Like many people, you likely have at least some “digital assets” — electronic material and accounts that can only be accessed and used from a computer, cell phone, or tablet. These assets could be email accounts, photos on Flickr, personal information and communication accounts on sites like Facebook and Twitter, and game accounts where you have compiled points or acquired “virtual” possessions like the livestock animations on Farmville or enhanced character abilities on EverQuest. You may even own a salable blog, website, or unused domain name. So who will inherit this digital material when you die? How will they access it? Fortunately, these issues can be handled as part of preparing or updating your living trust at San Diego Law Firm.
Name Inheritors in Your Living Trust
Digital assets defined: “Digital assets” means any type of valued material that you can only access electronically with a username and password. The phrase does not refer to real-world monetary assets, such as bank and stock accounts, or credit card and other debts, even if you can use a username and password to view balances, make payments, or transfer funds. It only refers to purely electronic information, data, and possessions.
Do not list in will: It is not a good idea to provide any detailed information about your digital assets in a will. Because a will ends up being filed in probate court and is accessible by the public, adding detailed info could create a risk of identity theft.
Use living trust and separate access lists: The ideal alternative is to use a living trust and separate access lists that are referenced in the trust. In the living trust document, list the categories of your digital assets — such as computer or tablet program accounts, electronic book accounts, game accounts, email accounts, photo accounts, social networking accounts — along with the name of the person or persons you want to inherit the assets in each category. If you want the inheritor to do something specific with an account, such as provide other persons with copies of photos, or save copies of your blog postings for children or grandchildren, explain your wishes in your living trust. Make a separate access list for financial accounts.
Keep an Updated Access List of Digital Asset Accounts, Usernames and Passwords
Keep digital asset access list: Keep a separate “digital asset access list” of your digital accounts with usernames and passwords, and update it as often as you need to. This list should also include any username and password needed to access your desktop computer, laptop, and cell phone. You should give a copy of the current digital asset access list, with the current date prominent at the top, to your San Diego Law Firm attorney to place in his or her file with your living trust. You should also keep a copy of the updated list in your safety deposit box and at your home in a fireproof safe or lockbox to which your spouse or domestic partner also has a key.
No notification of death: Many accounts, such as Gmail and Facebook, prohibit access by any person other than the one who set up the account, and make no provisions for inheritors to access accounts after death. For this reason, it is advisable to add a specific instruction to your living trust and to your digital asset access list that no digital asset account providers are to be notified of your death, and that instead you want all digital assets and information contained in the accounts to be accessed and, depending on the account, either the account contact information changed to that of the inheritor, or if that is not possible, the assets transferred to the inheritor or the information saved and given to the inheritor, and the account closed. Otherwise, the inheritors can face an expensive battle in probate court to gain access to these accounts.
Financial Account Usernames and Passwords Must be Handled Separately
Not digital assets: Monetary assets in bank and brokerage accounts, credit accounts like charge cards, payment processing methods like PayPal, and customer accounts at online stores like Amazon are not digital assets. Usernames and passwords for these accounts simply provide an additional way to access funds and charges information, process charges, and buy goods and services.
Keep separate financial access list: Usernames and passwords for financial assets, credit, payment processing, and store accounts should be kept on a separate dated financial access list in your will and trust file at your attorney’s office. A copy of this list can also be placed in your safety deposit box and at your home in a fireproof box to which your spouse or domestic partner also has a key. Because all assets and debts become part of your estate when you die and must be tracked for purposes of estate tax and income tax returns, bank and brokerage accounts must be handled as required by law through probate or living trust administration, and any credit card charges must be paid before any assets can be distributed from your estate.
Immediately change email account: It is a good idea to instruct your executor / administrator to immediately set up a new paid email account at a site like usa.net for the sole purpose of continuing to receive your financial account notices, including notices for payment processing and merchant accounts like PayPal and Authorize.net. The executor should be asked to change the email address on all financial accounts to the new address immediately, to prevent anyone from fraudulently accessing your financial accounts once you are gone.
Customer purchasing accounts: Your customer accounts at stores that do not contain any digital assets (such as electronic books) will need to be closed or transferred into the sole name of your spouse or domestic partner. Accounts with digital assets in them should be handled as explained below.
