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Digital Assets: Are They More than Ones and Zeros?

By: Atty. Marcus Collins

One of the burgeoning areas of estate planning law is planning for digital assets. Technology continues to become more and more complicated (and some forms, such as artificial intelligence, become creepier). As technology develops, the law must develop to deal with it. However, there is naturally a delay in the development of the law with respect to the field it attempts to regulate. The law can sometimes be a slow learner.

Estate planning law is trying to keep up with the digital world. Fifty years ago, digital property did not exist. Now, in a world where it is commonplace to work remotely and much of people’s lives are lived online, digital property is everywhere. That begs the question: what happens to all that digital property when you die?

Illinois law says you can direct, in your living trust, what should happen to your digital assets. However, every asset in your estate must be properly titled into your trust in order for the trust to control it. Your living trust can say the trustees have power to take control of digital accounts, terminate them, claim rewards points (such as flight miles), etc.

Just relying on the trustee of your living trust may sound easier than it really is. Many online account providers (such as Facebook) have tools for controlling your account at your death. In some cases, under Illinois law, any direction you make through such an online tool from the account provider to control that account at your death will override any instructions in any estate planning documents you have signed. Leaving the trustee at your death to settle your accounts will create a real headache for them at your death, as they will have to check in each online account to ensure that you did not use the company’s legacy tool.

We regularly recommend to our clients to consider a company called Directive Communication Systems (DCS) to add some structure to closing their digital accounts. They, as a business, have gone further to get a level of agreement with various account providers. If DCS tells providers to terminate or transfer an account, the providers will follow that directive–and that’s even without passwords!

However one chooses to deal with their digital accounts and assets, the fact remains: it would be negligent to do nothing. There are risks involved in not planning for your digital property. From identity theft, to hacking, to recurring account charges, to loss of important information, digital estate planning is critical. Though the digital world is growing more and more intimidating, we owe it to our families not to just put our heads in the sand and hope they can work out the mess we’ve made after we’re gone.

We often say that an estate plan that works is an estate plan that does all the good it can do. There’s a lot of good that can be done by planning for your digital property. There’s a lot of headache that could result from doing nothing.

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