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Estate Planning Should Include Digital Assets

The legal field is still playing catch up when it comes to laws and regulations governing what happens to online accounts after someone dies, and user-service agreements and privacy laws can make gaining access to these accounts even more difficult. Digital accounts can include website domain names, emails, online bank accounts, documents in cloud storage and social media accounts, and even though these are housed on the Internet, they do have value, sometimes financial and other times sentimental.

According to a 2011 survey, the average value of an American’s digital assets is almost $55,000. This includes online financial accounts like Bitcoin and Paypal, as well as iTunes and the like. One of the major problems with these types of assets is that beneficiaries may not even know these accounts exist. Maintaining a list of all digital accounts can help ensure heirs are able to properly identify and include all parts of the estate.

The other problem heirs encounter when digital assets are not included in an estate plan is gaining access to these accounts. Even if the passwords are known, the user-service agreements can keep surviving family members from accessing accounts that may hold family pictures, a business website or important online documents.

The best way to protect assets is to ensure that they are properly included in a will or trust, making clear who is to be provided access to which accounts. Leaving the location of a master list of passwords is also important. Even with these provisions, however, some accounts can still be stuck in limbo if the Terms of Service agreement states that they are nontransferable, and an estate planning attorney can give recommendations to Massachusetts residents on how to protect these assets until the law catches up to the technology.

Source: USA Today, “Estate plan should pass down digital heirlooms” Sue Doerfler, The Arizona Republic, Apr. 17, 2014

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