There is a legal conundrum that estate planning attorneys face when it comes to digital assets. It is an issue that did not exist 20 years ago, but it is one that has emerged and will continue to expand the more we create our own personal digital worlds. Bank account information, bills, 401k accounts, insurance, photographs, digital objects that we create, have all become an essential part of tracking and storing information. The prevalence of digital assets has created a pain point for estate planning attorneys in which we are forced to chose between protecting a clients privacy and protecting the assets in their estate.
Telling our clients to provide a list of usernames and passwords for their agents would provide the easiest way to ensure that their agent has access when needed without jumping through the hoops required to get access to those accounts from the provider. However, that is prohibited by the user agreements that people sign when they create an online account. To gain access to an online "asset" is time-consuming, aggravating, and often fruitless. Assuming it is possible, it takes a lot of time (and money) to accomplish this feat. This is because the companies who control the data are very concerned about privacy. So the conundrum is that estate planning lawyers are stuck between wanting to protect client privacy and wanting to save the client's funds during the administration process. If we recommend that you write down a list of usernames and passwords there becomes an issue because it can compromise your privacy and security. If we recommend that you protect your privacy to the highest degree it runs contrary to our goal of making the administration of your estate as easy as possible. We know that anytime, anyone has to administer an estate it is a time of great stress and grief, and our goal is to make that process easier for any person in charge of administering an estate.
So, what is to be done? Some individuals chose to have a company like Directive Communication Systems to keep track of all of their digital assets. This does simplify things a bit, but it costs money and the user is responsible for updating the account information. If you have some technical savvy under your belt an encrypted thumb drive can serve the same purpose. You will still be responsible for updating account passwords or adding new accounts to the thumb drive, but your privacy will be protected and you will only need to provide your agent with one password. However, as mentioned before, this is likely not in compliance with the user agreement signed at the formation of the account. The need to provide access to the accounts you want your family to have access to is becoming more important to individuals and companies since there is now legislation underway to make password sharing illegal. If this becomes law, providing access to your digital assets, specifically assets that comprise your personal property, will become even more problematic and the need for digital estate planning as part of your general estate plan will become more of a necessity. Digital estate planning is still an emerging concept and will continue to evolve as our digital lives evolve.
Later on this month I will be discussing the emergence of this new area of estate planning.