As we all get ready for tax season, this is also a good time to think about organizing and planning for our “digital assets”. The newsletter has covered the topic over the years and will use this edition of the newsletter to update in depth.
What are digital assets? Generally they break down into digital equipment, information stored on digital devices and online accounts. Some also include intellectual property such as copyrights, patents and the right to royalties. So let’s break that down:
Digital equipment includes computers, tablets, notebooks, phones, separate hard drives or flash drives, music players, Kindles and other e-readers and digital cameras. As of late 2016, we can also include Amazon’s Echo Dot (“Alexa: what’s the weather in Leesburg?”)
Online accounts have greatly expanded and include banking and investment online accounts, electronic payment systems, email, social media, password management software, frequent flyer miles, reward points for credit cards and hotel chains, shopping accounts, photo and video sharing accounts, gaming, news subscriptions, cloud storage, taxi service, calendars, websites, blogs and domain names. This list is by no means exclusive.
As we noted when we first covered digital assets in 2011, when we engage in estate planning, we need to incorporate all assets, those physically identified and those existing in digital form. In our practice, we reference digital assets in Wills and Trusts, describing what the executor or successor trustee has control over, and also in the durable financial power of attorney.
But we have to acknowledge that fiduciary control over digital assets based on language in the estate planning documents may not be enforceable, depending on the practice of the account provider and state law. Each email provider may have different practices, clearly (or less so) stated on their Terms of Service. Everplans, a secure digital archive website, has collectedthe specific Terms of Service of the major email providers.
Some states have passed laws allowing or restricting access to a decedent’s online accounts. Virginia passed laws in 2013 and 2015 that have been enacted as the “Privacy Expectation Afterlife and Choices Act”, allowing the personal representative of a deceased minor to request and receive access to online accounts and a more narrowly defined access for the personal representative of any estate to eighteen months of online records. The second part of the law specifically exempts access to the content of online accounts.
The airlines have varying policies on inheriting frequent flyer miles, and conflicting information on the cost to transfer the miles after the account owner’s death.
A key question for anyone contemplating setting up an inventory of digital assets is how to grant secure access to the accounts. We all live with multiple passwords, some of requiring periodic revision. How can anyone keep a password list up to date? There are many companies offering digital archiving, serving as a secure vault for passwords. Capterrahas compiled a Top 10 list, with additional services covered.
