What are digital assets? Do you have digital assets? Are digital assets important to consider with estate planning?
Digital assets are materials owned by a business or individual that can include text, graphic, audio, video, animations, and photos. For business owners, digital properties such as domain names, intellectual property, blogs or even social media content like videos on a YouTube channel can be valuable assets. A digital asset created by an employee of a business is owned by that business; a digital asset that is custom developed by an outside contractor for a business who contracted for and purchased that digital asset is owned by the business. Images that are scanned into a computer are also assets owned by the business or an individual as long as it is an original work; otherwise copyrights or patent rights come into play.
Another definition of a digital asset is: “Some thing that has value, it can be owned, but has no physical presence”. Sounds like a good riddle. For another summary of basic examples see this page at simplicable.com.
Do you have a personal Facebook page or a business page? As of March 2017 statistics show there are over 1.94 billion monthly active Facebook users worldwide. These users all must have an account to log in and use Facebook. As of February 2017 statistics show 65 million Facebook business pages. There are innumerable social medial sites and data storage sites where digital assets can be kept. Facebook is a leader and it is growing all the time, but also consider YouTube, Linked In, Google+, Twitter, Pinterest, Instagram, and Tumbler, among others.
Think about what you post and store on social media sites. Often we do not realize how all-encompassing our digital assets can be. Whether you only keep personal photos, notes or commentary on a site or you have a business page that is marketing and providing product, services and information – what happens to this data and who has access to it after your death?
In Arizona the Revised Uniform Fiduciary Access to Digital Assets Act provides that a user may use an online tool provided by the custodian of a social media site authorizing it to disclose to a designated recipient (or not to disclose) some or all of the user’s digital assets. In cases where such a tool is not provided by the custodian of a site, the user may allow or prohibit in a will, trust, power of attorney or other instrument an authorization to disclose to a fiduciary either some of, or all of, the user’s digital assets. If a user has not affirmatively agreed to specific terms of service at a site, these legal provisions can override any contrary provision in the terms-of-service agreement (A.R.S. § 14-13104).
While this Act well defines the scope of authority and disclosure requirements, the time and expense to enforce it can be problematic over state lines whether you have a court order or simply want to reach and establish access authority with persons who exist somewhere behind layers of technological administrative walls. Have you ever attempted to communicate with a department at Facebook or resolve a problem through its administration channels? Necessity may streamline the process of access by an agent of the user over time as social media and other data storage sites find it is an increasing demand but we are not there yet.
There are resources that promote and provide forms of digital wills but these wills are not recognized in all states. A valid will in Arizona must meet specific statutory requirements; it must be executed under certain criteria. A will in Arizona can contain a provision which provides for a “digital executor” or similar fiduciary and outlines his or her authority; a will in Arizona can also incorporate another document which conveys this authority. Provisions in a will can state who will receive ownership of, access to and control of digital assets, and it can distinguish personal from business assets.
Even with the appointment of a digital executor, another consideration is whether your general executor or personal representative can access all of your paperless accounts and retrieve asset or liability information that no longer come in the mail. A personal representative has obligations to identify assets and liabilities, to make appropriate value assessments, and to manage and pay outstanding creditors. Have you provided your nominee with the information necessary to administer your estate efficiently? Distinguish what information and access your personal representative will need and what information and access a digital executor will need.
When granting authority to a personal representative or a digital executor, each individual will need to be given access to certain log-in and password information or directions on where to locate this information; you certainly do not want to write this information in a will that may become public record. Privacy concerns do not dissipate at death.
You also want to give a digital executor some direction on how you want digital assets managed and/or shut down. If you have a password saver, your executor should have access to that tool; particularly with the frequent and growing requirements to change account passwords on various sites and to use specific types and numbers of characters. Granting an executor or agent authorization to manage digital assets is not an easy task without log-in and password information. Of course, a digital executor or agent must be selected with great care since that person will have access to all of your personal and/or business information but without a digital executor or agent the burden of accessing and managing digital assets can be egregious. Your spouse, a relative or business associate can be delegated these types of responsibilities; you can also authorize more than one person to manage certain assets and/or accounts. You can request or direct under a will that your personal representative authorize a particular person or persons to manage certain digital assets.
Digital assets are important to consider during estate planning. Think of the many safety features installed around all our digital assets. The log-in and passwords for on-line accounts; the code (or fingerprint now) for our phones, the codes for our laptops and computers. If you have not provided someone with information about how to access digital assets, it is likely that those applications and accounts may not be accessed – or that they will be accessed only after the expenditure of much time and effort – and cost to your estate. The battle between privacy and access confronts us in our daily lives; it can be very stringent and aggravating depending on accounts, circumstances and personal preferences. Consider the circumstances that you will leave for family and business, if digital assets are left out of the estate planning equation. Make appropriate plans.