Why people still don’t understand digital assets

I read a recent article describing digital assets. The article described the need to create a plan for bequeathing one’s online presence to loved ones and talked about the need to wrap up old Facebook, Twitter and social media accounts by including these “digital assets” in one’s Last Will and Testament.

It’s not just social media accounts, it can be blogs or financial accounts or other things that you can access on your phone or computer,” said Elizabeth Volney, an estate attorney who recently gave a lecture on the subject. “We have tried to adapt our documents to provide access to these accounts both during incapacity and death.”

The recommendation that comes from the article is that you should “hand over the password to your loved one, and let them take care of things when you pass away.”

This is such a simplistic view of the minefield of digital assets, that I need to expand on the issues here.

I always struggle with the lumping together of “digital assets” because I think there are three main categories and each comes with their own considerations:

The first are the accounts that just need to be handled for housekeeping; email accounts, your Linkedin profile, Twitter, Instagram, Facebook, Tinder etc. These should all be closed down otherwise there are uncomfortable reminders; I have two LinkedIn connections who have passed away…it’s awkward and disturbing every time I review my contacts. Most social networks however, now have policies for these and they are well illustrated in this infographic. The situation most commonly cited to highlight this issue occurred in 2004 and 2005 when the family of Justin Ellsworth, a deceased U.S. Marine, successfully secured a court order to force Yahoo to give the contents of Justin’s email account to his family. Keeping account ID’s and passwords in a safe place to be discovered by your loved ones is one approach to handling this type of “digital asset”.

But then there are the accounts that have sentimental value that really should be passed down to a named beneficiary. I have all of my family photos in an online application called Lifecake and I don’t want these to just disappear. iTunes music libraries and eBook accounts should also be preserved if possible, after all, a generation ago people would leave their book and record collections to their children. You may have a genealogy account at ancestry.com, or used another online service that has been developed over a period of time with a great deal of effort. It is a shame to see these disappear and there may be somebody in the family who would like to take them over. It is even possible that different family members may argue over who should take control of these accounts, so although there is little financial value, there is still an argument for including these items in your Will so that it is clear who will take control of them after you have passed away.

However, the third category is the financially valuable digital assets and these can create really significant challenges. If your estate is to be divided equally between your children, but your estate includes some prestigious domain names registered at GoDaddy, a viral video on YouTube, a blog that generates Adsense revenue, some digital downloads at eJunkie, an affiliate account through Clickbank, a PartyPoker account with a significant balance etc how are these going to be divided? It is conceivable that your single most valuable asset in your entire estate is a domain name that could expire if nobody assumes control of it. There was an interesting article recently about a man who threw out an old computer with $7.5 million worth of Bitcoins on it. The inheritance and taxation laws are going to have to move faster to keep up with these innovations; most estate planning lawyers simply don’t understand what some of these things are.

There are of course digital assets that blur the lines between these categories; like email addresses or online identities that may have little financial worth but certainly have value to the family. It is only a matter of time before we see siblings fighting over the family twitter handle. @smith would be pretty cool to have, so it really needs to be in the Will along with the porcelain tea pot that nobody really cares about anyway.

There is much more to the handling of digital assets than keeping a list of User ID’s and passwords. At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we partnered with MyLifeLocker to make sure that this piece of the puzzle is taken care of. We also have a proprietary keyholder® mechanism to ensure that no online accounts are left undiscovered by your Executor. But you have to give very careful attention to the distribution of these digital assets and make sure that the true value of each asset is properly understood. If certain digital assets have financial value, it may be appropriate to list them in your Will.

What is your most valuable digital asset and do you know who will own it after you have passed away? Do you have any digital assets that may result in a family squabble? I would love to hear about them as I am sure I have missed some potential issues in this blog post.

 

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