According to a report from a digital research firm eMarketer, American adults spent more than five hours each day on the Internet last year, up from four hours and 31 minutes in 2012, and three hours and 50 minutes in 2011. Social media sites occupy a large portion of that online time: Data from research firm Ipsos Open Thinking Exchange shows that Americans between the ages of 18 and 64 who use social networks say they spend an average of 3.2 hours per day doing so. Nearly three-quarters of online American adults use social networking sites, and some 42% of online adults now use multiple social networking sites, says Pew Research Center.
In the process of spending more time online, Americans are creating a legacy of data that will outlive them—the inevitability of death poses new challenges. Not only are there consumers who wish to tidy up their virtual effects before they die; there are also estate lawyers in the early process of establishing what constitutes digital ownership, technology firms clamoring to offer new services that deal with the remnants of digital life, and social media companies coming up with platforms that memorialize the dead.
“The norms are evolving,” says Andrea Matwyshyn, a professor of legal studies and business ethics at Wharton. “There will be a feedback loop over the next few years: Customer savvy and sophistication will increase, companies will begin to streamline their approaches, and the legal industry will formalize estate planning.” “We have become progressively more reliant on digital communication and social media”, notes Matwyshyn. “To many people, their digital persona is equally—and in some cases, more—important [than their physical] identity.” And yet very few people have made arrangements for what will happen to their digital persona and online possessions when they die.
In 2012 the government included a “social media will” to its list of personal finance recommendations. The government suggests appointing an online executor to be responsible for the closure of email addresses, blogs, and other online accounts. This person would also carry out the deceased’s wishes with regard to their social media profiles. Someone’s desire may be to completely cancel all profiles or keep them up as a memorial for friends and family to visit.
Surprisingly five states currently have laws governing digital estate management: Oklahoma, Idaho, Rhode Island, Indiana, and Connecticut. In structuring respective statutes, each state built upon the language of the states that had acted before it. Connecticut was the first state to enact digital estate planning legislation, doing so in 2005.
Currently, there is no universal definition of digital asset or a digital estate, which can be troublesome for attorneys seeking to assist clients with digital estate planning. According to one industry resource, the term “digital asset” encompasses e-mail, word processing documents, audio and video files, and images, which are stored on digital devices, and mobile devices, without regard to the ownership of the physical device in which the digital asset is stored. By contrast, a person’s “digital account” may consist of a variety of personal assets, including e-mail accounts, software licenses, social networking accounts, and domain registration accounts. Simply put, digital assets are the actual files, and digital accounts are the “access rights to files.” This account/asset distinction can be critical; even if the files themselves are readily available, their management and transfer to an executor or agent may be subject to an Internet-based service agreement.
The vast majority of our digital assets—such as digital photos or Facebook timelines—have little value beyond the sentimental. But even these require careful estate planning, according to Gerry W. Beyer, a professor at Texas Tech University School of Law. In the old days, he says, people passed down scrapbooks, memoirs, picture albums, and musty files of old newspaper clippings. “But now, many of us don’t have physical property like that to transfer. So all that stuff will disappear.”
Certain digital assets have monetary value both today and in the future, such as domain names or a blog that generates income. Avatars or virtual property in online games such as World of Warcraft or Second Life also have quantifiable value, Beyer notes. Digital assets—personal iTunes music libraries and Kindle books, for example—are in a different class. If you have, say, a large digital book collection, the transfer of usage rights is limited and closely monitored. “You don’t technically own those,” says Beyer. “You have a license to use them. That license dies with you. But if those are owned in a trust, your beneficiaries may be able to continue to use them.”
A growing number of companies are finding ways to monetize postmortem digital effects. After all, just because most of our digital content is sentimental, it does not mean it is of no economic value. “Quite the opposite, actually,” says Pinar Yildirim, a professor of marketing at Wharton. “Say you upload photos today, and 100 years later, long after you are gone, your great-great grandson wants to have them. It represents an opportunity for any company that may want to justify its investment in storing that digital content.”
