Death in the digital age is a lot more complicated than it used to be. Traditionally, fiduciaries and family members start administering an estate by reading the individual’s mail and sorting through records at the person’s home. However, with online accounts and paperless billing, these traditional approaches may not be available to fiduciaries today. The information needed to locate and access tangible and digital assets is often in the digital world itself. Email accounts are typically the primary access point to all other online assets. Online statements, notifications, messages, paperless bills etc., will all come through to the decedent’s emails. Moreover, the decedent’s address book and calendar are often tied to or stored within the email account.
Given the breadth of digital assets it’s difficult to know where our survivors would start, other than that they would likely be overwhelmed. Further complicating these matters is the uncertainty of existing ownership and transferability laws that do not adequately address the category of property known as “digital assets.”
What are Digital Assets?
Digital assets are broadly defined to include any online account and any file stored on a person’s computer or a server. Online accounts include things like social networking sites (e.g. Facebook, Twitter, LinkedIn) email accounts (e.g. Gmail, Hotmail, Yahoo!), online financial or brokerage accounts and online bank accounts including bill pay (e.g. E-Trade, ING, ScottTrade, Fidelity), photo-sharing sites (e.g. Picassa, Kodak Gallery, Snapfish, Flicker), blogs, etc. This class of digital assets also includes online resources like eBay, Yelp, PayPal, domain names and URLs from sites like GoDaddy.com, or avatars on video games and virtual worlds such as World of Warcraft or Second Life. In short, any online account that is protected by a username and password and contains a user’s economically or sentimentally valuable content can be classified as a “Digital Asset.” The second class of digital assets is comprised of files that are stored on a personal computer, tablet, smartphone, or on a server through an online backup service. Such digital files can include business documents, address books, family photos, personal journals, family recipes, and a whole host of other types of information that individuals want their heirs to eventually have.
Professionals such as computer programmers, graphic or web designers, photographers, writers, musicians, and artists may have created “digital data” which is stored on a computer or a server that may have substantial intellectual property and monetary value. For example, when Leonard Bernstein died in 1990, he left only an electronic, password-protected, draft of his memoir, Blue Ink. The manuscript is so well-protected that no one has yet been able to break the password. Helen W. Gunnarsson, Plan for Administering Your Digital Estate, 99 Ill. B.J. 71 (2011).
Laws Addressing Digital Assets
To date only five states have enacted laws that relate to digital assets with regard to estate planning. Thus, rights of executors, agents, guardians, and beneficiaries with regard to accessing digital assets are muddy at best. In addition, there is no real consensus regarding ownership and transferability of digital assets or the category of property in which digital assets belong. Some say they are intellectual property, while others say they are intangible property. In reality, some of the digital assets may not be “assets” entirely, rather mere licenses to use the website’s services. Licenses are generally not transferrable and expire upon death. There is also a higher risk of online identity theft as criminals have an enhanced opportunity to hack unmonitored accounts, open new credit cards, even apply for jobs or procure state identification cards using the deceased’s identity.
Steps to Basic Digital Estate Planning
To ensure that your assets are disposed according to your wishes it is imperative that you engage in digital estate planning. First, do a complete inventory of all digital accounts and assets so that your estate administrator will know just what you have of potential value (or liability) and where it is. Second, assemble a list of all usernames and passwords and keep it in a safe place (e.g. safe deposit box). If you have security concerns, you may make two difference lists, one for usernames and a second for passwords, and keep them in two difference locations. Third, select a fiduciary and give them the proper information, instructions, and authority to administer your digital estate. If you have privacy concerns or if a file contains sensitive information you wish to keep confidential, make arrangements to have your executor or a trusted individual delete it or take appropriate action after your death. This can be as simple as writing things down, sealing it in an envelop and marking it “To Be Opened Upon My Death.” It is best to leave this envelope along with your Will in a safe deposit box.
Laws to handle digital assets are still emerging, but lawmakers and the courts will lag behind technology, creating confusion and unnecessary expense for those trying to sort things out. In the meantime digital-savvy individuals must take some basic steps to prepare an inventory of their digital accounts and assets, assemble a list of passwords, and give their executors proper information, instructions, and authority so that the estate administrator will know just what you have, where it is, and how you want to dispose of it.