California considers the digital accounts you maintain and access through your computer, smartphone or tablet to be no different from the tangible personal property you own, such as cars and jewelry.
You have the ability to control what happens to these digital assets after you die, but you need to take specific actions to ensure that your wishes are followed.
Steps for controlling digital assets
The first step is to create an inventory. Given the scope of online presence that most people have these days, it might be helpful to categorize your digital assets. Here are some examples:
• Online data storage accounts (Dropbox, iCloud)
• Local data storage devices (computers, phones, tablets)
• Communications (emails, texts, contacts)
• Social media accounts (Facebook, LinkedIn, Twitter)
• Shopping accounts (Amazon, eBay, online stores, store credit cards)
• Travel rewards accounts (airlines, hotels)
• Gaming sites and fantasy leagues
It’s also helpful to identify all your financial accounts – bank, brokerage/retirement and bank credit cards – but those should be addressed through your estate planning documents in the traditional manner.
Second, determine what you want to happen to each of your digital assets after you are gone. Who gets the ones that have either financial value (such as customer loyalty reward points) or sentimental value (such as photos or contacts)? Would you like your social media sites shut down or memorialized in some fashion? It is worth spending time thinking through all this.
Third, make sure to name a fiduciary – a trusted agent – in your will or trust with the power to access your digital assets. It can be the same person for all of them, but doesn’t have to be. You should also include in an addendum your wishes for the disposition of each asset. You should work with an estate attorney to make sure your estate documents accurately reflect your intentions.
Finally, there’s the matter of the fiduciary’s ability to access your digital assets. Most social media terms of service agreements (TOSAs) specify that all posted content becomes the property of the custodian (the service provider), and nearly all TOSAs prohibit third-party access to digital assets after the user passes away. (Did you happen to read all that fine print before signing up?)
Fortunately, if your will or trust explicitly grants a fiduciary access, the TOSA will no longer prevail and the custodian will be required to allow access to the digital assets by the fiduciary. The custodian has the right, however, to require evidence of the fiduciary’s authority, and could make the process quite cumbersome.
To save time and effort, you might alternatively choose to leave the fiduciary a list of login IDs and passwords for the sites and/or the data – assuming, of course, that you strongly trust the person you’ve appointed as fiduciary. Some people like to maintain this on paper, while others use password-generator applications such as LastPass for which the master password will be needed. In addition, make sure to include instructions for any two-factor authentication you may have set up. You should not include any user IDs and passwords in your will, as they would become visible as a public record after death.
Digital assets are part of your legacy. It’s important to plan for how you want them to be managed after you’re gone.
Los Altos resident Artie Green is a Certified Financial Planner and founder of Cognizant Wealth Advisors. For more information, visit cognizantwealth.com.