Virtual Realities: Have You Protected Your Virtual Life After Death?
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Virtual Realities: Have you protected your virtual life after death?

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Updated July 18, 2017

Trust Point

We are proud of Trust Point’s century of service reputation of excellence. But, our approach and purpose has always been focused on the future. Not just our own company’s future - but, more importantly, our client’s futures.

Would you spend $635,000 on a property that you could never even visit?
Would that property be worth anything at all? Someone certainly thought so! In Entropia Universe, an online gaming platform, a player going by the screen name of Neverdie sold his space station and his property on a giant asteroid to other players of the game for $635,000. That’s in real U.S. dollars!

Even though an item may have no intrinsic value, what matters is that people believe it does and are willing to pay for it. That raises an intriguing question: What would have happened to Neverdie’s online fortune if he had died prior to the sale on Entropia Universe? Did his estate plan cover that possibility?

Neverdie’s virtual real estate is an example of a digital asset. Whether they engage in online gaming, keep tabs on Facebook, store photographs and videos, go shopping, or just read the news, 87% of adults are active internet users (webcease.com, 2015). Even if they aren’t on the internet, most people have access to a computer or mobile device where files are likely kept. Any online account or file you have stored in the cloud or on your own device is considered a digital asset. The average American has $30,000 worth of digital
assets, according to a recent McAfee study. Personal memories stored digitally made up $16,581 of that value (trustadvisor.com, 2015).

Digital assets are everywhere and will continue to grow exponentially. Some digital assets are easy to associate with significant value, as in the case of property in Entropia Universe. For another example, consider the digital currency Bitcoin. As of mid-2015, one Bitcoin trades for $250 in U.S. dollars. In recent years, the value has been as high as $1,100 USD = 1 Bitcoin.

Domain names can fetch a steep price as well. In 2010 the domain name insurance.com fetched a sale price of $35.6 million.

If J.K. Rowling had died unexpectedly while putting the finishing touches on the last book in the Harry Potter series, can you imagine the value of the manuscript that was sitting on her computer?

On a more modest scale, what about frequent flyer accounts and the points racked up in credit card or hotel loyalty programs? Any of those could have real-world value, depending on the balance of points in the accounts.

Other digital assets are more subjective in their valuation. Photo storage accounts through Shutterfly or Flickr may have extreme sentimental value because of the memories they contain. Posts, comments, and pictures posted to social media accounts may be used for reminiscing and also as magnets to draw grieving family members and friends together to share stories and condolences. Email accounts, blogs, tweets, or text messages may serve the same function — and they derive value for this and other reasons.

Digital Estate Planning

Given this real or perceived value, digital assets need to be considered in estate planning. Just as with real estate, stock certificates, or other tangible property, an estate plan should account for the management, preservation, or distribution of digital assets. Otherwise, your family risks not only monetary loss but the possibility that they may never be able to access priceless material such as your digital photos, videos, emails or blogs. About 93% of Americans who possess digital assets have no idea what will happen to their online personas when they pass (webcease.com, 2015). They need to understand the ramifications.

Part of the need to incorporate digital assets into your estate plan arises from the lack of clear law that would allow your spouse, executor, attorney, or beneficiary to access these assets after death. Legally speaking, online material is very different from items in a physical file cabinet in your home that a named fiduciary typically would be allowed to rifle through in an effort to find information. Even if fiduciaries have the deceased party’s user names and passwords, their authority with regard to online access can be confusing and sometimes contradictory. Privacy laws come into play, and these may disallow access to sites by third parties.

Screenshot 2019 07 16 at 4.51.43 PM 1 1

The Uniform Fiduciary Access to Digital Assets Act, approved by the National Uniform Law Commission in July 2014 is a step in the right direction. The act allows fiduciaries the same authority over digital assets as they have with physical ones. Furthermore, it compels the fiduciary to comply with the deceased individual’s instructions about these assets. Unfortunately, states have been slow to enact the proposed legislation. As of June 2015, as shown in the map above, only Delaware has fully adopted the Access to Digital Assets Act.

With no legislation, it is up to individual online platforms, such as Shutterfly, Facebook, and so on, to determine procedures for users who die. Many online companies have inserted language into their own termsand conditions agreements that may be adequate. But some sites have no agreement at all, and others have differing policies.

Yahoo has taken the stance that a user’s account dies with the person. Therefore, no one would be granted access.

Google has an inactivity feature that takes effect as soon as the company is notified of a user’s death. However, it can take up to 18 months to fully deactivate the account. During that time, no activity from a third party is allowed.

Twitter and LinkedIn will remove an account after a request from a family member or friend, as long as the companies are provided with pertinent information and a link to the obituary.

In response to a flood of demands from its customers, Facebook recently launched a new feature, easy to find in the user’s “Settings,” called a Legacy Contact. This contact, who must be named prior to the user’s death, can pin a post to the decedent’s timeline, accept new friend requests, and update the profile picture. The contact also can delete the account and download any data for archival. Facebook, with more than 1.39 billion users worldwide, has thus taken a big step in the right direction until estate laws catch up with technology.

