Recently, I was going over a list from my attorney of the papers one should prepare for end of life, and I was smugly checking off the list:
Last Will and Testament
Power of Attorney
Personal property memorandum
Digital assets plan
Digital assets? HuH?
Well, when I stopped to think about it, there is a lot of stuff there, and some of it would be important to family members and whoever is your Power of Attorney and Executor. Nolo.com, a publisher of legal guides, defines digital assets as any electronic record you own, license or control, including any online account or digital file, whether on a device you own or in the cloud. Nolo lists the following as digital assets Nolo.com list:
- Email accounts
- Social media
- Market place accounts such as Ebay, Etsy or Amazon
- Interest-specific chat rooms or boards
- Music, books, videos
- File sharing storage such as GoogleDocs, Dropbox, iCloud or OneDrive
- Financial accounts such as checking, savings, investment
- Gaming accounts
- Online dating accounts
- Medical records accounts
- Insurance Accounts
- Blogs and websites
- Information, files and programs on phones, tablets or computers
- Loyalty benefit programs offered by credit cards.
So, what we have here is information and software, and in some cases, cash and financial assets, and security of credit, all of which is wrapped in privacy concerns. And if you have a business, this list may be doubled for the business. What will happen to all this material when you are gone or no longer able to access it? The person you named as your financial power of attorney or your executor will need access. That means passwords, pins and user names. Since these can change, sometimes frequently, the strategy is to keep a list. The tech security folks tell you not to write down passwords, but that is not really possible. Just keep that list up to date and in a secure place, and let the right people know where it is. Do not put passwords in your will, which will become a public document upon probate filing. You probably will change them many times before they are needed, anyway.
The legal status of a deceased person’s digital assets depends on the person’s residence state, and whether that state has enacted the Fiduciary Access to Digital Assets Act. This act allows executors and trustees access to the deceased person’s digital assets, and it overrides any individual website’s terms of service. Check with your lawyer on the laws in your state.
Presumably, your executor will pay off your credit card balances and close the accounts. If there is no balance owing on a credit card, the card company will eventually close the account automatically; the same if there is no balance in a bank account. You may have set up automatic charges to your credit card for recurring bill payments. Your executor should be aware of those charges and make provision for the ones that will continue after your death. For example, utility bills and fees to a homeowner association will continue until ownership of the home is transferred.
Some of those credit cards may have unused frequent flyer miles or rewards points balances. Those are a cash asset. On many cards, points can be applied to balances. They may also be donated, but such donations are not tax deductible. If you have a number of credit cards with rewards balances, you may wish to consolidate them now, by trading them on www.points.com. That would make your executor’s job easier when the time comes.
Depending on the way you have set up the accounts, either they will pass directly, or your executor will convert them to estate accounts, thus closing off any attached debit cards. This should be done quickly to minimize the chance of fraudulent use. Also making your executor’s job easier is access to the passwords for your online accounts. If it is only an online account or an out of state account, online access is essential. Forgotten or inaccessible funds will eventually revert to a state unclaimed funds account.
Websites and market-place accounts
If you have monetized your website, there will be a continuing income stream coming into one or more of your bank accounts. If it is from ads, that will end when the site is shut down. If it is from the sale of media, such as merchandise, books, images, music or other downloadables, those are of value to your estate. Determine if you want to continue to offer them for sale, and who will inherit them. That person will need to be willing and able to maintain the site. Sites that you don’t own, but on which you sell merchandise, are included in this category, sites such as Amazon Sellers, Ebay and Etsy.
This is a brief overview of this complex topic. More in a later post. Meanwhile, two websites with good resources are Nolo.com and everplans.com. Most of all, consult a lawyer with expertise in digital asset estate planning.