Passwords and Digital Assets
By Lane V. Erickson, Idaho Estate Planning Attorney
Estate planning is the process where you come up with a written plan that describes where you want your money, property, and other assets to go when you pass away. These types of things can be given outrightly through a written last will and testament, or they could be handled and carried on for many years through one or more trusts. Regardless of how you handle it, the goal of your estate planning is to make sure that your family and loved ones know what your assets are and where they can be located.
When it comes to assets, we are normally talking about the sorts of things that people have had throughout the history of mankind. These would include tangible things such as homes, money, physical assets such as tools, and perhaps other valuable items as well. As civilizations became modernized, some of the assets that began being owned by individuals included intangible things such as bank accounts, investment accounts, and other things that create streams of income but that don’t necessarily have a tangible form.
Additionally, we now live in a changed society that is known as the digital age. Because of this, many people now own valuable digital assets as well as the regular tangible and intangible assets described above.
At Racine Olson, our team of talented and skilled estate lawyers have assisted clients through all aspects of estate planning and probate for more than 70 years. Our attorneys understand all these areas of the law dealing with all kinds of estate assets. Our experienced team includes partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. Each attorney on our team has earned the highest rankings and reviews possible from past clients and from several legal rating services including Justia, Martindale & Hubbell, and AVVO. Our team of lawyers have the expertise and knowledge to benefit each of our clients specifically and individually with their estate plan and probate needs.
The purpose of this article is to specifically discuss how you can prepare your digital assets and information related to them to assist your family and loved ones after you are gone. Specifically, we will describe how these things are a part of your estate and the things you can do to make sure they get into the hands of your family members and loved ones.What is a Digital Asset?
Let’s start by talking about what a digital asset actually is. Specifically, a digital asset is any digital item that has a value or that brings value to your estate either intrinsically or because of the income it produces. Some examples will help illustrate what all this means.
Let’s suppose you are a photographer. You use a digital camera, and you take pictures that are then uploaded from your memory card into your computer where they are stored on your hard drive or a DVD disc. If you upload your digital photos to a website so they can be sold, then those digital photographs are an asset. Unless you have actually printed one of your digital photos onto paper, it’s possible that your digital photos could never take the form of a physical item. However, even though your photos are only in digital form, they still have value. There are thousands of people who have sold their digital photos online and who produce a good deal of income from their photos.
In addition to photos, other digital assets could include online accounts that process payments. Well known services include PayPal, and Venmo. Either of these could have money in them at any given time the same as an actual bank account. Other digital assets that you may own that could be valuable could include a Blog, or a YouTube channel, or an online store that you operate and maintain. These digital assets could produce income for you because of the things that you post or upload to them. Many people make hundreds of thousands and sometimes even millions of dollars from these types of digital assets.
Other digital assets you may own that may not produce income but that have value to you and potentially your family may include your email accounts, your FaceTime accounts, other social media accounts, and so forth. Because these are considered assets, they are usually protected by passwords. Unless your family knows your passwords, and how to access your digital assets, these assets could be sitting out there in digital land after you pass away and potentially never provide any benefits to your family and loved ones because they either did not know about them or could not access them.Idaho Law and Digital Assets
However, a problem could still exist if your family does know about your digital assets but simply can’t access them because they don’t know your passwords. The good news is that under existing Idaho law you may still be in good shape.
Idaho, as well as many other jurisdictions, have recognized the need for access to digital assets. Because of this, Idaho has adopted the Revised Uniform Fiduciary Access to Digital Assets Act. This is found at Idaho Code § 15-14-101 et seq.
The purpose of this statute is to give any fiduciary who is appointed through a regular estate planning or probate process or through a trust access to digital assets that are owned by the individual who listed them in their estate planning or whose assets belong to their estate. In other words, your agent, personal representative, or trustee would be able to gain access to these digital assets even if they didn’t know the passwords.
The only problem is, this often requires a court order to be generated so that it can be given to the administrator of that digital asset. For example, if you have a PayPal account with money in it, and you pass away, your family may try to get access to that PayPal account. However, the PayPal company may require a specific court order to be given from a court before they will release that account or information about it to your family members.How to Store Your Passwords
The better way is to keep your digital assets organized and stored so your family can access them without having to resort to a court to do so. In other words, if your family is aware of your digital assets, and they can use your username and password to access those accounts, then in that instance no court order is necessary.
This brings us to the real problem that exists which is: how do you store your passwords for your digital assets, so they are usable but safe? The easiest way to do this is to create a written list. In other words, do it in your own handwriting. You don’t ever want to store your usernames and passwords on your computer because your computer may be vulnerable to being hacked or falling into the wrong hands. If that happens, your digital assets could be lost forever. However, if you simply prepare a form that you hand write your information onto, and you keep that updated regularly, then your family and loved ones will both know about those digital assets and have the ability to access them.
We understand that this may all be overwhelming to you. However, we are confident that we can help. We have assisted numerous clients and the creation of estate plans that deal with their digital assets. We are confident that we can help you too. Please contact us today for a free 30-minute consultation or we can answer your questions and describe how you can create a plan that will provide for your family and loved ones after you were gone.Enlist an Idaho Estate Planning Attorney to Help You
Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a free consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho estate planning problems.