FIDUCIARY TRUST INTERNATIONAL: Is Something Missing from Your Estate Plan? How to Keep 'Digital Assets' in the Family
Fiduciary Trust International recently issued the following announcement.
How can you ensure your collection of “digital assets” is preserved for your heirs? In this Q&A, Director of Estate Administration Kevin Duncan explains what digital assets are, where to find them and how to protect them for the next generation and beyond.
Q: What exactly is a digital asset?
KEVIN: Digital assets can be a little hard to define so I often use real world examples to describe the concept. In my mind, digital assets can be divided into two broad categories:
1) Digital assets that have real financial value.
2) Assets that are of sentimental value to their recipients.
Some examples of each category are outlined below, but the list is not exhaustive.
Cryptocurrencies like Bitcoin
Intellectual property such as manuscripts, blogs, artwork, films and musical compositions
Rewards points offered by credit cards, airlines, hotels, etc.
E-commerce accounts such as Ebay, PayPal, Venmo etc. (which could have income stored online or balances due from customers)
Domain names and Web URLs, which can be bought and sold
Virtual property (Plots of land that exist only in “virtual communities” on the internet)
Social media accounts: Facebook, Twitter, Instagram, YouTube, Tumblr, etc.
Text messages and email accounts: Gmail, Outlook, Yahoo, AOL, etc.
Digital images: Photos, videos and artwork stored on digital cameras, cell phones, personal computers, external hard drives and USB sticks, SD cards, cloud-based services, and online photography services like Shutterfly, Snapfish, Google Photos, etc.
Audio files: Music and/or voice recordings you have created
Many of these have sentimental value to beneficiaries and could also produce real financial value. An individual who relies on their social media accounts as a means of promoting or advertising a related business is a great example of digital assets that produce financial value.
Q: How can I make these digital assets accessible for my heirs?
KEVIN: First, take an inventory of your digital footprint. Make a list of all your online accounts and email addresses along with your usernames and passwords. Keep the list in a safe place, and let your executor or heirs know where to find this list when they need it.
Second, consider using a “password manager” on your computer and cell phone. There are several programs that allow you to automatically and securely store passwords and credit card information in a digital wallet maintained by an online service provider. You can access everything with one master password. Keep in mind, however, if you forget or lose that master password, it may be difficult to recover it.
If you own digital currencies like Bitcoin, there are also several secure cloud-based platforms that will hold those assets and keep them safe for you.
Q: What about social media accounts?
KEVIN: It’s a good idea to review the provider’s “terms of service” agreement to understand what happens to your account after your death. For example, some providers will allow you to name a “legacy contact” who can manage your account (within certain restrictions) and download everything you've shared on your social media page. Some will automatically notify another person and allow him or her to access to your account if it hasn’t been used for a certain amount of time.
Still, the person you authorize to access your account will likely face restrictions. In the case of Facebook, for example, your legacy contact must have his or her own Facebook account and must be one of your Facebook “friends.” In addition, your account automatically becomes “memorialized” after Facebook becomes aware of your death, which means your profile changes from “John Doe” to “Remembering John Doe.” In addition, your legacy contact will not be allowed to access any of your private Facebook messages. These types of constraints are typically in response to concerns about violating privacy laws.
Q: Couldn’t my spouse or children just log on to my account with my username and password?
KEVIN: Many people are surprised to learn that federal privacy laws prohibit anyone—including spouses, parents and children—from accessing the digital assets of a deceased family member without proper authorization. Of course, your spouse or children could log onto your account with your username and password, which I imagine happens quite often. Technically, that would be a violation of federal law as well as the provider’s policy and terms of service agreement—even if that person has your blessing.
Q: What steps should I take to ensure my trustee can access my digital property?
KEVIN: Generally, all fiduciaries (such as the executor of your estate or the trustee of your trust) have the legal right to access and manage your assets upon death or incapacitation. However, because the law doesn’t always keep up with technology, that right does not automatically extend to digital assets.
The good news is that laws are being enacted that allow you to authorize your fiduciary to access your digital assets by adding specific language to your will or trust document. Therefore, it is critical to work with your estate planning attorney to be sure your fiduciary is granted explicit authority to collect and manage your digital assets at your death or incapacity. Without that authorization, it’s possible your digital assets could be lost forever.
Q: Is all this really necessary for a few photographs and emails?
KEVIN: In my opinion, including your digital assets in your estate planning documents is well worth the effort. You’ll obviously want to protect any digital currencies and other financial assets you own. But you should also consider making provisions for assets that might seem trivial or insignificant to you, like social media postings or photos. The next generation might find them very meaningful, either for their sentimental value or their contribution to your family’s history.
By taking a few simple steps, you might also be helping your heirs avoid a legal battle. Consider this case, which was recently settled in New York: A resident spent several years trying to access photos in his deceased spouse’s iCloud account, but Apple steadfastly refused. He ultimately took his case to the New York Surrogate’s Court, which finally ruled in his favor after nine months of proceedings.
As technology continues to find its way into different aspects of our lives, incorporating digital assets into your estate plan has become yet another way to leave behind a legacy that reflects a life well lived.
Original source: https://www.fiduciarytrust.com/insights/commentary?commentaryPath=templatedata/gw-content/commentary/data/en-us/en-us-ftci/trust-estate/virtual-estate-planning-dealing-with-your-digital-assets&commentaryType=TRUST%20&%20ESTATE%20PLANNING