This article from The Economist is a great reminder that among the things we leave behind when we die are our Facebook accounts, email, web pages, photos, downloaded music, and even our brilliantly-written blogs. It makes sense to include provisions about your digital assets in your overall estate plan. You need to consider who should be able to access your various digital accounts and data, and what should be done with that information. Here's another, older, article that sheds some light on this emerging area of estate planning.
If you want to, you can devise your own estate plan without the benefit of lawyers or other trained advisors. All you need is a credit card, a computer, a printer, and access to the Internet, and you can come up with a set of documents that may or may not accomplish what you think they will accomplish. The problem is that you will never know. The ultimate success or the failure of an estate plan is rarely revealed during the lifetime of the planmaker. (No, planmaker is not a real word, but you know what I mean.)
You have seen the commercials. You have heard the radio ads. But before you go to a website to have your estate plan constructed by a computer program, be sure to ask yourself this: Do you really believe that a brilliant lawyer or a highly-paid radio personality who hawks these kinds of programs would trust a website to come up with an estate plan for himself and his family? If it’s not good enough for them, why would it be good enough for you? You may not have as large an estate as Mr. Fancyshmancylawyer or Mr. Radiobucks, but everything you own is everything you own, and it makes a difference to you whether it goes where you want it to go after you are gone. It also makes a difference to you who will make decisions on your behalf if there is ever a time when you can’t make them yourself. Do you want your hand-picked decisionmaker talking with your doctor as you lay there unable to speak, or are you willing to leave it to chance as to who steps up to the plate?
The problem with computer-driven estate plans is that in the real world, more often than not, they don’t work. An effective estate plan involves far more than a set of documents, even very well drawn documents that would stand up in any court in the land. For one thing, wouldn’t it be better to have an estate plan that will help you and your family stay out of court altogether? Going to court is not the end of the world, but it can be a royal pain. It would be better for you and your loved ones if you get your plan right the first time, and if you make sure that it continues to work according to your wishes in light of changes in your health, your stuff, the law, and the list of people you like and trust.
Bottom line: There is a lot of really good information on the Internet. There is also a lot of misinformation. Do you have the training and background to tell one from the other when it comes to putting your estate plan in order? If so, knock yourself out, Professor. If not, there is something to be said for working with live professionals instead of an impersonal website that cares more about your credit card authorization than about what happens to you and your stuff if you become incapacitated or die. For more information about creating an estate plan that works, check out www.est8planning.com.
Although I am neither a member nor a huge fan of the American Bar Association, it does publish some very helpful material. The following is an excerpt from an article by Dennis Kennedy, who is an information technology lawyer and legal technology writer who publishes a monthly column in the ABA Journal. You can find the full text of the article at http://www.abanet.org/lpm/lpt/articles/ftr03103.shtml, and you can find Dennis Kennedy’s blog at www.denniskennedy.com/blog.
The article makes the very good point that in the Internet Age, a whole new set of considerations comes to the fore when we take into account our so-called “digital assets.” Being aware of the concepts in Mr. Kennedy’s article is critical if you own a computer where you store personal information; if you shop online; if you have multiple email, Facebook, or Twitter (or other social networking) accounts; or if you have online access to your financial accounts. If you are reading this, you probably need to be paying attention.
So here’s the excerpt:
Although you will occasionally read articles suggesting that you cover your digital assets explicitly in your will or trust or even create a unique document to cover them, the fact is that most of us do not get around to doing that. Our digital world and our digital assets change on a regular basis. Almost by definition, any document that we create will be out of date when the time comes to use it.
A Simple Five-Step Plan to Manage Your Digital Estate
While I doubt that any of us will be able to put together a foolproof and perfect plan for our digital assets and affairs, the fact is that most of leave our real-world assets and affairs in less than perfect order. However, we at least try to make things easier for our survivors who have to handle our real-world estate. The best we can do is to put things in order as well as we can, pick the right people to handle them, and leave reasonably clear instructions. I suggest that we want to try to do the same things for our digital estates.
Toward that end, I want to recommend a simple five-step plan that you can start on today and then revisit from time to time. In most cases, these steps have real world analogies and I encourage you to think in those terms. Build on what you know.
Step 1. Inventory Your Digital Assets.
I spent a large part of my early legal career as an estate planning lawyer. In the case of either death or incapacity, the first important step is to track down and identify all of the assets, liabilities and other concerns that must be addressed. Once an inventory is created, you can move forward with marshalling and collecting assets, identifying outstanding liabilities and paying them in a timely fashion, and dealing with outstanding issues, such as turning off utilities, canceling credit cards, arranging for storage or disposal and the like.
