Even if your estate planning documents cover the asset in question, each asset category has its own set of rules. Cars are different than bank accounts. Real property is different from retirement plans.So, what happens to all the assets you've created on the Internet: your email addresses, your PayPal account, your Facebook or MySpace profile or anything else that is online and requires a password? The answer is that your Trustee or Executor has the authority to transfer them or wind them up. But how exactly does he or she do that?
PC World has an article about a new company Legacy Locker that is slated to open for business in April 2009 which wants to address these issues with estate attorneys and their clients.
It is an interesting concept since most of the websites we use on a regular basis have little-to-no provisions in place on how to transfer account information in the event of death or incapacitation.
For the PC World article see:
http://www.pcworld.com/printable/article/id,161089/printable.html
According to its website, Legacy Locker is a secure way to pass your online accounts to your friends and loved ones. They describe it to be like a digital safety deposit box - you can put all your online accounts (emails, photos, social networks, everything online that requires a login) in it. For every account you store, you can assign a beneficiary, someone to whom you want to entrust your digital assets for the future. In the unfortunate event of your death or should you become incapacitated, Legacy Locker claims that it will securely pass your account information on to your named beneficiaries. Their website is: https://www.legacylocker.com/
Legacy Locker indicates on its website that it has lifetime and annual fees in addition to free accounts. The electronic age will continue to present new issues for estate planners to address in helping to help solve these problems. Since the company has yet to begin offering services, we cannot comment upon them but the idea is excellent and often overlooked in this digital age. Legacy Locker is also offering to email letters and videos to loved ones and beneficiaries.
Planning issues abound with respect to one's "digital estate" depending on one's online presence. Would one want a designated person to go into their email account and delete all the existing emails and cancel the account? Would you want to designate the person to answer all outstanding emails and access the contact list in order to contact friends and colleagues for service arrangements? Would you want to designate who could takeover your blog? Who will own your domain names?
Practically, to implement transfer of passwords and one's digital estate would not require a separate online company. However, the decedent would have to keep good records of the online accounts and the passwords to control them. In our experience the ability of clients to keep accurate records varies greatly from client to client.
It appears that Legacy Locker is seeking to be a one stop shop for online accounts and digital property and make it simple for individuals although one could accomplish the end result without them. It will be interesting to see if the general public finds this to be helpful, or an incredibly risky way of sharing what could be extremely confidential information.
Certainly, these days people share information on line in ways that a mere decade ago would have been considered rash (remember when online banking was exotic?). It will be interesting to see if this concept catches on or ends up as another Internet experiment.
Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Pasadena and surrounding areas. The firm website is http://www.moravecslaw.com/
