Making an estate plan may include digital assets as well

You've planned for your physical stuff but what happens to your digital assets when you die? See how you can cover these possessions with your estate plan.

Making end-of-life plans can be a difficult process for anyone because it forces us to think about our own mortality and what we are leaving behind. But failing to announce your end-of-life wishes -- whether through legal documents or verbal dictations -- can create problems for your loved ones after your passing because it leaves them wondering what your true intentions were.

A number of factors can cause this to occur such as not knowing what to include in an estate plan, not understanding the law in general, and/or incapacitation before a plan is made. It can even be caused by a sudden passing from an illness or accident. While many of the issues created by the absence of end-of-life wishes can be remedied through litigation, this may not be the case with every issue.

Consider for a moment your digital assets. These can include passwords to online accounts, online media such as music and file downloads, blog posts, email messages and even tweets. Even though digital media is becoming a huge part of our lives with each passing year, many people forget to mention these accounts in their estate plans. But even though this itself can create problems, in many states, including New York, the laws aren't even equipped to handle the succession of this type of asset.

It's all in the fine print

Much of the problem lies in the terms of service for online accounts. While their primary goal is to protect a user's privacy, several recent cases show that they can also interfere with the needs and interests of a grieving family who has suddenly lost a loved one. Though they may think that they have the right to the digital information stored by the online provider, a terms of service agreement may prove otherwise. This can lead to costly litigation that may or may not end in access to the lost loved one's accounts in the end.

Where does the law stand on the issue?

Assembly Bill 00823, which was referred to the Committee of Judiciary in January, aims to remedy any potential problems by giving the executor or administrator of an estate the power to take control of online accounts after a person has passed away. This would include access to information on these accounts and the right to close down the account if the family so wishes.

Unfortunately, a decision hasn't been made yet regarding this bill, meaning courts in the meantime have little legal guidance when it comes to digital asset litigation.

Why should you care?

Even though this relatively new area of law has created some uncertainties when it comes to the transmission of digital assets after death, it may still be a good idea to account for these assets in an estate plan. At the very least, you may want to notify a relative or loved one about the existence of these accounts so that they may attend to them after you are gone.

Valuable information about a person is often stored on many social networking and online sites, which can lead to identity theft. A thief can easily use this information to access a deceased person's more sensitive accounts, apply for a job under the deceased person's name or even open a new line of credit. This could create tremendous legal problems for your loved ones, which is not a headache most people want to leave behind after their death.

Keywords: estate planning, probate, litigation, end-of-life wishes