Friday, May 17, 2013

Estate Planning for Digital Assets Poses Some Questions

Over this three post session I’ll venture into a topic that most of us are familiar with but probably not prepared for.  We all use technology in various ways.  Some of us are more active using online resources than others.  Have you stopped to consider what will happen to your digital assets upon your death?

First, what are digital assets?  Evan Carroll, author of Your Digital Afterlife writes:

“Email, photos, videos, Facebook accounts—they’re the elements of your new digital life.  In fact, almost without realizing it, we have shifted toward an all-digital culture.  Future heirlooms like family photos, home movies, and personal letters are now created and stored in digital form.  And increasingly they’re stored online at popular sites that might not be accessible to your loved ones after you pass away.”

In a recent presentation at the National Association of Personal Financial Advisors (NAPFA) conference Mr. Carroll describes four different types of digital assets that should be considered.

  1. Contents of computers and devices such as desktop computers, laptops, tablets, mobile phones and other similar devices.
  2. Email including incoming mail, stored mail and sent mail.
  3. Social networking and websites like Facebook, Twitter, Flickr, Pinterest, LinkedIn and others.
  4. Online business and account management.  This could include sites such as eBay, Etsy, blogs, advertising, PayPal, online banking and bill payment services.
Do digital assets have value?  Think about email in particular.  How much of your day to day routine involves email in one way or another?  All online accounts use email as a hub for management of your account.  I receive bank statements and ebills, reminders from the bank, reminders of service from the exterminator, emails from the kids teachers and principals, password reset requests, order confirmations and travel itineraries to name a few.  Not to mention all of the personal interactions with friends, relatives, volunteer organizations and clubs the kids are involved in.  What would happen to all of these things upon my death?  Is my spouse completely prepared to take over the daily management of our lives in my absence without access to all of these digital assets?  Unfortunately the answer for me is no.  I suspect the answer may be the same for many of you.

The issue is even more imperative if you are one of the many entrepreneurs who operate a small business through sites like Etsy, eBay or others.  Is there someone who knows how to wrap up your business dealings?  How would you access the business records held as part of the history of these online accounts?

Each site has a “terms of use” section with details about how the account is handled should a death occur.  How would a person navigate the requirements of each account when they all differ slightly in what is required upon death and what they will provide?

Basically I have asked a lot of questions and offered few answers.  I will be exploring different options in future posts.  Stay tuned…

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