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The AR Group

Estate Planning in the 21st Century ? Digital Property

By Jeanette Eirich

Most people have considered or been advised about the wisdom of estate planning to ensure that property owned at the time of passing is distributed according to the deceased’s wishes, in addition to addressing estate tax and probate issues.? When thinking of bequeathing assets, the majority of individuals consider only tangible property such as who should have the family jewels or the family home or financial accounts such as retirements and insurance policies.? Few folks give any real thought to what happens to digital property, and these days, just about everyone should.

As of January 2014, Facebook logged over one billion users, Twitter reported “about a billion” users and LinkedIn had over 250 million users. ??Other social media channels include Pinterest, Flickr, Instagram, YouTube, Tumblr, and Slideshare.? Together, just the social media world creates unimaginable volumes of data, pictures and videos.? But what happens to a person’s digital property, accounts, pictures, videos, and more when he passes?? Many of these items may contain Copyright interests.? Many family records migrate to cyberspace and it is important to consider how your digital legacy will remain into the future.? Estate planning for a digital estate should consider the execution, access and distribution of digital property; the transfer of online accounts and how any private information or content is to be shared or managed.

Unlike physical media, which is traditionally and easily passed to heirs, digital media inheritance, like many areas of law, has failed to keep up with technological advancements.? Today, millions of people download music, book and movie content digitally.? Matters are further complicated when such digital property is not saved to hard drives but stored in cloud drives and other remote servers.? Most content sellers, including giants like iTunes and Amazon, have yet to even address transfer-on-death policies.? The matter can be complicated and has yet to affect significant numbers of customers.? That will change as more digital age users pass and heirs seek to inherit digital property.

At least three states, Idaho, Nebraska and Indiana, have passed legislation to allow heirs to gain access to digital accounts.? Other states are considering such legislation. But for now, nearly all online services prohibit the transfer of accounts from one individual to another, even after death, and the service provided terminates upon an individual’s death resulting in the loss of years of photographs, videos and text files. As a practical matter, everyone should keep a “digital register” which records all passwords and online accounts/addresses which is maintained securely and provided upon death through a bequest or other arrangements.? Recently, inheritance services have emerged providing a secure place to store documents and passwords to be passed on to a designated beneficiary upon the account owner’s death.

Digital property may be stored locally on various external drives or online backup services.? Access information should be included with estate planning information.? Alternatively, one may periodically download and archive all digital files (photos, tweets, videos etc.) and keep them on a removable storage disk for safe-keeping.? Upon death, a bequest is made of only the storage discs with a request that all online accounts be terminated.

SMART TIP:? ??Because the law is still catching up with technology, the best planning is to be prepared and account for your digital legacy to avoid loss of years of work and untold money invested in digital media and other digital property.