Tag Archives: Advanced Directives

Digital Assets

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.

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Durable Powers of Attorney–What?

A durable power of attorney gives another person (agent or attorney in fact)the right to make financial decisions on your behalf.  (It’s “durable” if it still works when you are incapacitated).  A power of attorney is useful if you’re closing a real estate deal when  you’re in China, someone else can sign the paperwork for you.  It’s also a basic estate planning tool that allows your agent to pay your bills and handle your financial matters if you’re incapacitated. 

A power of attorney can be very narrow in time (only effective on the closing date) or broad (starts now and is in effect until I die).  It can also be broad or narrow in its powers.  It is a very powerful tool, so be sure that the person, time period and powers are those you’re comfortable entrusting to your agent.  In general, financial institutions prefer original DPOAs, so when you’re at your attorney’s office, you might execute several originals. 

Much like other estate planning documents, it’s important that you communicate your wishes to your agent, so they will act in a way that you would approve of.  A final note, this document terminates on death, so your agent will not be able to access your safety deposit box if you die with your will there, so DON’T PUT YOUR WILL IN YOUR SAFETY DEPOSIT BOX.

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