It may be helpful to think of digital assets in terms of four different categories: personal, financial, business, and social media. Although there is some overlap, people often develop separate plans for the disposition of each asset category. To elaborate, personal assets are files that are “typically stored on a computer or smartphone or uploaded onto a web site,” including photographs, videos, or even music playlists. Social media assets, on the other hand, generally entail social interactions with a network of people through various mediums, including websites such as Facebook and Twitter, as well as e-mail accounts. Financial assets may include bank accounts, Amazon accounts, PayPal accounts, accounts with other shopping sites, or online bill payment systems. By contrast, business assets generally include customer addresses and patient information.
Without a plan in place, you risk burying your family in red tape as they try to get access to and deal with your online accounts. If you have, say, a Yahoo email account, your emails might be deleted before your family has a chance to review them. In other cases, maybe your family gains access to emails that you’d rather they didn’t see. Or, maybe you’ve been blogging for years, and your family wants to maintain your online writing as a sort of memorial.
These are the sorts of problems that a digital estate plan — one that details your online assets — can help prevent. Keep in mind that, given the legal complexities, a digital estate plan won’t guarantee your wishes are met. But it will help your executor as he or she attempts to manage and distribute your assets. And it’s not only an issue of family photos and other sentimental assets. If you have an online-only bank account or a PayPal account, your executor may never know about that account if not for your digital estate plan. And what if you have a fortune in Bitcoins on your computer? Divvying up your online assets is complicated: These accounts often are governed by the terms-of-service agreement to which you agreed upon opening the account. Often, service providers have created those agreements to comply with federal laws that limit access to account information to authorized users. Most state laws don’t offer specific support to executors in taking control of digital assets. Even where such laws exist, they are often well behind the reality of today’s technology. (The Uniform Law Commission, a nonprofit that drafts model legislation for states to adopt, is in the process of drafting a proposed law on digital assets — a Uniform Fiduciary Access to Digital Assets Act — but there is no guarantee states will adopt the legislation.)
To protect your digital assets, make a list of your online accounts so your executor knows about your online assets. Your inventory should include login IDs and passwords. You could store the information with one of the online services, in a safe-deposit box, or put it on a CD or flash drive and give to a trusted adviser. But don’t put your login information in your will — wills that go to probate become public record.
Next, detail how you want to dispose of each asset. Get specific. For example, “If I’m dead, memorialize my Facebook, delete my Twitter and LinkedIn, and here’s how to get the cash out of my PayPal,” suggested Jean Gordon Carter, an estate-plan attorney and partner at Hunton & Williams LLP in Raleigh, NC.
Keep in mind that your wishes may run afoul of the service provider’s policies, depending on the terms of service associated with each account — terms which, by the way, can change at any time. The best you can do is leave a detailed digital estate plan, and hope for the best. If that’s precisely what you’d like to have happen — maybe your emails are not for your family’s eyes — then don’t provide your password for that account in your estate plan, and note that you’d like that account deleted without being read.
Email service providers and others have started to change their policies in response to the complexities of dealing with digital assets after an account owner’s death. Some email providers, for example, may provide an estate’s executor with a copy of the decedent’s emails (it’s unlikely that they’ll provide the username and password).
For its part, Facebook will delete an account or allow the user’s timeline to be memorialized once it receives proof of death and proof of the relationship between the decedent and the person making the request. Although it is awkward to have to deal with each provider separately, where they do offer the mechanism, it’s the easiest way to deal with what you want to have happen after your death,
Designate a digital executor, pick a trusted friend or relative to handle your digital assets after you die. This person could be your main executor, or someone else. If your mom has no idea what Facebook is, you don’t want her going in and trying to handle it. In some cases, it might make sense to name a different fiduciary for that role. You can name two executors and say one has ‘limited power to handle my digital assets.
Get specific: Name the person, and name each account for which you name them as an authorized user. Naming such a person is no guarantee, but it’s certainly better to be proactive and nominate someone. Then that person has the ability to say, ‘This person authorized me to have access.’ That will certainly facilitate things after death.
Hopefully, within the next few years a uniform law will be drafted and enacted by the states, allowing families to easily gain access to a decedent’s digital estate. Once this law is in place, people can fully utilize the digitalization of the world that continues to increase each day —both during life and after it.