How on earth do you cancel the monthly Xbox Live account? (Anyone who can provide this information to currently living mothers will also score some major points!)
Let’s get started on our digital asset planning. I’ve got another long form that I’m happy to e-mail to anyone who requests one. Please put “digital asset planning” in the subject line and send a request to email@example.com.
What happens to your Facebook account, Paypal transactions, or Ebay account if you pass away or become incapacitated? Who has access to that “bill pay” function? You have beautiful photo albums that you keep and update on-line, will your children still be able to see them? You do your business back ups to the cloud, can your business partners get to your documents?
There are practical answers and legal answers here. The legal pieces are probably still a murky tangle. Presumably title transfers as a type of intangible property in some cases, in others, the cash will flow through probate like other types of financial accounts.
However, some practical steps are necessary before you even get to that point.
- Make a list of digital accounts and passwords
- Store them somewhere non-digital (like your desk drawer)
- Update them when you change your passwords or add accounts
In some ways this goes against the grain of keeping our information secure, but I think that it is far more likely that an account will be hacked than that someone will rifle through your desk drawer for the list of digital account information. (Of course, if you have middle school children and you control the XBox Live account, this may not apply…)
Some financial and legal professionals offer services that store this type of information along with copies of your important documents. It’s a little like a digital safety deposit box, and you create a password and pin that would allow another to see the information in the event of a crisis.
However you decide to keep track, this type of information gains in importance every day, make sure someone can get to it if they need to.