From the movies we watch, to the music we listen to, much of the information that we consume on a regular basis exist only in digital form. But what happens to that information and our digital legacy after we pass away? Is there anything that we can do today to protect our online accounts and content in the future? When it comes to death, the most common actions taken from a planning perspective are typically regarding medical and financial decisions. Which means that many people often forget to plan for what should be done with digital information. Traditionally, we think of money, property, or physical possessions when we think about things of value that we own. But think about all the money you’ve invested in digital content — this could be anything from iTunes to websites and domains you own. Life today is a lot more complex than it was even 20 years ago. The internet has become a huge asset to everyone, and we all live our lives on the web to some extent. Don’t leave your digital content behind and out of your estate plans.
Here’s what to know and consider.
The Challenges of Handing Down Digital Content
You can transfer ownership of tangible items like books, DVDs, or CDs to your heirs. The designated beneficiaries can then either keep the items or sell them. But it’s not always so straightforward when you want to give items like ebooks, digital music, and other forms of digital content that you bought during your lifetime. These things can’t always be transferred over to your loved ones once you pass away. That’s because most of what you purchase is never actually under your ownership.
In the digital space, you don’t actually own the content that you buy online. Instead, you are purchasing a license for the right to use the electronic content for a certain amount of time. Take Amazon’s digital license agreement as an example. Amazon dictates that Kindle content is “licensed, not sold, by the Content Provider” and can’t be resold or left to an heir. In fact, the digital content on your device cannot even be donated or given away to a third party. It’s not just Amazon who uses agreements like this. Companies like Barnes & Noble, Apple’s iTunes Store, and other online retailers of digital content share similar restrictions. Each of these companies license the content to purchasers instead of selling it outright, and upon death the contract expires and no one else has the authority to access it. This information is all found in the Terms & Conditions you agree to when you use these services or buy products online from these companies.
Can You Pass On Any Digital Content After You Die?
If it’s important for you to pass on your digital content, one way around the digital license agreements is to pass down the device that allows you to access the content. If you own a device that contains digital content (like an iPad or Kindle), you can gift that device to your heirs with the digital content still intact. Similarly, you could include your account information and passwords in your estate plan to give your loved ones access to digital content should you pass away. Many families already share electronic devices and digital content by using the same account. Following the death of the account holder, some continue using that account without issue. This may be the easiest way to handle the transfer of digital assets until legislation is in place to establish definitive rules on the best way to handle these types of situations.
How to Protect Your Digital Content with a Trust
Another option you can explore: establish a trust in your estate plan to purchase digital content. Here’s how this idea works. If the trust itself owns the content, the contract will not end with the death of one individual (in this case, you). Keep in mind that this is a relatively new idea that has yet to be legally tested. Explore this with an estate planning attorney and a trusted advisor to see if it’s something you want to try in order to pass on digital content after you die.
Other Steps to Consider When Including Digital Content in Your Estate Planning
In addition to what is mentioned above, consider taking the following steps to ensure that your digital assets are handled according to your wishes when you pass away:
Take inventory of your digital assets. Make a list of your online assets — this includes email and social media accounts, online banking profiles, images, cloud-based storage devices, and so on. Be sure to include usernames and passwords to each.
Find appropriate storage for this information. There are countless options for storing important digital information. The right solution for you will depend on your situation, what you want to do with your digital content, and how you want to give it to heirs should you pass away. Again, speak with your estate planning attorney or advisor on how to best handle the digital side of your estate planning.
Update inventory list as needed: As you purchase new devices, download additional digital content, or change passwords, be sure to update your inventory list so that it remains up-to-date with the most current information. The last thing you would want is for your loved ones to have an incomplete list of your digital assets — or worse, a complete list with outdated passwords.