Your Digital Assets Part 1
The following is a multi-part blog series providing helpful information to protect and pass on your digital assets.
Who would have thought your online presence, your digital assets, might have value? And how do you dispose of your online assets or pass them on to your heirs upon you untimely demise?
There are two types of digital assets. Web domains, email domains, Facebook, LinkedIn, Twitter represent a small portion of your online presence. And well beyond your social presence, you probably have online bank, credit card and PayPal accounts.
For many of us there may not be much value in your digital assets. You may be more concerned as to the digital footprint you have left online. How many times have you seen a deceased friend’s contact page on LinkedIn? I know of three that I routinely see online. It is kind of creepy friending or linking with a deceased person. Yet, you can.
You may have a very successful business. Part of that success may incorporate or may have been created by your successful web domain for your online business. Or you may have a prominent domain name that many other competitors want to own and may pay your estate dearly for it.
Heirs Access to your accounts
Other problems may lie in your failure to plan for your untimely demise. If you have a will and so far as an estate plan, your executor may have a very difficult time tracking everything down. As an investment advisor I am faced assisting heirs who are unable to locate everything of value owned by the estate. And untangle the web of assets so that they may gain control.
One such widow was unable to unlock a heavily encrypted hard drive to obtain the information she needed. Her husband was in the computer programming arena and worked for a major corporation. He, not realizing that his death was imminent and was suffering with a form of dementia, had everything locked down via encryption. In the end she was faced with some major, unnecessary expenses that could have been avoided with some proper planning. She also may be leaving money on the table in accounts she has no information about.
Leaving digital assets open can also put your estate at risk for hacking or fraud. The bad guys have all the time in the world to break into your bank, credit card or PayPal account and steal money from the estate. How many accounts such as Amazon do you have linked to a credit card.
Think about the effort your spouse or your executor will need to exert to shut these accounts off. What if they never know about the existence of such accounts to close them.
Ultimately, the estate could be paying for the losses.
Your executor should know where everything is and all the logon and passwords to have access to the accounts. And if you do not have a will, and many of you do not, at least let your spouse have access to this important information.
Current laws governing digital assets
Accounts are governed by the terms-of-service agreement to which you agreed (or, more likely, clicked that box without reading) upon opening the account. Those agreements, plus state and federal privacy laws and laws that criminalize unauthorized access to computers, all tend to limit access to online accounts. This really complicates matters for drawing up your will and or estate plan.
There is some good news. A growing number of states are enacting laws that help clarify the rules how executors and heirs can access and manage the online accounts for the decedent. The Uniform Fiduciary Access to Digital Assets Act (another law that is a mouthful) has been adopted by many states and introduced to many more. The law lays out the rules under which an executor can manage a decedent’s digital accounts.
There is much more to this as you can imagine. Please stay alert to my next blog which will cover more on the management of your digital assets.
Corey N. Callaway
Investment Advisor Representative