As the world has become increasingly digital, nearly all of our clients now own certain “virtual” assets, including e-mail accounts, data saved on smartphones, tablets and personal computers (such as photos, videos, or music files), online sales accounts (through websites such as PayPal, Etsy or Ebay), webpages, domain names, blogs, and social networking accounts (for example, through Facebook, LinkedIn or Twitter). Ownership of these types of virtual assets raises important estate planning issues that require careful consideration. This Article briefly addresses two of these issues.
(1) How, and to what extent, should one’s estate plan be constructed or modified to account for ownership of virtual assets?
Many virtual assets have no marketable value and are appropriately terminated or deleted upon the death of an owner (or shortly thereafter), such as personal e-mail accounts or social networking accounts. It is unnecessary to consider whether a revocable trust should be “funded” with these types of virtual assets by re-registering ownership of them. Indeed, many types of virtual assets cannot be owned by anyone other than a natural person. Other virtual assets, though, may hold considerable monetary value, such as blogs, web pages, domain names, or online sales accounts. Like any other asset of monetary value, it is important to review the manner in which these assets are registered in order to ensure the private, efficient and predictable transfer of ownership upon the owner’s death, and to ensure that these assets are owned in a way that takes advantage of estate tax planning opportunities. If you own any virtual assets that you think may hold monetary value, I encourage you to contact any of the estate planning attorneys at our Firm to discuss whether or not you should fund a revocable trust with these assets, or if other means of ownership, such as through the use of a limited liability company, would be advantageous.
(2) What planning should to be done in order to ensure that during incapacity or after one’s death, loved ones know where and how to access one’s electronic records?
Regardless of whether or not one owns any virtual assets of monetary value, many of our clients have gone “paperless” and rely upon the internet to access important, personal financial information, such as statements for banking, investment, and retirement accounts. If the financial agent designated in your Power of Attorney and your survivors do not know how to access your accounts, the handling of your financial affairs during life and administration of your Trust/Estate after death can become difficult, cumbersome and expensive. Therefore, it is crucial that you provide a way for your loved ones to access your personal financial data that is stored online.
There are several ways to ensure that your loved ones have access to this important financial data. The first, and simplest, is to make an inventory of your online accounts, and your usernames and passwords for each, and to store this list on a password-protected USB drive or in a safe place in your home (of course, your financial agent, personal representative, or successor Trustee of your Trust must know where and how to access the USB or printed information). There is also free online software that can be utilized to store passwords, such as KeePass (www.keepass.info) or Web Confidential (www.web-confidential.com, for Mac users only). For those seeking more sophisticated means to store important electronic data, online storage accounts such as www.legacylocker.com, www.mypersonaldatasafe.comand www.entrustet.com charge a monthly or annual fee to create a virtual “safe” with important electronic documents, usernames and passwords to accounts. Customers can provide tailored instructions that grant loved ones’ access to documents upon the customer’s death or disability. Other unique services, such as www.deathswitch.com and www.assetlock.net, allow you to set triggers that release pre-scripted, personalized messages or other data to loved ones via e-mail. In a technological world in which the only constant is change, one can expect the options for storage of electronic data to increase in number and sophistication.
All of us at in the Probate and Estate Planning Department encourage you to review your estate plan and give consideration to the issues discussed in this Article, and we encourage you to contact Attorneys Tom Pillari (440-695-8035 or firstname.lastname@example.org), Dave Wiersma (440-695-8030 or email@example.com), John Frankel (419-627-3115 or firstname.lastname@example.org), or T.J. Pillari (440-695-8039 or email@example.com) to discuss these matters in greater detail, tailored to your specific planning needs.