While planning for incapacity or your eventual demise is not the most exciting or enjoyable task, it is one of the most impactful on those who depend on you. Amid loved ones coping with your passing, the last thing you want to do is create confusion or difficulty for those who are tasked with handling your affairs.
When most people think of estate planning, they think of deciding who will get their assets, how will those who depend on them be provided for, who will get that priceless family heirloom, and who will handle the dispensation of those assets. A new and much less considered concern, is how an online legacy will be handled. That Facebook account, LinkedIN profile, and email account will stay out there on the internet for everyone to see, and if these new digital assets are not addressed in the estate plan, heirs will be left unsure of what to do.
What are Digital Assets?
Digital assets are any sort of electronic records in which a person has a right or interest. These can include things like photography, word documents, and other audiovisual media that is stored electronically, but also includes social media profiles and email accounts. While these assets only exist electronically, they can have very real economic or sentimental value. As computers and the internet become more and more pervasive, the amount of digital assets an individual owns continues to grow. This evolving landscape makes planning for digital assets more and more important.
Digital Asset Directives and Fiduciaries
Those who have completed their estate plan recently might be familiar with a healthcare directive – a document that gives your healthcare fiduciary guidance on how to make medical decisions on your behalf. In the same vein the Uniform Law Commission is promoting an act that describes the roles and responsibilities of a “Digital Fiduciary” and Digital Asset Directives, which would allow individuals to lay out their wishes for their digital assets, and appoint a fiduciary to carry out those wishes. At this point, 31 states have started pursuing legislation addressing digital assets, and the ULC’s Fiduciary Access to Digital Assets Act has been enacted by 19 states at this point.
Providing for individuals to draft a digital asset directive, and appoint a digital fiduciary is only half of the equation however. Custodians of these digital assets need to walk a thin line between providing access to these digital fiduciaries, and protecting the privacy of the user. Luckily, some of the bigger names in technology such as Google and Facebook are developing solutions to address these concerns by allowing for provisions to be put in place if accounts become inactive, and allowing for the handoff of online accounts to others upon notification of death. Similar to a power of attorney for financial assets, Facebook has implemented provisions where someone can select a ‘legacy contact’ which would get access to someone’s account upon Facebook receiving verification of their incapacity or death.
As our presence and involvement on the internet continues to grow, so too does the importance of planning for what happens to our digital assets. The ever-evolving area of estate planning for digital assets highlights why it is so important to have your will and other estate documents reviewed at least every 5 years. To get the estate planning process started, contact your Financial Life Planner or feel free to reach out to me directly.