With the rapid advancements in information technology, comes the increase in a person’s digital presence and the creation of a new category of personal property; the digital asset.
The use of filing cabinets or bank safety deposit boxes to store a person’s important information and documentation in paper form is fast becoming a thing of the past. Instead, the majority of us are storing this information and documentation in digital form, either on a hard drive or similar device or through online storage options in the “cloud”; for example, Dropbox.
Not only do we store our personal information digitally, it is becoming an increasingly common business practice to store our business and financial information online, secured by usernames and passwords.
So whilst we are currently creating new digital assets at an unprecedented rate, the law that governs these intangible assets is lagging behind. It is therefore, essential that you turn your mind to your digital assets when making a Will.
So what is a digital asset and why is it important?
A digital asset is anything you have rights over that exists online or in digital form including online email accounts, hard storage devices, social networking accounts including Facebook, Twitter, LinkedIn and other similar sites, online banking, PayPal and other online shopping accounts, electronic libraries and/or financial accounts.
These assets can be of sentimental value only like photographs and videos or, in the case of domain names and business information and contacts, can represent a considerably valuable asset of your estate.
So how do we manage these assets?
With the increase in digital asset ownership, it is becoming increasingly important that when establishing an estate plan, you consider how these assets will be dealt with after your death.
In order to manage your online presence and your digital assets you need to consider implementing the following steps:
Step 1 – Identify your digital assets and make a list
Make a list of your digital assets which could include the following:
- The devices themselves such as computers, external hard drives, tablets, smart phones, e-readers and other digital devices
- Information stored electronically whether on a physical device like a hard drive or stored online in the “cloud”
- Any online accounts including email, social media, video gaming, online storage accounts, websites, blogs and online photo or video sharing accounts
- Domain names
- Intellectual property including copyrighted materials, trademarks, etc
Step 2 – Decide what you want to happen to your digital assets
You will then need to consider what you want to happen to each asset. For instance, some assets you would want saved, archived or printed and stored, whilst others could be deleted. You may also wish to transfer assets to your family members, friends or business partners now or through your Will.
It is a good idea to write down instructions for each item on your list of digital assets explaining what you would like to happen to each asset.
Step 3 – Storage of the information relating to your digital assets
Once you have identified your digital assets and decided how each asset will be dealt with after your death, you would then record the usernames, passwords and secret questions attached to each individual asset.
This information can either be stored securely in a safe or bank safety deposit box, or the information can be imparted to your executor/trustee or attorney. Alternatively, the information can be stored with an online storage service but of course, this in itself will likely have access passwords.
Sharing the information in order to access these assets becomes increasingly important when considering assets like online music libraries where you are granted a licence over the songs and not ownership; for example when downloading music from iTunes. Whilst you may consider a list of your favourite songs inconsequential, this list may have sentimental value to your loved ones.
Step 4 – Make your instructions legal
Have your Will professionally drafted by a lawyer experienced in Wills and Estate Planning.