Digital Assets and Estate Planning

February 10, 2016

Attorneys and legislators in Wisconsin are currently developing a new law covering digital assets upon death. This new law aims to clarify the issues challenging estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. attorneys and probateThe court process proving the validity of a Will and conducting the orderly Inventory, Accounting, and Administration of a decedent’s assets under a Will or under Intestacy laws if there is no Will. The probate process in Wisconsin typically takes between six to twelve months in Wisconsin and can take longer in some cases. Probate can be avoided by proper Estate Planning and through the use of beneficiary designations, Transfer on Death Deeds, Marital Property Agreements and Trusts. courts rearding digital assets. However, this developing legislation willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. not solve most of the items discussed below – and most likely willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. create new, unintended issues with respect to digital assets in Wisconsin.

The Current Problem

In advance of this new law, it is a good idea to consider provisions regarding your digital assets in connection with your estate plan. Although these type of assets often fall outside of traditional estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity., they are still important to address in many cases.

Addressing access to and disposition of digital assets in an estate plan can make your trusteeThe person or company named in a trust to manage property and assets of a trust. Usually a trust will name an initial trustee or co-trustees and successor trustees. A trustee has the duty to act in the best interest of the person for whom they are managing the funds and is considered a Fiduciary. Most people that set up Revocable Trusts to avoid probate, name themselves as Trustee and also name successor trustees to take over upon death or upon incapacity. or personal representative’s job easier. The following two steps will aid your representative or trusteeThe person or company named in a trust to manage property and assets of a trust. Usually a trust will name an initial trustee or co-trustees and successor trustees. A trustee has the duty to act in the best interest of the person for whom they are managing the funds and is considered a Fiduciary. Most people that set up Revocable Trusts to avoid probate, name themselves as Trustee and also name successor trustees to take over upon death or upon incapacity. understanding and carrying out your last wishes:

1. Having access to the email address(es) you used to set up accounts and passwords will be very helpful.
2. Directions regarding how social media accounts are to be dealt with following death or incapacity can be helpful. For example, should your Facebook, Linkedin or other social media accounts remain up or be deleted? Should a post be made on your favorite blog accounts that you have passed away to inform readers and other bloggers?

Lack of access to online accounts can be a real hurdle to the successful execution of an estate plan. For example, it has been reported that the wife of a deceased husband was unable to obtain a password for her husband’s Apple account without a court appointed personal representativeA term used in Wisconsin to describe the person appointed by a probate court to be in charge of the probate administration process of a deceased person. This is often referred to in other states as an Executor or Administrator. The Personal Representative may be set forth and nominated in a decedent’s Will before death along with successor Personal Representatives. or executorFor Wisconsin see Personal Representative.. The husband’s Apple account contained thousands of dollars worth of purchased music, apps, and movies. Access to these assets could be lost without a password or court order.

In Wisconsin, we are working on a state law to allow “next of kin” or heir at law to obtain this information without a court appointment. However, technology companies may not cooperate without a fight due to the increased risk of illegitimate persons obtaining passwords. Moreover, each company’s user agreement may take precedent over a state law or at least force a court challenge.

What Are Digital Assets?

There is no uniformly accepted definition of digital assets with respect to estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity.. However, estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. attorneys generally consider digital assets to be accounts and items stored digitally such as photos,online accounts and music and other assets stored on computers or in the cloud, or even that novel that dad wrote on his computer before he passed away.

Digital assets could include the following categories:

• Computers, back up computer drives, smartphones, digital music and photos stored on your computers, electronic books on your computers
• Information stored in the cloud, such as icloud.com, iTunes, Google Play or on Amazon. These could include photos, purchased music and other forms of digitally stored items.
• Online Accounts for communication and social media or networking.
• Domain names (if you registered for either for business or personal use), especially if they contain your family name or have monetary value.
• Other electronically stored items such as letters, work product stored electronically, back-ups of photos, etc.

What to Do Now When Estate Planning in Wisconsin

Key Questions about Access to Digital Assets

The following are just a few of the key questions that estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. lawyers can help you work through and answer:

• Who do you want to have access to these documents? However, how willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. they access these accounts?
• Have you made the password, usernames and email addresses available for these accounts? Have you written out instructions to your trusteeThe person or company named in a trust to manage property and assets of a trust. Usually a trust will name an initial trustee or co-trustees and successor trustees. A trustee has the duty to act in the best interest of the person for whom they are managing the funds and is considered a Fiduciary. Most people that set up Revocable Trusts to avoid probate, name themselves as Trustee and also name successor trustees to take over upon death or upon incapacity., personal representativeA term used in Wisconsin to describe the person appointed by a probate court to be in charge of the probate administration process of a deceased person. This is often referred to in other states as an Executor or Administrator. The Personal Representative may be set forth and nominated in a decedent’s Will before death along with successor Personal Representatives., spouse or child how these items are to be handled? Do you want specific assets or accounts to be transferred to certain beneficiaries?
• Should some items be deleted or should certain social media accounts stay active for friends and family to post to and stay in touch with your non-family friends and loved ones?
• Are your online photos to be given to a certain person or your Apple, Google Play, Amazon, Dropbox, Google Drive, or iCloud, assets such as movies to be given to a certain person?

All of these issues, if addressed in advance, can make the execution of your estate plan easier, avoiding a fighting over the assets. In addition, it can avoid your loved ones not knowing what you would have want done with these items.

Inventory Digital Assets

Providing an inventoryA document filed during probate administration and sometimes during trust administration setting forth the assets owned at the decedent’s death and the value of those assets. In a probate administration case, the Inventory is filed with the court and is a public document. of what is “out there” on back up drives, in the cloud and on computers can help your loved ones to quickly figure out what accounts you have. Even valuables like PayPal accounts can be lost if others don’t know they exist. For some people they may have significant funds in alternate online accounts or monetary type of accounts such as PayPal, BitCoin, and other such dollar alternatives. For example, someone active in online selling and buying of personal items, even cars, could have substantial assets in an eBay or other online account.

Designate Who Receives What Digital Assets

Your estate plan or written directions, depending upon the type of asset involved, can help define who is to receive certain digital assets and who is to have access to these assets. If there are significant digital assets, or assets that loved ones may fight over, addressing this in your Trust or Last Will and Testament is advisable, or at least in a written document.

Indicate Who Will Be in Charge of Your Digital Assets

Normally, your trusteeThe person or company named in a trust to manage property and assets of a trust. Usually a trust will name an initial trustee or co-trustees and successor trustees. A trustee has the duty to act in the best interest of the person for whom they are managing the funds and is considered a Fiduciary. Most people that set up Revocable Trusts to avoid probate, name themselves as Trustee and also name successor trustees to take over upon death or upon incapacity. or personal representativeA term used in Wisconsin to describe the person appointed by a probate court to be in charge of the probate administration process of a deceased person. This is often referred to in other states as an Executor or Administrator. The Personal Representative may be set forth and nominated in a decedent’s Will before death along with successor Personal Representatives. willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. be given control over your digital assets. However, making them aware of what assets need to be addressed, and providing them with the passwords and details on how to address these assets can make their handling of your digital assets a less stressful and less taxing process.

Your Action Plan – We Can Help

The estate planning attorneys at Wokwicz Law Offices can help update your estate plan with respect to your digital assets. Our experienced and tech-savvy team can help make the process easy for you. To discuss your digital assets and how best to update your estate plan, please contact us on 262-658-2181 or info@wokwicz.com.