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The KRASA LAW, Inc. Estate Planning Blog

Friday, December 27, 2013

21st Century Estate Planning: Your Digital Self

The estate plans I draft are known to be long, comprehensive, and detailed.  When I present my clients with large binders that contain the various elements of their estate plans – a revocable living trust, wills, power of attorney documents, health care documents, and trust funding documents – they are surprised that their “simple” estates would require so much paperwork.  However, the necessary components to a complete estate plan are numerous and are constantly growing.

The most recent document I added to the estate planning binders I prepare for my clients is a document that often produces a chuckle: “Assignment of Online Assets and Digital Property.”  Although at first it might sound like a silly superfluous extra step, planning for digital property is the next frontier in estate planning and is becoming a bigger issue every day.

A case that brought attention to the obstacles of accessing the digital property of a decedent involved a young soldier who was killed in Iraq.  His parents attempted to access his email account and the email host denied access.  The parents were forced to bring the matter before court and eventually the email host agreed to provide a transcript of the soldier’s email account but never provided full access. 

In addition to email, digital property includes social networking accounts; information contained on computers, tablets, cell phones, hard drives, and cloud service providers; voicemail accounts; digital music accounts including iTunes; web pages and blogs; domain names; online sales accounts such as PayPal and eBay; and digital intellectual property rights.  The inability of successor trustees, executors, power of attorney agents, or other fiduciaries to access this digital property upon incapacity or death can cause major delay and expense and can frustrate the efficient management and settlement of an estate. 

Part of the problem is that technology is far more advanced than the law.  There does not yet exist an agreed upon set of legal rules to adequately deal with access to a decedent’s or incapacitated person’s digital property.  Every digital host has its own set of policies and laws regarding digital property that are in existence inadvertently provide road blocks to fiduciaries from accessing an incapacitated or deceased person’s digital property.  Although the disparate rules and policies produce a “wild west” of legal procedures, there are steps that can be taken to attempt to make the process smoother. 

First, it is important that both the revocable living trust and the durable general power of attorney include clauses that specifically give the successor trustee and power of attorney agent access to digital property.  The clauses should be detailed, provide examples of digital property, and describe the powers related to digital property with specificity.

Second, just as it is important to transfer bank accounts, stocks, bonds, and real property to a revocable living trust, it is also important to transfer digital property to the revocable living trust by executing an assignment.

Third, it is prudent to make a comprehensive list of your digital property including usernames and passwords.  This “master list” can be stored in a safe deposit box to which your successor trustees and power of attorney agents have access.  The “master list” will likely need to be constantly updated and it could be a full time job to ensure that the information is accurate.  An alternative is to use a website such as LegalVault which allows you to store all of your online passwords in a single database and allows you to name those persons who should have post-death access to such information.  In addition, there are online services such as Death Switch which will automatically email persons of your choice information necessary to access your digital property upon your death.

It might seem overwhelming to plan with such detail all the elements of your estate, including your digital property.  It is tempting to dismiss the need to address the issue of access to your digital property as unnecessary.  However, as digital property becomes a more significant aspect of a typical estate, the issue of access to such digital property will inevitably become a bigger problem.  Without a set of legal rules that adequately addresses this issue, assuming the responsibility to address these issues to the greatest extent possible through your estate planning is essential.


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KRASA LAW assists clients with Estate Planning, Elder Law, Pet Trusts, Asset Protection, Special Needs Planning and Probate / Estate Administration in Pacific Grove, CA(93950), Monterey (93944, 93940, 93943, 93942), Salinas (93901, 93905, 93906, 93907), Hollister (95023,95023) Pebble Beach (93953), Carmel By The Sea (93921), Seaside (93955) and Carmel (93923, 93922) in Monterey County and San Benito California.

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