One of the most important reasons for writing your Last Will and Testament is to describe how you would like your possessions and assets to be distributed after you have passed away. There are of course other important elements to a Will, like naming a guardian for children, but for the most part, people associate the writing of a Will with providing an inheritance to friends, family and charity.
Traditionally these assets include things like a house, a car, money, possessions and heirlooms; all of these items being tangible ‘things’ that the Executor can collect and distribute – also known as “chattels” and “personal property”. Recently however there has been a growing awareness of a new type of asset that is typically not included in a Will, and that is the idea of a “digital asset”.
Just supposing that you write your Will and you leave everything to your children in equal shares. Your Executor has the responsibility to gather your estate, including your possessions and bank accounts, and then divide this estate between your children. However, there is a very high likelihood that your Executor will miss your digital assets and won’t even know that they exist. Then if they are located and accessed, it is not always clear how they can logistically be transferred to your beneficiaries.
So what would a digital asset look like? Here are a few examples;
You have some domain names that you “own” or rather continue to pay for annually that will expire. There is still a very active trade in domain names and they can be worth a lot of money. Domain names will regularly change hands for tens of thousands of dollars, but if the renewals lapse, they are worth absolutely nothing.
You may have a blog with sponsored banner ads. If you have established a loyal readership and attract significant followers to your blog, you could be generating a sizeable income from this blog. You may even be an affiliate of LegalWills generating commissions on re-directed traffic to our sites. Where will this money go?
You may have PayPal accounts, or be holding an account balance at PaddyPower or PartyPoker. What if you have a successful eTrade account? Again, these online accounts could be worth significant sums of money, but where will the money go and how will an Executor gain access to it?
Then of course, there are digital assets that may be worth less financially, but much more emotionally. Who will gain access to your Flickr, Facebook, Gmail, Twitter, iTunes and Dropbox accounts for example? It could be argued that online photo sites like Flickr are the family photo albums of the future. Not many of us now have a printed, dusty album to pass to our children. So how do we make sure that we have an ongoing family legacy.
Take for example this headline from a few weeks ago “Ottawa music critic leaves records to University” a gift of over 20,000 vinyl records and 10,000 CDs. Will this just be an iTunes account in a few years? Some iTunes accounts have several hundreds if not, thousands of dollars invested in them. Wouldn’t this have enough value to be treated like a tangible legacy?
I’m not even sure the law is keeping up with the concept of these digital assets; for example, whether a collection of potentially valuable domain names constitutes a part of the estate for probate purposes. Furthermore, in which jurisdiction is an online account even located?
I’m also not sure whether many legal professionals are recognizing the need to include these assets as part of an estate plan – “and my Flickr account goes to my daughter Susan”.
A few businesses are cropping up to address the needs of the digital legacy, and maybe we’ll profile these in a future post. But for now, make sure that when you create your Last Will and Testament, store it with some information about your digital assets; User ID’s, passwords, and who you would want to take over your accounts. Include a note to indicate whether these accounts have any financial value. LegalWills actually has a service that allows you to create messages to be distributed after you have passed away which is ideal for this type of situation. The online equivalent of a sealed envelope, but with much greater control and security. But even if you are creating your Will with a legal professional, make sure that they are aware of the implications of your digital assets.