When it comes to planning for digital assets, most people figure that when they die their digital assets (user names, passwords, profiles, etc) die with them. But the sad truths are these: many of us will lose our mental capacity to age or illness before we lose our lives; and when we lose either our mental capacity or our lives, our digital assets are left behind unattended. In this digital age, we need to think about appointing a successor trustee to care for our digital assets so as to prevent identity theft and fraud.
What digital assets do most people have? Here is a partial list of the most popular:
- email accounts(s)
- online banking access
- online credit card access, including the scheduling of recurring payments
- online password to access your retirement accounts that allow you to change your asset allocation and your distribution schedule
- online photos on sites like Flickr
- online password to reach your investment accounts, including setting up recurring investments, or choosing between a dividend payout or dividend reinvestment
- an online business
- accounts on online auction sites
- a PayPal account
- a personal or business website, or both
- a blog or other social media site.
Because Wills are public documents, you may not want to include a list of your digital assets as part of your Will. In any case, a Will is an end-of-life document. Many of us -- and our families -- will have to deal with mental incapacity long before we die. So we need a strategy that takes into account this growing reality.
One strategy is to include a list of your digital assets as part of a revocable living trust. In contrast to a Will, a revocable living trust is a private document. While you are alive and in possession of your faculties, you maintain control of your digital assets and you are free to update your list with additions and deletions. As part of your living trust, you can include instructions for your successor trustee as to the disposition of each of your digital assets. Perhaps you will want your business email to be available to your business partner or successor to ensure a smooth transition. Perhaps you want your online photo albums to be given to your children or grandchildren to preserve the family legacy.
At the time of your death or mental incapacity, your revocable living trust becomes irrevocable, meaning that no changes can be made to the trust "corpus," or contents, at that point. Your successor trustee then executes the plan outlined in the trust for the disposition of your digital assets as part of your living trust.
If you would like to discuss your own personal situation with me, or how a revocable living trust for your digital assets can be tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.
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