The fact remains, however, that it is important to review each online account and agreement, as well as state law, to determine whether your wishes will be carried out as you intend.

Lock Your Digital Doors

Planning not only helps ensure that your wishes for digital assets are carried out, it also can protect you from postmortem identity theft. More than 2.5 million deceased Americans fall victim to identity theft each year. If an individual is unable to monitor online accounts due to incapacity or death, thieves will take advantage of the situation to take over accounts, open new ones, apply for jobs, get bogus identification cards, and more. Social media profile pages often reveal enough information about a person for thieves to use for fraudulent means.

Many online shopping sites with proprietary cards allow users to purchase items online using a stored card. That is a convenience while you’re alive and active, but after your death it leaves an open window for criminals to rack up thousands of dollars in sales. The only way to guard against this is to name a fiduciary who can access your accounts and close them down before any wrongdoing can occur.

Assuming you’re persuaded that it is vital to account for your digital assets in estate planning, how and where do you get started? Here are some helpful steps:

1. Identify the Assets — Take an inventory of all your online accounts with their passwords. Store them in a safe place, and share the location with a person you’d trust with your life — literally. This could be an attorney, a family member, or a friend with power-of-attorney. You can also use technology to help store passwords for you. Online sites like KeePass or RoboForm will manage and encrypt your passwords, making it easy and convenient to log into accounts because you need only one password to get into your stored list. However, there is still the concern that these systems could be breached. Choosing a reputable company with a good track record obviously is important. Inventory lists should not be stored in a will. Wills can become public record and therefore are susceptible to criminals or to people who are merely curious. Regardless of where your list is stored, make sure to update it regularly.

How To Close Accounts

Facebook

Deactivating, deleting and memorializing Facebook accounts: http://goo.gl/f6bTk

Twitter

Close your Twitter account:http://goo.gl/WJc1l

Contact Twitter about a deceased user: http://goo.gl/8Js0t

LinkedIn

Close your LinkedIn account:http://goo.gl/CgvJV

Contact LinkedIn about a deceased user: http://goo.gl/eJhy6

2. Seek advice from an estate planner, like Trust Point, to help determine how you want your digital afterlife handled. Do you wish your accounts to be deleted or deactivated? Do you want to keep some information private? Should additional information be posted on your behalf, transferred, or downloaded? While most of these decisions are still in the hands of the service providers, it’s good to document your wishes in case the law changes or you fall victim to a sudden catastrophe. We would suggest that more valuable digital assets flow through a trust to avoid probate. A trust can provide orderly management and transfer of assets, digital or not.

3. Appoint someone to manage your digital assets after death or disability. While a digital executor, as such, is still not an option in most states, you can ask your executor or a named person in your will to carry out your wishes. Trust Point, as a named executor, does everything possible in order to respect the wishes of the decedent in regards to their assets, whether those assets are physical or virtual. The ongoing conversations we have with our clients over the course of our relationship with them enable us to understand their values, goals and ultimate wishes. As technology increases, the topic of virtual assets will certainly play a larger part of those conversations.

You may be reluctant to trust another person with your online access information. Perhaps you have heard that the golden rule of technology is to never share passwords or write them down. Attorney/ client privilege may give you some comfort to provide this information. Another option is to give the list of usernames to one individual while the list of passwords goes to another. Only at your death would the two lists be brought together to access the digital assets.

In the interim, back up files and download items that are valuable to you. Get trusted technical instruction as needed. Services like dropbox.com or thedocsafe.com allow users to store important files in the cloud. Just understand that you’ll need to track this diligently, since technology, devices, and accounts are all subject to change.

4. In the interim, back up files and download items that are valuable to you. Get trusted technical instruction as needed. Services like dropbox.com or thedocsafe.com allow users to store important files in the cloud. Just understand that you’ll need to track this diligently, since technology, devices, and accounts are all subject to change.

The Tech-Savvy Executor

What if you are named the executor of an estate and you have to carry out the wishes of a deceased friend or loved one? As with all other estate assets, the time involved in dealing with digital material will depend on the quality of planning the person did prior to death.

Where digital assets are concerned, the main role of the executor is to organize, secure, protect, and preserve these assets, then ultimately distribute or destroy them as specified by the plan. Just getting started is sometimes the most difficult task. If an inventory of the assets is not provided, start by reviewing bank and credit card statements for payments to online services.

High-tech help for this process is available, as well. WebCease (webcease. com) is an online service that will, for a fee, research the digital assets of a deceased person. Fees increase as the search expands, but without proper planning this may be the best way to uncover accounts. Once the list is determined, it will be up to you to request information from each service provider about their policies for handling the account.

Our time here on earth is increasingly spent online. We thus create digital assets that also will increase over time. Preparation for the online afterlife can be as important as other estate planning measures. It will take some time to track your digital assets and determine what should happen to them. Planning is the only way to make your wishes clear. And it might allow you to preserve a precious family heritage.

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Trust Point

We are proud of Trust Point’s century of service reputation of excellence. But, our approach and purpose has always been focused on the future. Not just our own company’s future - but, more importantly, our client’s futures.