Most clients and advisors are acutely aware of the value of a thoughtfully designed estate plan that provides for the eventual disposition of a client’s tangible and financial assets. Despite this, even the most carefully constructed estate plan often overlooks a client’s digital assets.
In today’s society, almost all clients are active online, and may have substantial digital assets with both sentimental and monetary value even if they do not realize that this is the case. Without a clear plan that specifies the client’s wishes, however, both state and federal laws can create roadblocks to accessing digital assets—making it critical that the client include digital assets in any comprehensive estate plan in order to ensure an orderly post-mortem disposition that carries out the client’s wishes.
Uniform Laws Governing Digital Assets
The concept of estate planning for digital assets actually covers an extremely broad range of online assets, ranging from email accounts and social media to PayPal, domain names, intellectual property stored on a computer and virtual currency. While some of these accounts are likely to have only sentimental value, domain names, blogs with advertising and business contact lists contained in email accounts can have monetary value, as well.
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Without a clear estate plan contained in legal documents, data privacy laws can prevent the online service provider from allowing the client’s executor or family members to access his or her online accounts. The Uniform Fiduciary Access to Digital Assets Act, which has been passed in most states, provides that an owner of digital assets can specify who will be able to access and dispose of any digital assets after death.
Absent proper planning, the online provider’s terms of service agreement (TOSA) will often control what happens to the account after death. In some cases, this TOSA can even override the client’s specifications that are contained in a will or other document, especially in cases where the service provider provides specifications as to how the account owner can make his or her post-mortem wishes known.
For example, Google provides an “inactive account manager” function that allows the account owner to specify what should happen to the account after it has remained inactive for a period of time. The account owner can list beneficiaries who will be notified that the account will be closed before it is deleted, giving beneficiaries time to download any content contained in the account.
It is important to remember that the instructions the client leaves in his or her online service provider’s tools will trump instructions left in the will, so it is important to include this document among those that should be regularly considered and updated.