In the real world, your family and designated successors (personal representative of your estate, trustee of your trust or attorney-in-fact under a durable power of attorney) will be aided immensely by any list of assets and liabilities that you can prepare for them and leave in a place that is easy for them to obtain.
In your digital world, you also want to help your successors by creating an inventory. The more detailed and accurate the better, of course, but even a small start can be of help. Here are some of the things I suggest that you inventory:
At this point, you really want to gather and collect as much information as you can for your inventory. You can work on organizing and prioritizing later.
Step 2. Identify Appropriate Help.
In our estate plans, we typically name a surviving spouse or adult child, especially one with financial savvy, as a personal representative or trustee. That person, however, might well be the worst possible choice for dealing with our digital assets, especially if they are not computer savvy. We also recommend appropriate lawyers, accountants and financial planners to assist our survivors with our financial affairs after our deaths.
You will want to give serious thought to who should be looking into your digital assets on your demise and give thought to naming them in an official capacity in some cases or clearly identifying individuals as “go to” people in other cases. Here’s a simple exercise to help you: Imagine that you have died or are incapacitated. Who do you want to turn on your computer to find out and deal with what’s there? Let them know that and let others know that. If the IT person in your office could assist your surviving spouse, then make it clear that he or she should be engaged to help. A child you might not want making financial decisions might be just the one you want going through your digital world.
I also suggest talking to your estate planning lawyer to see if dealing with your computers and digital assets is something about which he or she has expertise.
Step 3. Provide for Access.
While we are all cautioned never to write down passwords and PIN numbers, the simple fact is that, if we do not do it and keep them in a safe place where they can be found at an appropriate time, no one will be able to access our computers and accounts. This not only can cause delay, frustration and inconvenience, it can also mean that our best friends scattered around the country and world might well find out about our demise weeks after a funeral that they would have wanted to attend.
Unfortunately, as I mentioned earlier, good security means that your passwords are a moving target because you should be changing them on a regular basis. I still think it’s useful to keep a list of passwords in a safe deposit box or other safe place that someone knows about. My old law firm routinely keeps important personal documents of its clients in a vault. Keeping a document with your passwords and other online account information with the other important documents will help your survivors. Another approach might be to tell your lawyer where the password list is kept and let him or her tell your survivors at the appropriate time so that it can be located.
Do not underestimate the difficulties that can arise from passwords. It is possible that some of us now have hundreds of passworded accounts. In most cases, you should be able to eventually get access to accounts with a death certificate and appropriate documentation. That should provide an alternative to the morbid ideas you might have had when I mentioned the thumbprint scanner issue earlier in this article.
Step 4. Provide Instructions.
I started with the story of Andy Olmsted because it is a perfect example of someone who knew what he wanted to happen and gave instructions for that to happen. Most of us will not reach a point where we will sit down and provide detailed instructions unless we face what I used to call when I did estate planning a “focusing event” – both spouses flying on the same plane, going into combat, terminal illness or the like.
There are a number of areas where your survivors would appreciate instructions:
Step 5. Give Appropriate Authority.
For some of us, and this might become more the case as time goes on, it makes sense to designate specific knowledgeable people and provide them with the appropriate authority to manage our digital assets. It might make sense to designate co-attorneys-in-fact, co-executors or co-trustees, where one is specifically tasked with taking the responsibility for our digital assets and affairs. Finding estate planning lawyers who are experienced and knowledgeable in “digital estates” will be essential in certain cases.
In addition, you might look into ways that your online accounts might permit you to designate others to act on your behalf or get added to your accounts. Especially in the cases of people who are not married or in a state where domestic partnerships would help, finding ways to give exactly the people the authority you want to manage your digital affairs will be very important. I expect to see this area continuing to evolve, with many areas of uncertainty.
Tips for Providing Assistance After the Death of Another
It’s also possible that either as a survivor or as a lawyer, you might find yourself in a position where you need to handle someone’s digital affairs. I have a few tips.
Start Thinking About Your Digital Estate Plan Today
The issue of what death means in the digital world has been with us for many years. It really started to come to public attention with the Iraq war, though, especially in terms of access/ownership of e-mail accounts and getting to online banking and other accounts by survivors of soldiers killed in action. Today, our lifetime digital presence has grown exponentially and the issues involved in handling our digital assets and affairs have also grown dramatically. If you take time to work on the five-step plan suggested in this article, ideally in connection with updating your estate plan, you’ll help make things easier for your survivors and improve the chances that your wishes are followed.