As an estate planning professional you’ve honed your skills helping clients make important decisions about distributing valuable assets to beneficiaries and heirs. Traditional assets such as financial accounts, personal and real property, and life insurance are easily remembered and accounted for in wills and trusts. There is a new generation of clients and their adoption of digital technology into daily life has created a new class of personal assets that is ignored or omitted by most wills or trusts. These “digital assets” are invisible, intangible, and often stored in the cloud, but they hold a sentimental and sometimes surprising monetary value that cannot be neglected by an executor.
Ask your client about their digital assets
Most clients never think about the digital “footprint” they’ve created over the past thirty years. Perhaps because online services such as email, photo storage, and social networking, are ubiquitous and free, there is little or no perceived value by the asset owner. At your next estate planning meeting ask your client if they have any digital assets that need to be included in their estate plan. With the quizzical look still on their faces, ask if they use any of the aforementioned online services. Continue with questions about online financial accounts (banking, investments, e-payment), and loyalty reward programs (airlines, hotels, and credit cards). How about any registered domain names (think GoDaddy), online product sales (photos, arts and crafts, auctions, self-published books), popular blogs, or digital currency wallets (think Bitcoin)? This should be an “aha!” moment for many people as they realize that the online services they frequently use come with no guarantee to preserve any content or information they have uploaded. In fact, the terms of service agreements that they agreed to when they signed up for an account may specifically prohibit third-party access even if the owner chooses to share their usernames and passwords.
Can your client's executor document and settle a digital estate?
Now that you have your client’s attention, you’ll likely admonish them to create a digital asset inventory and specify how each asset should be handled upon their death, ask if their estate executor has the ability to deal with their digital estate or if they should consider naming a digital executor, maintain an up-to-date document listing all of their usernames and passwords, and of course finish with “backup!”. We have finally reached the reasons you haven’t had this conversation with many of your clients. For most clients it will be too “techy” and complicated to self-navigate through all of the issues and questions. If a client does express interest in addressing this hole in their estate plan, who will help them solve it? Few firms offer “digital executor” services that will step clients through the digital estate aspect of their estate planning.
Digital executor service companies can provide a solution
What’s the best solution to include your client’s digital estate in their will or trust? Our next post covers digital asset protection and a new class of company that provides digital executor services to help your client understand their digital estate and take the steps needed to identify and create a digital asset report that you can include with their estate plan.
Suggested reading:
Digital Assets and Fiduciaries Naomi Cahn, Christina Kunz & Suzanne Brown Walsh
Web Meets the Will: Estate Planning for Digital Assets Gerry W. Beyer
The Digital Death Conundrum James Lamm, Christina Kunz, Damien Riehl & Peter Rademacher