Name a Digital Assets Executor/ Administrator
Name digital executor: If the person whom you have named to act as your executor or estate administrator is not technically savvy, you should also name a trusted person who meets that criterion to act as your digital assets executor or administrator. If the estate executor or administrator requires, this person can assist them in changing the email addresses for financial accounts to the new email address; otherwise, this should not be part of the digital assets executor/administrator’s tasks.
Transfer assets to inheritors: The digital executor should be instructed to get the access list of digital assets (but not the one of financial accounts) from your attorney and to transfer the digital assets to the inheritors you have named.
Electronic books: Electronic books that have been purchased for a tablet, such as electronic books for Amazon’s Kindle, Barnes and Noble’s Nook, or for the iPad, generally cannot be inherited, returned, or sold. Instead, the executor should remove the credit card or banking account information on file with each such vendor, change the account owner’s name, street address and email address for that book vendor to those of the inheritor of the device, and change the username (if possible) and password. Any steps beyond that should be left up to the inheritor. It is not necessary for your estate to become involved in a dispute with an heir who wants to continue using your reading device with its books intact. If you have multiple devices tied to the same book vendor account, though, you should name a single inheritor for that book vendor. Otherwise, one inheritor will get a device with books with the new account username and password tied to their own personal account information, and any others will get only their device with no books.
Computer programs: Computer programs that have been licensed and installed on a phone, tablet or computer generally cannot be removed from that device and reinstalled elsewhere. The same is true with stock photos or illustrations that have been licensed from a vendor like istockphoto.com. For accounts with vendors of these items, your executor should again remove credit card or bank account information, change the account owner’s name (if possible), street address and email address to that of the inheritor, and change the username (if possible) and password. Then the tablet or computer can be given to the inheritor with the new username and password and a notation as to their email account associated with that vendor (as some inheritors may have more than one email account).
Games: Games purchased for some gaming devices like GameBoy can be sold or inherited. Likewise, some online game assets, such as those acquired for EverQuest, can be sold or traded; others, like livestock illustrations on Farmville, cannot presently be transferred. The information for these accounts should again be changed as per the book instructions, above. However, some game accounts, such as those at Farmville, as of this writing are tied to social networking accounts such as Facebook which the digital executor will close. If so, the digital executor should arrange for the sale to a third party, or transfer to the inheritor, of any transferrable game assets, and after notice to the inheritor, close those game accounts. The non-transferrable game assets will be unavoidably lost.
Nonsalable creative material: For accounts to which you have uploaded your non-salable creative material, such as blog posts, photos, illustrations, or coding suggestions, your digital executor can download the material to a computer and copy (burn) the information files to a DVD or flash drive. Once the inheritors have confirmed that they have received their DVD or flash drive and can open it and access or view the digital assets, the accounts should be closed.
Salable digital assets: If you have created a salable and valuable asset, such as a popular blog, website, or short computer program for websites, or own the license to a valuable unused domain name, you should provide separate instructions for selling this item and returning the sales price received, along with proof of the payment amount, to the office of your probate attorney or living trust attorney at San Diego Law Firm, and to your estate executor / administrator.
Avoid Relying on Online Digital Asset Tracking Services
There are nearly a dozen websites at this writing that offer to let you set up and store all of your usernames and passwords along with various other information you might want your inheritors to have. All of these websites have the same problem: there is no way to ensure that their operators will still be in business when you die. There is also no way to ensure that the data you save on them will be completely hacker-proof. For this reason, San Diego Law Firm does not recommend relying on online asset tracking services.
Call San Diego Law Firm for Living Trusts that Protect Your Digital Assets
San Diego Law Firm is a paperless law firm that keeps all files in an electronic format with continuous off-site backup. We are comfortable and familiar with handling, accessing, and safeguarding all types of digital assets, and our experienced will, living trust, and probate attorneys can easily tailor your living trust to protect your digital assets from loss after you die to the full extent possible. We offer fixed fees for all of our will, living trust, probate, and living trust administration services once we know what your situation requires, and we offer evening hours so you can see us without taking time off from work. Please call us for an appointment at (619) 794-0243. We look forward to helping you.