by Alisa Kim O’Neil, JD, CTFA, AEP®, Director of Estate & Financial Planning
As you begin your Fall ‘clean up’, it is also a good time to review your estate planning documents. Please ensure that they address how your digital assets will be managed upon your incapacity and/or death.
When you meet with your estate planning attorney or financial planning advisor, the topic of assets comes up frequently. Questions you may be asked to consider include who will get the jewelry, artwork, grandmother’s quilt or grandfather’s boat. You may also discuss and consider how the life insurance should be titled, how should cash versus securities be distributed among loved ones. BUT, have you addressed how your digital assets will be handled? The topic of digital assets is relatively young, but not new. More and more attorneys are including language addressing how these assets should be managed, terminated and/or transferred upon a client’s death. As cyber security and online privacy are commonplace in today’s headlines, there are some things you should consider when planning for your digital assets.
Digital assets are property interests in electronic and online communications, records and/or activity. These assets can include, but are not limited to, electronic records via a license agreement, e-mail, online investment/bank accounts, websites/blogs created for personal or professional use, social media accounts (i.e. Facebook, Instagram, LinkedIn), and any Apps which allow access to your account information.
Even individuals who consider themselves inactive on social media may conduct banking online and have an e-mail address for either personal or professional use. Ask yourself these questions:
- Do I have a safe place where my username and password for each of my accounts is stored?
- Does my power of attorney or trusted advisor (named personal representative in your will/trustee of your Trust) know the location of these passwords?
- Did I leave instructions on how each of these accounts should be terminated or canceled upon my death or incapacity? (Example: appointing a Legacy contact in Facebook or appointing an Inactive Account Manager for your Google account.)
If you answered “No” to any of these questions, you should consider speaking with your attorney and incorporating the ability of your fiduciaries to access and/or control these assets. As part of this exercise, you should consider the following topics to be addressed in your estate plan:
- Inventory your banking, investment, social media, digital media, and email accounts, and the passwords that correspond to each of those accounts. Keep this information in a safe location and provide any updates to the trusted fiduciary and/or your attorney.
- Specify that the fiduciary or fiduciaries (this would include your attorney-in-fact under your power of attorney, personal representative under your will and trustee of your trust) have the express authority to access the passwords so that he/she can continue to operate and manage those accounts to your wishes.
- Prepare a succession plan for your online/mobile business to ensure a seamless transition to the new owner or liquidation upon the termination of your interest in such business.
- Identify any assets for which you have a copyright, trademark or patent protection.
Remember, taking care of these housekeeping projects helps eliminate uncertainty, the burden on your beneficiaries, and the possible conflict that many ensue if you die without directing how your digital assets are to be accessed, managed, and distributed.
New laws may be enacted effecting digital assets, so it is a good idea to keep up with these changes. If you would like to discuss this topic further, please feel free to contact the members of our Estate and Financial Planning Group at 617-338-8108.
Important: This article does not contain any legal or tax advice. You should always consult with your attorney, accountant or other professional advisors before changing or implementing any tax, investment or estate planning strategy.
IRS Circular 230 Disclosure: Pursuant to IRS Regulations, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax related penalties or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.