By Attorney Maria Baler (June 2012)

Digital assets are adding a new dimension to estate planning for estate planners and their clients alike. What are digital assets? They have been formally defined as online accounts or files stored on your computer or in the cloud. Examples include anything you use a device to access — your Facebook page, blog, Twitter or LinkedIn account, web site, e-mail accounts, online photo storage, online document storage, YouTube videos, domain names, online banking, shopping and investment accounts, online medical information, and online subscriptions or memberships.

These “assets” are something we use every day to conduct our financial affairs, communicate with friends and family, and store important information. Estate planners are increasingly discussing with clients how to handle their digital assets as part of the planning process. What would you want to happen to these assets if you died or were incapacitated? Who should be able to access these assets under those circumstances? These are just a couple of the decisions that must be made when planning for your digital assets.

Here are five questions to consider when incorporating planning for your digital assets into your estate plan:

1. What are your Digital Assets and where are they located?

For many, it is no longer possible to point your heirs to a filing cabinet and tell them everything they need to know is contained within. Increasingly, the most important and current information about your personal and financial life is stored online. An important part of planning for digital assets is to create an inventory of these assets that your successors can use as a starting point, and to keep that inventory up to date. Consider listing assets by category in your inventory, such as hardware, software, social media and online presence, and online accounts. Your hardware inventory should include a list of the hardware you use (desktops, tablets, laptops, flash drives, backup drives, digital cameras, iPods, smart phones, DVDs, CDs) and the files or folders on these devices that contain important information. A software inventory should contain a list of the software programs you use to store financial or personal information, financial records, and tax returns, and the files or folders where information you have created using these programs can be located. Your inventory should also contain a list of websites, blogs, social media accounts, and online sites where you back up files or store documents or photos, your online banking and investment accounts, bills that are delivered and paid electronically from your accounts, online shopping accounts or PayPal where credit card information may be stored, and your e-mail accounts.

2. Who should have access to these Assets?

It is important to identify a person who can access and carry out your instructions as to your digital assets after death. This should be someone who is knowledgeable about computers and online accounts, social media, and other aspects of an online presence. This person may or may not be named to any official capacity in your documents. They could serve as a co-attorney-in-fact or co-Personal Representative with specific authority to deal with digital assets, or they could serve as an informal assistant and advisor to your attorney-in-fact or Personal Representative, working with them to identify and deal with your digital assets.

If you have digital assets that contain sensitive and personal items, such as a journal or private emails, consider who may be the appropriate person to access these items and either delete them or deliver them to the appropriate recipient.

It is important that the person who accesses your accounts has proper authority to do so. Some sites prohibit accessing the account of another user, and violating this term of service can cause the account to be terminated and the contents stored in a place where only the service provider has access.

3. How will your designated person obtain access?

Site domain names and your username and password will be necessary to obtain access to your digital assets. Having this information is the key to giving another person the ability to access these assets. We are repeatedly told that to ensure the security of our online presence it is important to keep usernames and passwords secure and secret. However, in order for someone to gain access to these assets upon your death or incapacity this information will need to be available. Consider keeping a hard copy list of usernames, passwords and PIN numbers, and being vigilant about updating the list when you change them. Keep this list in a safe place – such as with your attorney – to be given to the designated person(s) at the appropriate time. Another option is to keep this list in a computer in a password-protected file, and give your attorney or other designated person the password to access that file.

4. What do you want done with your digital assets?

Even if your digital assets can be located and accessed, your survivors will need to know what you want done with these assets. Consider whether or not you want your social media or e-mail accounts used to notify your friends, connections or followers of your death. Realistically, this may be the easiest and quickest way for your survivors to notify friends and family members of funeral arrangements. Do you want your Facebook account taken down, or continued after your death as a place where friends and family can post remembrances? Do you want anyone to respond to posts or have the ability to remove them? Do you want a website or blog to be taken down after you die or to continue? Do you want a copy of your website made and stored before it is taken down? Do you want any pictures or videos stored on a Facebook or online photo site to be saved before it is shut down? Are there important items such as photos or documents stored on your computer or other device that should not be deleted, but instead passed on to designated family members or friends?

5. Will the law and the service providers cooperate?

In 2005 and 2007 respectively, Connecticut and Rhode Island passed laws governing access to e-mail accounts. In 2007, an Indiana law governed access to electronically stored documents. In 2010 Oklahoma became the first state to pass a law granting executors broad power to deal with a deceased’s digital assets, and Idaho followed suit in 2011. This year, Nebraska and Oregon are considering similar legislation and other states will eventually do so as well. However, until this happens, without any clear direction in state law there could be issues in trying to access digital assets after death.

Many social media sites already have policies about how accounts are handled after the death of a user. A few require a court order to access an account. Some of these policies contain time frames in which an account must be properly accessed after the death of a user or it will be deleted. Those policies must be considered when deciding how to handle your specific digital assets to ensure the person you designate will be given access at the appropriate time and without delay.

Given the information and memories stored online, your digital assets may be some of your most valuable assets. Take some time to consider these issues and incorporate planning for your digital assets into your estate plan when it is next updated. In the meantime, begin to work on an inventory of these assets, and keep it up to date!

Attorney Maria Baler is an estate planning and elder law attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC. She is also a director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.