Digital assets are a new type of asset that has come into existence for estate administration in the Information Age. Traditional assets, such as houses, real estate, personal possessions, vehicles, business equipment, and many other physical items may be covered by a will. However, the scope of what an asset encompasses has also expanded to include digital property.
According to the American Bar Association (ABA),“collectively, a person’s digital property and electronic communications are referred to as ‘digital assets,’ and companies that store those assets on their servers are called ‘custodians.’”
What Kinds of Assets Are Often in Digital Form?
Digital property can include:
- Medical records
- Legal or financial documents
- Web sites
- Online email
- Online brokerage account
- Client lists
- Digital art
- Social media accounts
- Banking information
- Business Accounts
- Software (Word, Excel, Turbo Tax, Quicken)
- Information stored on a hard drive, CD, DVD or thumb driver
Many various accounts today exist in online form. In addition, many people have online businesses and own websites, which they use for marketing and selling products or services through online transactions. Websites are often maintained through hosting companies (custodians). Account owners of all types of accounts, websites or otherwise, must create usernames and passwords to access and manage their accounts.
Custodians of Online Accounts
Custodians of digital assets restrict access to accounts by using terms-of-service agreements, and when individuals suffer from incapacity, whether physical or mental, they may lose access to their accounts if the account has remained inactive for a certain period of time.
Some custodians have inactive account reminders. For example, Google accounts expire approximately after nine months of inactivity, but you can set up a reminder to let you know that expiration is approaching, so you can access and keep the account active. Some bank accounts and credit unions have inactivity fees that they charge after a certain period of time in which the customer does not make deposits or withdrawals.
Keep Records of Your Digital Assets
The ABA discusses the importance of developing “digital asset awareness,” and your property inventory should list all your digital assets, explain where they are held and include your user names, passwords and password “prompts.”
Just as you would keep an inventory of valuable physical items as part of estate planning, you should also have an inventory of your digital assets and make it available to loved ones or friends whom you designate to handle them in the event you become incapacitated or die.