Most of our lives are digital and on a daily basis, we leave an ever growing digital footprint. This footprint tells a story of our lives that can remain in perpetuity or can be erased in a flash.
So what should our donors think about during estate planning? What can charities do to nudge donors to think beyond their physical assets and include their digital assets in their estate planning?
First, let’s discuss what constitutes digital assets.
Digital assets are intangible things such as social media accounts, electronic communications (emails, texts), cloud storage, photos, accounts with retailers and loyalty programs, cryptocurrency, non-fungible tokens (NFTs), etc. are all examples of digital assets. Some of these can hold significant financial value, while others hold more of a sentimental value. Either way, they tell a story about the asset owner and are important in estate planning to ensure that privacy and local laws are respected.
But it’s not that simple
Everyone is bound by the asset’s user agreement. You know, that long, fine print filled with legalese that *no one* reads when we open an online account?!
Some of these agreements restrict the right of the user to access an online account on death. When a person passes away, these agreements bind the estate and can force the executor into long battles to gain access to the account, often in the jurisdiction of the internet company with whom the user agreement was made. Depending on where the donor lives, their executor may not be able to gain access therefore it’s important to verify laws in your market.
How can charities help donors?
- Nudge your donors to think about their digital footprint by reminding them to address this issue with their legal advisor. Assuming this is permissible in the donor’s jurisdiction, the will clause must give explicit authorization to the executor to administer digital assets and instructions on their transfer or destruction.
- Donors can draft a separate list of their digital assets to annex to the will.
- Remind donors to review the asset’s privacy settings as some social media platforms allow the user to designate a legacy contact or the configuration of an inactive account manager.
- If you offer your donors a will writing manual, make sure you add digital assets. I have updated the GlobetrottingFundraiser Will Writing Workbook template and you can download it for free on my Resources page.
Consideration of digital assets is now a necessary part of a complete estate plan. This is a rapidly evolving area of the law, and one that is increasing in importance each year. But while it can be a complex and challenging issue, it also presents an excellent opportunity to reflect on the things that mean most in our lives.