What is a digital asset and why do I care? If you have an email account, social media access, or use your computer to access accounts – you have digital assets. As we go through our day-to-day lives, we do not often consider – what happens to these accounts when I die or become incapacitated?
WHAT IS A DIGITAL ASSET?
A digital asset is anything that exists in a computer format (sometimes referred to as binary code format) that also comes with the right to use. If data does not include the right of use, it is not considered a digital asset. Simply put, Digital assets include but are not exclusive to: digital documents, audible content, motion picture, and other digital data such as email accounts, online financial accounts, personal blogs, and social media and networking websites, as well as computer accounts and passwords.
WHY DO I CARE?
What happens when you can longer access your digital accounts? Is important information lost forever? Are your social media accounts left on forever? What if you wanted someone to be able to access, control, turn off, or otherwise manage your digital access once you were no longer able to do so yourself?
Planning for digital assets is important because:
- It makes things easier on loved ones
- Prevents losses to an estate
- Helps prevent the loss of personal information
- Prevents information from being revealed to people whom you would not want to have access
- Can help prevent identity theft
HOW CAN I PLAN FOR MY DIGITAL ASSETS?
The law regarding access to another person’s digital assets are scattered and different across the states and many states do not have specific laws addressing the issue. One of the ways that you can plan for your digital assets is to include appropriate language in your will, trust, and financial power of attorney.
By expressing your wishes as to who can access and control your digital assets and in what way you would like them to handle your digital accounts, you have the ability to specify your wishes for the disposition of your digital assets. Although some states may not recognize your wishes concerning the disposition of digital assets, Texas DOES recognize the use of these provisions in your estate plan.
In Texas, if you have not used an online tool provided by your digital service provider to state your instructions regarding access and disclosure of your digital asset – then your instructions in your power of attorney, will, trust, or other plan document will control the access to and disclosure of your digital assets. If you give directions directly to a service provided (for example, your email provider), those instructions will supersede any contrary language in your power of attorney, will, trust or other documents. If you provide no instruction at all, the terms of service with each service provider will apply.
WHAT SHOULD I DO?
Despite the differences state-to-state regarding digital assets, the best action is to be proactive. You should state your wishes as part of your estate plan. Although not all states have the laws in place to officially recognize estate planning regarding your digital assets, a majority of states have laws in place to recognize these important assets and the remaining states have legislation under active consideration.
Jacob Wooley, a partner and estate planning attorney with Thomas Walters, PLLC, is ready to guide you through the complex world of estate planning. If you would like to meet Jacob and learn more about how best to protect yourself and your legacy, call 682-422-3495 to schedule your free, one-hour estate planning consultation.