Banking & Finance

Dying in the digital age: Why virtual estate planning is important

Dying in the digital age: Why virtual estate planning is important

Dying in the digital age: Why virtual estate planning is important

The estate planning process starts with an accounting of your assets and how you want them managed or distributed. But have you considered which assets are “real” and which are “virtual”? And how will your online bills be paid if you become incapacitated? What will happen to the electronic assets of your business when you pass away?

These have become key issues in today’s digital world, with digital assets emerging as a new category of personal property. These include business records, banking and brokerage online accounts, domain names, intellectual property rights, photo and music libraries, blogs, and personal and business social media accounts.

We are creating new digital assets at breakneck speed by sending emails, updating social media sites and conducting business digitally, contributing to a virtual maze of digital loose ends left by decedents. Professionals and small-business owners must consider how to deal with complications from the death of an owner of digital assets when a paper trail does not exist.

For example, an online business may be the sole source of income for an individual who becomes incapacitated. Solo practitioners and physicians electronically store customer addresses, patient information, lists of recurring expenses and insurance documents. Professionals using “in the cloud” software may depend entirely on email contact with clients and suppliers. The daily operations of a business could be devastated by the death or incapacitation of an owner.

Many people believe that their spouses or next of kin can step in to handle digital affairs. However, state and federal laws are unclear regarding the rights of beneficiaries and fiduciaries with respect to digital assets. Federal privacy laws prohibit service providers from knowingly divulging contents of electronically stored documents.