Topic: Digital Assets
ESTATE PLANNING; DIGITAL ASSETS
By Milton Babirak, JD, LLM | Babirak Carr, PC | Sterling, VA
When you think about your assets for estate planning purposes, you may not think of your digital assets. They might seem unimportant, even trivial in some cases, and of virtually no economic value. Your digital assets may be emails, texts and family photos. But upon further thought, some digital assets may be important and some may have substantial value. For example, online banking accounts, eTrade accounts, domain names, digital wallets, data stored in Google Drive and Dropbox, iTunes music and movies, online loyalty and rewards program benefits and online businesses can have substantial value.
What Law Governs?
Federal and Commonwealth laws govern. There are two federal laws: The Computer Fraud and Abuse Act and The Stored Communications Act. In Virginia, we have the Privacy Expectation Afterlife and Choices Act. The provisions of these acts are beyond the scope of this newsletter article. There are also terms of service agreements that govern the access to password-protected accounts. These agreements typically prohibit anyone else from accessing a user’s account, even if granted permission by the user. Such laws and agreements may govern what an executor or trustee can access in case of death and what an agent can access under a durable power of attorney in case of disability.
What to Do?
Because digital assets are so prevalent and sometimes so valuable, it is important to address the issues of accessibility of these assets in case of death or disability. Also, digital assets of value should be included in your financial portfolio. Consider the following:
Maintain and update an inventory of your digital assets and how to access each asset. If permitted by the terms of service agreement, appoint someone to access these assets and explain to them in writing how to access these accounts.
If possible, backup digital assets on a password-protected thumb drive or other hard-drive and provide instructions to your executor, trustee or agent on how to access the same.
Does your durable power of attorney for financial affairs include a provision permitting your agent to access your digit assets and password protected accounts?
Determine if you have ownership of a digital asset or merely a lifetime license to use a digital asset. Books and movies are commonly licensed.
If you have a revocable trust, transfer your digital assets to the trustee of your revocable trust if the terms of service agreement permits such a transfer. In case of death or disability, your successor trustee could have access to this asset.