When you begin creating or updating your estate plans, you’ll likely spend the bulk of your time on these two points: determining which assets you have, and then deciding which people and charities will receive these items after your lifetime.
But have you given a thought to your online legacy?
After all, most estimates show that the average American spends 13 hours per week online, and the bulk of that time is spent on social networks. And while not all chatter exchanged on Facebook has sentimental value, a blog with the many musings of an aspiring author or a collection of family photos stored on a photo-sharing site could be meaningful to those who have otherwise not thought about how they want to pass on their digital assets.
That’s why more estate planning attorneys are asking people to document more than just their online banking information.
“Planning in the digital age is becoming more complicated and extensive,” says Lynn M. Gaumer, the senior technical consultant at The Stelter Company and an estate planning attorney with more than 10 years experience in private practice. “Digital assets are now a large part of our client’s estate and need to be addressed with your attorney during the estate planning process.”
What Are Digital Assets?
Digital assets are intangible personal assets formatted into a binary source—including files and information stored in online accounts (like email), domain names, online storage accounts and various social network sites, according to the National Association for Legal Professionals.
But that doesn’t mean you own all of your digital assets. When you sign up to use a service, you agree to terms-of-use agreement. These agreements often state the service is solely for his or her use and not assignable to another person they name.
Facebook will memorialize a user’s account to allow friends and family to write on their wall. But the account can also be shut down based on a family member’s request. Yahoo, on the other hand, deletes a user’s data and account when presented with a user’s death certificate.
While several state lawmakers have drawn up legislation that would require social networks to grant access to loved ones when a family member dies, users are inevitably subject to the terms-of-use agreement.
Managing Your Digital Assets
To have some control over your digital footprint, Gaumer recommends that you at least draft a separate document that includes your online accounts, passwords, security questions and answers and sharing this document with a loved one. Gaumer recommends these four steps:
- Identify all of your online assets—email, Facebook, PayPal, bank accounts, etc.
- List the usernames, passwords, security questions and answers, along with the accounts on a computer spreadsheet that can be easily updated. The list should either be stored on a USB flash drive, CD or printed and placed in a safe location such as a fireproof safe or safe-deposit box.
- Share the location of your list with a trusted person, such as your spouse or a loyal friend.
- Meet with an estate planning attorney to create a plan that will allow for an easy transfer of your digital estate to your heirs.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.