In today’s day and age we all have digital assets. Think about it,we use our smart phones for online banking, making purchases from Amazon, communicating either through Facebook, Twitter or LinkedIn.
There is no getting away from the fact that we are living in a digital age. Along with living in a digital age comes the problem of what we do with our digital assets. This month I would like to share with you an article I received from one of our content providers, Merrill Anderson.
Some years ago it was reported that actor Bruce Willis was considering a lawsuit against Apple, Inc., concerning the inheritability of his iTunes collection. A family spokesperson promptly denied the claim. However, an important point was made for the music-consuming public. Very often, when it comes to digital content, what one acquires is a license to use something, not ownership of the thing itself. That license may expire at the purchaser’s death. Songs purchased from iTunes may fall into that category.
“Digital assets” include online accounts, such as banking and credit card accounts, as well as accounts for social networking, online auction houses, and gaming environments such as Second Life and World of Warcraft. Blogs and personal websites are additional types of digital assets.
Although few digital assets have monetary value, they may have sentimental value to family members. Accordingly, it is important to consider digital assets in estate planning. That means creating an inventory of the assets together with the passwords needed to access them and manage them.
Planning for digital assets provides these benefits, among others:
• Makes life easier for the estate’s executor and the family members.
• Prevents theft of the decedent’s identity.
• Prevents theft of content, such as blog posts and personal websites.
• Avoids losing the deceased’s story.
• Secures valuable estate assets.
Reportedly, Leonard Bernstein wrote a memoir entitled Blue Ink. At his death there was no printed copy, just an electronic file on his computer. The file was password protected; no one knew the password; and to this day no one has been able to break the code. This potentially valuable asset may, therefore, be lost.
Once the inventory and passwords are collected, they should be memorialized on paper in a separate document. The information should not be included in the will, because a will becomes a public document. That would be the worst place for passwords and sensitive information.
Another approach is to create a revocable trust for ownership of digital assets. The trust ownership of assets will continue beyond the life of the grantor. This approach might be the answer for which Bruce Willis was looking. However, the idea hasn’t been tested in the courts, and the terms of each license would have to be reviewed to learn of potential conflicts and pitfalls.
Wishing you all the best during this holiday season,