Not too long ago, owning a personal computer was new. Today, we all interact personally and professionally using desktops or laptops and access the Internet through cell phones. The constant presence of digital information in our lives has led to social and economic changes that would have been difficult to anticipate just a few generations ago.
For those of us born before the Reagan administration, using a cell phone and relying solely on a computer to communicate and conduct daily financial transactions seemed as futuristic as The Jetsons. Now our children and grandchildren probably cannot imagine a world without a high-speed digital connection.
5 reasons everyone should plan for their digital assets
Not everyone is motivated to care what happens to their digital assets after they disappear. But here are a few reasons why you should:
- Some social media platforms will automatically mark a deceased user’s profile as âcommemorated,â notifying other users of their death and alerting unscrupulous identity thieves to start searching for accounts or information online. Unless you exercise an option available to you to select a person to close your account under that provider’s user agreement, or your will gives your executor express authority to manage, d To access or delete your profile, your social media account may be closed only at the discretion of the platform.
- Cryptocurrencies, blogs, web domain names, videos and images stored in the cloud or on an online medium can have both intrinsic and extrinsic value and can be lost forever unless you properly plan the transfer of this type of ownership.
- Don’t assume that you own everything that is stored digitally. Account credits, loyalty points, and cryptocurrency are generally transferable to your heirs. Movie and music libraries, phone apps, and email accounts are generally not transferable because you may not own the content and are only an authorized user. You and your estate planning lawyer should review user agreements to protect your rights in these accounts.
- A non-fungible token (NFT) is a way to own the original version of a digital file, such as a work of art, GIF, video, or audio recording. You can think of the NFT as a secure digital box containing a single digital file. NFTs are registered using a digital ledger called a blockchain, which provides a secure way to verify authenticity and ownership. However, like e-currency, NFTs require a separate password or key to access them, and the NFT and the underlying digital file can be lost if the owner’s trustee or executor does not have access to it. these informations.
- In our economy, many people operate businesses online only, and your successors’ access to customers and funds from PayPal or similar providers can be delayed or denied without proper planning.
What happens when you die with a will (or without one)
As many of us try to adapt to the reality of our new digital existence, estate and financial planning has evolved as well. For most of the 20th century, it was not complicated to transfer property or estates to your heirs following your death or to allow the management of your financial affairs in the event of incapacity. Preparing a living will or trust and an enduring power of attorney is always an important part of good planning. A living will or trust gives your executor or trustee instructions for paying your debts and taxes and allows you to direct the distribution of your assets to your heirs or legatees.
If you die by will, your state’s probate court will approve your choice of an executor. If you die without a will, the court will appoint an administrator to pay your debts and final expenses and distribute your remaining assets to your heirs or legatees. The responsibilities of a trustee are essentially the same, with little or no involvement of the court.
The first task of your executor is to create an inventory of your assets. Historically, this was done by checking your mail for account statements sent by banks, savings institutions and investment advisers. Creditors were identified in the same way.
How the old estate planning rules are failing today
But the old ways no longer work in our modern digital world. Account statements and notices arrive in an inbox – not a letterbox – and sometimes ownership takes the form of cyber currency and non-fungible tokens encoded in the blockchain.
Until just a few years ago, the executor, trustee, and even the family of a deceased person would be prohibited by computer privacy laws from accessing the person’s email. , digital account statements and any property held on computer servers in another state or in a foreign country. In a high-profile case from a few years ago, the parents of a soldier who died in combat were denied his last emails at home because he had not nominated someone to direct his email afterwards. his death.
Online service providers, such as Facebook, Google, and Yahoo, have worked with state lawmakers to create uniform laws governing access to people’s digital information after death or potential disability. According to the National Conference of State Legislatures, at least 48 states and the U.S. Virgin Islands have enacted laws regarding access to email, social media accounts, microblogging sites, website accounts, and more. assets stored electronically in the event of incapacity or death of a person.
The end result of your digital assets
Essentially, if your will or enduring power of attorney does not directly address control of your digital assets, your family, executor, or trustee may be limited by what an online service provider allows under the terms of service. or a similar user agreement that you accepted when you opened your account.
Digital technology will continue to develop rapidly to transform our current ideas about property rights and the way we conduct our personal, professional and financial lives. State law is unlikely to compensate for these changes as quickly.
It is important for all of us to begin to see the often overlooked presence of digital assets in our lives and domains and to strike up a conversation about how these new forms of ownership, their use and ownership should not be overlooked.
Vice President / Legal Counsel, Argent Trust Company
Jim Ferraro is vice president and trust advisor in the Shreveport, Louisiana office of Argent Trust. Ferraro graduated in 2003 from the University of Missouri at the Kansas City School of Law, past president of the Kansas City Metropolitan Bar Association’s Family and Law Section, and is a member of the Shreveport Tax and Estate Planning Board. .