An estate’s executor is responsible for distributing all the assets in your estate in accordance with your wishes, but in the absence of a complete and accurate inventory of those assets, that responsibility may prove difficult. Not only should such inventories include conventional assets such as bank accounts, stocks, bonds and real estate; in today’s electronic information environment they also should include “digital” assets. And while the digital assets may not have a large monetary value, your executor needs to be aware of the extent of the content and whether it has commercial or personal value.
Digital assets include such items as computers, tablets, cell phones, CDs, internal and external data storage devices, including data stored in the “cloud”, and the content from software programs. They also include the apps installed on your computers and cell phones. Any content on Facebook and LinkedIn and other social media accounts showed also be considered.
Creating and updating an inventory of all your assets, including your digital assets, is a procedure that will facilitate your estate’s administration and benefit your heirs.
Here are some things to keep in mind as you compile a list of your digital assets:
- Passwords. Your executor will need a complete listing all your current passwords to digital information. If you protect passwords with an encrypted program, include the master access key. Most important, keep your list updated when you change passwords. Current laws have been passed to protect user privacy, thus executors and other fiduciaries who don’t have access to accounts may not be able to obtain it later.
- Social media accounts. The average user today has multiple social media accounts such as Facebook, LinkedIn, Twitter, Snapchat, Instagram and also accounts for instant messaging or other communications. The executor will need to know how to manage the content of these accounts.
- Email providers/Identity Theft. Control over digital assets should be established as quickly as possible. Some email providers will disable accounts after a 60 day period of dormancy; however, in most cases email newsletters and subscriptions such as eBay, Amazon, and PayPal will continue to maintain accounts that are not closed and will continue to debit accounts for periodic fees until cancelled. Email and digital accounts are ripe for hacking and identity theft of decedents is on the rise. Family and executors tend to wait to turn off online accounts until months after the date of death giving thieves the opportunity to establish new credit cards and obtain identity papers and often times deplete banks accounts.
- Automatic on-line bill paying and account renewals. You should maintain a list of these accounts and have it accessible to your Executor so that he/she may monitor and stop automatic renewals promptly.
- Be comprehensive. Add web addresses, user names, and passwords for non-financial accounts such as your email and online storage sites to your inventory. Why? These accounts can be essential for retrieving invoices, statements, and other paperwork for which you’ve chosen electronic-only delivery.
- Digital medical records. Storing online medical records is becoming more common and it may be important to access the content. Access instructions should be provided to the Executor. It is important that all health care proxies or living wills include language giving the Executor authority to access health information after death. Furthermore, access to the medical history might be especially helpful for descendants to allow for early detection and treatment of diseases.
- Authorize who can access your accounts. Authorization language that addresses digital assets and the ability to access and manage these assets should should be incorporated into Wills, Trusts and Powers of Attorney. The executor should be given the power to delete or destroy data without repercussions. It may be preferable for you to designate a separate digital Executor or Trustee who can address these issues apart from the regular administrative actions of the Trustee or Executor.
Individual states are moving toward adopting laws that allow estates’ representatives to manage decedents’digital assets. If your state has not yet taken steps to address the issue, you may be able to add wording to your Will or have your attorney prepare an authorization for release of the information. In either case, keeping track of your digital assets can make assembling an inventory a simple and essential process.
Please contact us for more information or assistance in ensuring that all of your assets, both traditional and digital are identified and addressed in your estate documents.