The Need for Digital Estate Planning – Part II

Last time, I discussed the importance of planning for a person’s digital estate. I also mentioned the need to plan for your digital assets has only emerged over the last few years.  Unfortunately, that means how digital assets are treated with respect to your estate are untested. Luckily, there is some public and private help available.

On the public front, at least five state legislatures have passed laws addressing a person’s digital estate. First, Connecticut and Rhode Island’s laws only address a person’s email accounts. They didn’t address digital assets like Photobucket™, Itunes™, etc. It is hard to forget that the Iphone™ was only released 5 years ago.  Second, even the more thorough Oklahoma and Idaho laws have not been challenged in court to date to determine their validity and constitutionality.

So that leaves individual solutions.

You could keep a slip of paper listing all your information and store it in your house somewhere.  Though, the lack of security sounds like the start of a bad movie.

One practical solution is to keep a list of passwords and similar information on a flash drive or stored on your computer somewhere but title the file something unique – i.e., not “passwords” – and informing a person you trust about the file. One caveat, do not make the document that lists your passwords password protected.

You could also place your flash drive with the passwords stored on it in a safe deposit box. But, make sure someone knows where it is and can access it. Many providers also require periodic updating of your password, which means a trip to the bank every time you update a password. That isn’t very convenient.

A number of private companies have been established to meet the needs of consumers looking to protect their digital assets. But, living in a capitalist society, it will come at a cost.

Generally, the companies offering digital asset protection services break into two groups.

The first group of companies will secure the passwords of the digital assets accounts allowing the account holder to list beneficiaries to a particular digital asset. This would be similar to a person designating beneficiaries on a life insurance policy. I can’t vouch for these companies but two companies that provide these services include LegacyLocker™ and Securesafe™.

The other type of company in this field preserves all the assets in one place digital location. It incorporates all the digital pictures, emails, and the like into a digital legacy that a person can pass on to that person’s heirs. One company in this field is Gen-Ark™. Again, I have not used them personally and can’t vouch for them.

One issue that needs to be considered when using these digital asset protection services is the relative youth of the industry.  Most of these companies offering digital asset protection are start-ups. The company could be bought by a competitor that could drastically change services provided and/or pricing. In fact, Securesafe™ bought Entrustet™ – a company I mentioned in another article a year ago. Or, the company could go under.

One other hi-tech solution would be to use a cloud type answer. Maybe keep all of your digital assets in DropBox™ or other cloud type system and give access to another person to ensure the digital assets can be passed on. Maybe not ideal, but at least a thought.

I feel confident in saying that given the growth in digital assets and their importance, better solutions will emerge in the coming years.

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About Chris Guest

I am a trust and estate planning attorney working in the Washington, DC metro area. I offer comprehensive estate planning, trust administration, probate services and general business counseling for accountants, attorneys, business owners, consultants, federal and local government employees, retirees, other business professionals and other individuals.
This entry was posted in Asset Ownership, Assets, Atypical Asset, Digital Assets, Digital Estate Planning. Bookmark the permalink.

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