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Passing on Colorado digital assets

On Behalf of | Jul 25, 2019 | Estate Planning

Estate planning has traditionally dealt with inheritance or preserving physical assets, such as a house or family heirlooms. Wills and other important estate documents now must deal with the reality that people transact their business and other parts of their lives online. Addressing digital assets helps assure that family members can access domain names, email and social media, electronically stored media, records and passwords to important accounts.

There are several obstacles to gaining access to important information and assets, especially if a person kept most of their records online. First, family members may not access accounts without having current passwords. Encryption may protect digitally stored data, but prevent access. State and federal laws prohibit unauthorized access or forbid online account services providers, such as Google and Facebook, from granting access to photos, email messages or other information.

Estate planning can allow access to digital assets and lower administration costs. Making a list of all the important passwords, online accounts, digital property and domain names is an important first step. The list should be kept in a secure place and family members must know how to access it.

Next, a person may have purchased a nontransferable assets from online music vendors and other sources believing that they bought a digital asset that they own. Checking agreements for these vendors or other digital assets will disclose whether it is an asset or a just a use license.

Any digital assets stores in the cloud should be regularly backed up to a local computer or storage device to assure that family members and fiduciaries can access them. This is especially important for electronically scanned and significant documents, such as bank and account statements, birth certificates, insurance policies, passwords, tax records and wills.

Finally, it is important to update wills, powers of attorney, revocable trusts and other estate documents. These documents should contain authorization for providers to divulge the contents of electronic communications to appropriate individuals and for fiduciaries to bypass, recover and reset passwords. It may be appropriate to restrict individual access to some accounts, however.