Category: Asset Protection
Tags: Estate Planning, Digital Assets, Digital Estate Planning, Powers of Attorney, Asset Protection

Consequences of No Digital Asset Protection

Posted on: July 22nd, 2014
digital asset management

Digital asset management will continue to change as new devices, applications, and technologies develop.

Digital asset protection is more than leaving behind one’s passwords. In an increasingly paperless world, failing to create instructions for accessing digital accounts could create problems for surviving family members.
Email and online bank accounts are just two digitally accessible types of assets with uniquely different rules governing user access. Email services providers have unique user agreements, just as every bank’s agreement is different. Consider the variety of digital accounts maintained by an average American: Netflix, iTunes, photo storage, file sharing, domain registrations, tax preparation accounts, and more. Then consider the unique terms of use associated with each account. Compounded with user agreements are the laws unique to the account owner’s domiciled state, which may or may not address digital assets (yet).
Digital asset protection plans may include powers of attorney that allow individuals to appoint designated persons with access to digital accounts in the event the account owner is incapacitated or dies. Last year North Carolina proposed legislation that would have allowed management of digital assets through powers of attorney and by personal representatives of a decedent’ estate; these provisions did not pass.
Several consequences may result from an individual failing to create a digital asset protection plan, here are only a few:
  1. Sentimental photos and other media are lost forever.
  2. Business operations could be interrupted if domain registrations are lost. Some domains are significant financial assets and their value may provide for surviving family members.
  3. Failure to comply with an account’s guidelines could forfeit access indefinitely.
Laws addressing digital assets are still developing, as are the technologies that we use today and ones that may exist tomorrow. Development and regular reviews of a comprehensive plan addressing digital and non-digital assets with an estate planning attorney can help ensure that all types of property will be protected and managed in accordance with one’s wishes. Keep an inventory of digital accounts up-to-date, not only with current access information, but as a reminder to review each account’s terms of use and to address special requirements with an attorney so that surviving family members have access when the time comes.
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