By Robert H. Louis
Special to the Legal
An article in Estate Planning for Texas Professionals by Gerry W. Beyer and Kerri M. Griffin raises some interesting issues about planning for digital assets, a topic that probably hasn't yet occurred to many estate planners. In our increasingly digital and online world, it might be time to think about this new class of assets.
What are digital assets? The authors define them as "any online account that you own or any file that you store on your computer or that you store in the cloud." (Note to self: cloud?) This includes more familiar accounts like Gmail and Hotmail; sites for storing pictures and videos; online banking and investment accounts; domain names; social networking accounts such as Twitter and LinkedIn; virtual businesses; and other forms of assets mentioned by the authors that, apparently, rarely come to the attention of estate planning lawyers.
Most of these probably have little value, but there are exceptions. The authors mention that the late composer Leonard Bernstein wrote part of his autobiography online and protected it with a password that so far no one has been able to guess, meaning that this work might be lost forever.
Why should one have a plan for digital assets? The authors suggest that knowing what types of accounts a decedent had will make an executor's task easier, and they analogize it to the problems people have in dealing with the things accumulated by hoarders. In addition, having a plan minimizes the chances of identity theft and prevents the loss of any online assets. To the extent that a decedent has "told his/her story" online, that seems worth protecting.
Various online services have their own rules about the ownership of and access to the accounts of a decedent, and the authors provide a helpful summary of those rules for a number of those services. How can estate planners help? It seems unwise to put this information into a will, which eventually becomes a public document, but the authors suggest a separate trust-type document that might contain all of the relevant information plus instructions on what to do with the digital assets. There are also companies, more than a few, that will manage the afterlife of online accounts. Like many new businesses, there should be some concern about the survival of such companies, though.
One of the authors, Beyer, a law professor, has also written extensively on estate planning for pets, another topic that is becoming more important to many individuals. As the nature of the assets that people own and wish to pass on changes, it's important to think about the issues that arise in respect of such assets, and how estate planners can make life, and afterlife, simpler.
Robert H. Louis is a partner and co-chairman of the personal wealth, estates and trusts department at Saul Ewing. His practice includes estate, tax and retirement planning for individuals and closely held businesses. He is a fellow of the American College of Tax Counsel and a graduate of the Wharton School and the Harvard Law School. Louis can be reached at email@example.com and 215-972-7155.