Digital assets: How to document. Imagine you have a nearly $1 billion empire of digital assets – music, movies, and royalties. Sound good?
Now imagine you have no will, aren’t in a committed relationship, and have no children. What happens to those digital assets if something happens to you? Prince’s untimely death in 2016, and his lack of estate planning, brought to mind that the more we have, especially digital assets, the more we have to plan.
Celebrities have a team of advisors who try to keep up with constant changes to their clients’ property, especially when it comes to protecting intellectual property. The longer a celebrity waits to address an ever-growing empire, the harder the decisions are to make for everyone involved. Their advisors find it’s better to address changes as they happen, even if it means more frequent revisions.
Back in the Real World
So what does this have to do with non-celebrities? While you may not feel as though you have a digital empire, your online life might be more complicated than you think. It’s estimated the average American has between 30 and 80 online accounts with passwords.
For example, an attorney had a father-in-law who ran three businesses from his digital devices. When he died suddenly in 2011, she was shocked at how difficult it was to access his emails, accounts, and online life. Every online provider had different requirements. Many of them would not honor court documents asserting her authority over his affairs. This was her introduction to the concept of the “digital asset,” and, as a result, she became an expert in that niche.
Keeping track of digital assets can be overwhelming, but you can begin by thinking about them in four main types – personal, financial, business, and social.
Personal Digital Assets
Photos, movies, books, e-books, music, and podcasts. Unlike your Simon and Garfunkel records, Michael Jackson CD’s, or Rocky DVDs that the kids will get whether they want them or not, there are some e-libraries you can’t leave to anyone. For example, access to Kindle and iTunes libraries die with their owners. Upon notice of death, all content in an iCloud account is deleted. Therefore, for photos and videos stored in the cloud, make sure you have a backup, especially if it’s iCloud. Leave instructions somewhere on how to get into iCloud, and how to get to the backup.
Financial Digital Assets
Bank, brokerage, PayPal, Venmo, frequent flyer, crypto, and Treasury Direct accounts. Did you sign up for paperless statements? Then there will be no paper trail. Make sure you have documented somewhere that online accounts exist. Email is one of the most critical items for heirs to access. If no one can get into your email, and you haven’t kept good notes somewhere, they may not know you even have a crypto, Venmo, Treasury Direct or I-bonds account.
Business Digital Assets
Blogs, e-books, audiobooks, e-commerce sites. Intellectual property is often housed digitally. Have you inventoried any copyrighted works and addressed them in your estate planning documents? Can someone get to them in a way that will continue to produce revenue or royalties? This one is a definite issue to discuss with an estate planning attorney.
Social Digital Accounts
Facebook, Twitter, Instagram, TikTok, Pinterest, LinkedIn. An elderly friend passed away in 2009 but his face and profile still popped up occasionally as someone “I might know” on Facebook and LinkedIn. I am guessing his family either weren’t involved with social media, or simply were not able to log in and post a nice memorial tribute to a wonderful man. What do you want your online presence to look like, if at all, and for how long, once you’re gone? Many of the social media sites now have ways to transition your account should you die or become incapacitated.
Digital Assets Executors
With many assets and accounts, you might need a digital asset executor. It turns out there are such roles now, and 47 states, including Florida, have ratified them through passage of the Revised Uniform Fiduciary Access to Digital Assets Act (UFADAA). (You can read all about it here: https://my.uniformlaws.org/committees/community-home/librarydocuments?communitykey=f7237fc4-74c2-4728-81c6-b39a91ecdf22&tab=librarydocuments). With the act, you can name a digital executor – someone you trust to access your email, text messages, and social media accounts, in your will or trust. Through UFADAA the online companies now must honor your wishes, if they are documented properly.
Two Steps to Begin
Take a few minutes to consider how easy, or not, it would be for someone to take over your digital life. A first step can be to list all financial and business accounts on one page. If you have a comprehensive financial plan, ask your advisor to compile a one-page net worth report listing all of your accounts and assets. Keep the report/listing somewhere safe, but also let the important people in your life know how to find it.
Once you have the listing, next is providing all the credentials. It’s tough to know the safest way to store these. Should you handwrite them next to the accounts on a paper version of the list, or save them in yet another digital format? What will be the easiest way for the right someone to find them, but not too easy for wrong someones?
Further, it can be challenging to keep all the credentials up to date. One solution is to use a digital password manager, such as DashLane. Knowing one master password is all that’s required to access credentials to any and all accounts stored there.
Taking this inventory is a good beginning to leaving a bread crumb trail for the important people in your life who may need to pick up where you left off. Further, spring is a good time of year, while you have all of your year-end statements together for tax preparation, to dive in.
If getting financially organized is a challenge for you, schedule a call and tell us what’s on your mind. https://bit.ly/3GWZNrc.