How can digital assets be managed in an estate plan?
Today, more and more individuals conduct their personal and business affairs online. Social media accounts like Facebook, Twitter, Instagram, and email, digital pictures or even on-line investment accounts, are considered to be digital assets. This raises the question of how such assets should be managed in an estate plan, particularly when traditional probate law does not address this issue.
Michigan Governor Rick Snyder recently signed a bill into law that provides a mechanism that enables people to provide for the passing of digital assets in a will. The law defines digital assets as "an electronic record in which a user has a right or interest."
While broadly defined, the law is designed to clarify the ownership of digital records in the event of death. In addition, proponents of the legislation believe it will also be helpful in situations where individuals become incapacitated or can no longer manage assets such as online bank accounts and bills.
Protecting Digital Assets of an Estate
By naming a designated personal representative to act as a trustee, a loved one who dies or becomes incapacitated can plan for how these assets and accounts will be managed. There are some steps to take for properly managing digital assets in an estate plan.
First, it is necessary to identify and make an inventory of all online accounts, memberships and subscriptions. This list should specify web addresses, user ID and password information, and account numbers. Because a will is a public document, this information should not be included, but only referred to, and a trustee should be appointed who can access this information.
Whether a spouse, family member or trusted friend, the trustee must be provided with password information to gain access to these accounts and also manage the digital assets according to your wishes. Therefore, your will should provide the executor with specific instructions on how to obtain the passwords and what should be done with these accounts.
As this new area of probate law unfolds, it will also become necessary for internet service providers, social media companies, and other online businesses to create uniform standards for how digital assets should be managed in the event of death or incapacity. In the meantime, if you have questions about estate planning in the digital age, you should consult with an attorney who is up-to-date with these issues.