Digital Asset Planning
In previous articles written by my colleagues and me, we have discussed the importance of having a will and powers of attorney. When thinking about wills and powers of attorney and what they provide, the first items that typically come to mind are how financial assets and physical property will be managed and/or distributed. However, another asset class is growing significantly in importance regarding planning for the future: digital assets.
Digital assets are any and all accounts, information, media, and documents that are stored electronically on a computer, tablet, cell phone, or in the cloud. Today, there are many everyday facets of life that are digital, whereas twenty-five years ago, virtually none of those facets were digital. For example, twenty-five years ago, photo albums and letters were the norm. Today, many people’s photos are digital only, emails have replaced letters, and blogs have replaced journals and diaries. Additionally, less and less people are receiving hard copies of their bank statements, tax returns, and medical records/bills, as increasingly more people receive digital copies of these documents online.
Many of these digital assets have some type of value, whether it is monetary value, sentimental value, or historic value. When a person is no longer able to manage these digital assets due to mental incapacity or death, it is important for the person’s agent to be able to access and manage these digital assets. It is also important for the person’s agent to be aware of any wishes, if any, the person had regarding the management and/or storage of these digital assets.
Unfortunately, if a person does not explicitly provide that a fiduciary has the authority to access and manage certain digital assets, those digital assets can be frozen and/or deleted entirely after a certain period of inactivity. Some providers, such as Facebook and Google, allow users to name someone to handle the contents of their account after their death in a designation form provided directly by the provider. However, where this service is not available, directions in a power of attorney, will, trust, guardianship, or conservatorship will control a fiduciary’s access to digital assets. If not provided specifically, some providers will not allow access to a fiduciary.
If you are thinking about having estate planning documents prepared, you should consider granting your fiduciary the authority to access and manage your digital assets. If you already have estate planning documents in place, you may want to think about having these documents updated to reflect how you would like your digital assets to be managed after you are no longer able to manage them yourself.