How Do Digital Assets Work in Estate Planning?
Estate planning in the 21st century involves a new type of asset: digital assets. Now that computers, smartphones, electronic bank accounts and other technological advances have become necessities in both our personal and professional lives, we need to consider these in the estate planning and asset protection processes. Determining ownership of these assets, however, involve a unique set of legal challenges.
For instance, a former pilot named Dan Ashbach started posting pictures on the photo-sharing website Pinterest after retiring. He started by pinning photos of blossoms and soon incorporated gardening and cooking. Eventually, he gathered about 1.6 million followers. Soon, businesses asked if he would add links to their websites or their customers’ websites whenever he posted images. Mr. Ashbach currently makes up to $10,000 a month helping businesses attract people who use Pinterest.
Clearly, this Pinterest account is an asset. Mr. Ashbach is working with his lawyer to build an estate plan that takes into account his digital assets.
However, many people do not consider these assets when creating an estate plan, leaving their digital assets behind on a password-protected computer with nobody else knowing the password. As such, we strongly recommend meeting with an estate planning lawyer to see how best to incorporate your digital assets into a will or a trust so that these assets can be accessed and distributed according to your wishes.
What are Digital Assets?
The following could be considered examples of digital assets:
- Bank accounts that are online only
- Bitcoins, or other forms of digital currency
- Blogs or websites that you created or operated
- Movies and music that you downloaded to your media library
- Social media accounts such as Facebook, Twitter or LinkedIn
- Text messages
- Personal pictures that you stored online
These are only a few examples of assets that “live” on the web and carry some sort of value. However, these assets are not always easy to distribute in an estate plan.
Can Digital Assets Be Included in a Will or Trust?
If you actually own the rights of the digital asset, then you should be able to transfer it in a regular estate plan. For instance, if you own a website, that content is yours and you can transfer that website to someone else in the event of your death.
The terms of service agreement on several digital assets may disqualify you from claiming ownership in some cases. For instance, photos you upload to social media might not belong to you anymore, depending on the platform’s terms and conditions. It is strongly advised that you reach out to a local estate planning lawyer to see how you can gain access to your assets online.
There are a few things that you should do when considering your digital assets.
- Make an inventory of all these assets, complete with a list of usernames, passwords and your relation to the property (owner, creator, contributor, etc.).
- Consult with someone who understands computers and digital assets to make sure you are passing them on correctly.
- Leave written instructions of what you would like the beneficiary to do with each digital asset once distributed.
Your Des Plaines estate planning attorney can help you figure out which digital assets you actually own and how they can be distributed. The attorneys of Pluymert, MacDonald, Hargrove & Lee, Ltd. offer 150 years of collective legal experience to Illinois residents needing estate planning guidance.