Estate Planning for Digital Assets
THE COUNSELOR
Volume 3 • Issue 2 • February 2013
The Counselor is a monthly newsletter of Hallock & Hallock dedicated to providing useful information on estate planning, business planning and charitable planning issues. This month's issue will discuss Estate Planning for Digital Assets. If you are interested in learning more about the ideas discussed in this newsletter please contact us for a consultation.
Digital assets are increasingly important to plan for, yet often overlooked. More and more our personal information, financial information, and business information is stored digitally. Not long ago, such information was captured on paper and stored in a file cabinet or safe. Now it is located on hard drives or in the “cloud” and protected with countless different passwords. Failure to plan for such assets could leave your loved ones or business partners without access to critical information.
Digital assets can include a wide variety of things such as:
Online bank accounts, brokerage accounts or store accounts
Reward programs such as frequent flier miles or store points
Social media accounts such as Twitter, Facebook or LinkedIn
Websites or Blogs
Email accounts
iTunes or similar accounts
If your representatives don't know the locations or passwords for your digital assets, they will struggle to access important and sometimes priceless digital information, photos, etc. Stories abound of family members who have been denied access to email or other accounts of deceased loved ones. For example, if you use Yahoo! for your email, they have the following policy: “No Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.”
While the law in this area is almost non-existent, fortunately there are things you can do to make sure that your loved ones and associates have access to your important digital information.
Create an inventory of your digital assets. Breaking the assets into categories can help make this task less daunting. Categories might include: Hardware, Software, Social Media, Websites/Blogs, Online Accounts.
Determine who you would want to be in charge of your digital assets. This should definitely be an individual that is computer savvy.
Complete a “Virtual Asset Instruction Letter” or VAIL. Use this document to list all of your online accounts and assets, along with the web addresses, user names, passwords and answers to security questions in order to give your designated representative(s) the ability to identify and access these accounts. Make sure this document is kept in a secure place and that your representative knows of its location. Also, make sure you keep this document up to date. When you change an account or password, update your VAIL.
Consider storing important documents in a secure storage vault in the “cloud.” At Hallock & Hallock, we offer our Clients the opportunity to store their documents in a secure online storage location accessed through our website.
Leave instructions in your estate planning documents. Who gets your rewards points? Should an obituary be posted on your Facebook page? How should sentimental assets be distributed?
Include the power to manage online or other digital assets in your power of attorney.
Like any other assets, the assets that now exist in the digital world need to be planned for in the event of our incapacity or death. Don’t delay, start working today. Your efforts will preserve important records and simplify the task of those charged with handling your affairs.
This Newsletter is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.