Most people realize they need to protect their tangible assets such as houses, cash, investments, and personal property from the probate process. However, few remember to account for their digital property, which can be quite valuable.
Think of your iTunes account, Dropbox files and other cloud storage, online magazine subscriptions, e-books, games, and even email accounts. These assets are often overlooked during the estate planning process, but they can represent thousands of dollars in cash value, not to mention their infinite emotional worth. Who has rights to access those items after you pass away?
Recently the Wall Street Journal published an article regarding the importance of planning one’s digital estate. It states that, while only 5 states provide a direct solution to this issue via fiduciary laws, most states are behind the curve in legislation. Several other states have proposals but no laws on the books. California is one state with no digital estate statutes.
So, how can you help to ease the transfer of your online assets?
Estate planning experts recommend placing the licenses to your online accounts, as well as passwords to access them, into a living trust. Remember, living trusts are usually private, but wills can be made public very easily. Never list your account information in a will. I would typically advise against listing sensitive information in your living trust either. Instead, make a list of your online accounts, include the current login information, and seal it in an envelope addressed to your successor trustee. Store the envelope together with your other estate planning documents in a safe place, and never share the envelope with others during your lifetime. Every year or so, review the letter to make sure it is current.
This information is just a start, and it should not be considered to be legal advice. If you’d like more information about safely transferring your digital wealth of music, photos, connections, and information, please speak with an estate planning lawyer.