Digital Property Creates New Questions In Estate Planning

Digital Property Creates New Questions In Estate Planning

Real EstateEstate attorneys are facing a new and difficult challenge: the division and distribution of digital assets after death. Illinois is one of many states struggling to draft legislation to protect digital property for intestate estates, but 2015’s Senate Bill 1376 faced significant opposition from online companies. These companies argue opening digital assets to an estate violates the original property holder’s right to privacy, and is therefore impermissible.

Right now, the only way to circumvent the obstacles in distributing digital property is through the inclusion of the account information into an estate plan.

What’s At Stake?

Digital property is a growing concern in today’s digitized world. The size of digital estateswill only continue to increase as society’s reliance on digital technology increases. Examples of digital assets in an estate include:

  • Digital Businesses: eBay seller profiles, income generating YouTube channels, and Etsy stores are but a small fraction of the digital businesses people engage in every day.
  • Digital Property: iTunes, Vudu, and other online stores allow users to purchase digital only copies of media, and some consumers have thousands of dollars invested in property on these platforms
  • Digital Funds: PayPal, online betting accounts, and retirement savings are all accessed through digital means.

Other digital assets, such as social media accounts, email, and subscription services are also an issue, but their lack of a clear monetary value make them difficult to quantify for estate attorneys.

Passing The Assets

When planning the will, estate attorneys need three pieces of information from the digital account holders. First, the will must contain a complete inventory of all the testator’s digital property and accounts. Because current law will not allow access unless permission is specifically granted to a beneficiary, a full inventory is vital.

 

Next, the testator must provide all of the account information, including login information, password, and answers to security questions.

Finally, estate attorneys want instructions for what the beneficiaries are to do with the property once it is passed on. Testators may ask that social media or business accounts be taken offline to protect their legacy, or require that digital property be transferred to an account under the beneficiary’s name.

Illinois law will continue to evolve on the issue of digital property in estates, but until the changes occur, the best way to protect digital property is through a will or estate plan.

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