Your digital assets can include email accounts, social media accounts, music, ebooks, and movie accounts, among others. Unfortunately, problems often arise upon the owner’s death due to fine print in the user agreement for a website or service, indicating that you will either surrender all your property rights to any content that you have stored on the site, or that you have acquired only a temporary right (license) to your files that may expire upon death. For example, under the Yahoo® service provider agreement, a user’s content is non-transferable and will be deleted upon the user’s death.
This can cause challenges for your surviving family members, as they may be unable to access your email or social media accounts after your death to remove or reclaim photos, music or other media/information stored or posted online. The good news is that several states are beginning to address this issue through state statutory law, including Massachusetts and Maine, which have either proposed legislation or directed a commission to review proper steps in moving forward. In the meantime, below are a couple of action items that can be done today to move toward the protection of your digital assets:
1.Meeting with an attorney to discuss the possibility of inserting language into your estate planning documents (Wills and Durable Powers of Attorney) authorizing a designated individual to take possession of and manage your digital assets in the event of your passing. Many states will not recognize this right, so discussion with an attorney is key.
2.Creating and annually updating an inventory of your digital assets to be stored in a secure location for distribution upon disability or death.
Impact on Small Businesses:
Since many small businesses are solely managed by the owner, the location and very existence of digital assets may be a mystery to all other employees. If you are a business owner, your company can find itself handicapped upon your death or disability if digital assets such as email, payroll, client information, website, online banking and cloud storage are not accessible to your employees.
While you may be hesitant to provide passwords and access information to your employees, a simple way to approach this potential challenge is to register digital assets under the company’s name, thus avoiding personal licenses that terminate upon the death of an individual. Also, a recent Journal of Financial Planning article suggests implementing a Digital Asset Management System (DAMS). Large companies spend a significant amount on their plans, but owners of smaller businesses can take the main tenants of a DAMS and implement a scaled down management system in their own company. The main idea is to standardize practices surrounding ingestion, annotation, cataloging, storage, retrieval, and distribution of your digital assets.
Currently, digital asset succession planning is accomplished through the use of wills, trusts and online digital estate planning services. The use of wills and trusts are similar to the individual case above, with the trust providing much needed privacy of sensitive log-in information. Digital asset management companies can also be used in conjunction with estate documents to help create a plan and implement the protection of your personal or company’s digital assets. Be sure to do your research and stick with a well-known trusted company, due to the sensitive nature of the information.