09/26/2013

Digital Assets and the Estate Plan

Earlier this year, the Virginia General assembly passed a law pertaining to digital assets. The new law allows parents of deceased minors to have access to the children's social media account. The law was pushed by a father after his son committed suicide and left no explanation for his action. The father sought access to his son's accounts to search for additional information.

While this law is only limited to minors' digital accounts, it represents a growing trend of states to allow consumers to have more control over their digital data.

The Wall Street Journal recently had an article on incorporating digital assets into estate planning. The experts cited in the article made a persuasive argument that it is just as important to detail who inherits the iTunes, Shutterfly, Frequent Flyer miles or the popular web domain, as it is to list who gets the stocks and mutual funds.

The work begins by establishing procedures to make passwords available to gain access to accounts managed online, and then to arrange to transfer the online assets and account ownership. There is no uniformity among online service providers. For example, there is nothing in Twitter's rules and conditions that forces an account to close if the owner dies, but Apple iTunes does not have a policy that allows anyone to will or inherit an iTunes account.

One expert noted that many digital assets are owned through a non-transferable license granted only to the account holder. When the account holder dies, the license generally ceases to exist, so that it cannot be transferred by a will. She recommended placing the license and the passwords in a trust, where it will survive the death of the licensee.

Details of a digital asset such as account number, username and password should never be listed in a will which becomes a public document when presented for probate.