Your 20,000-song iTunes library
is valuable both monetarily and as an artifact of your life, so you’d like to leave it to your children. Legally, you probably can’t, at least not yet. But, as a practical matter, you can share your digital wealth (including ebooks, online photos and other assets) in a limited fashion — as long as you plan ahead.
For those who purchase music, this digital asset may add up to a sizable chunk of change. “I have about 12,000 songs in my library. In theory, in today’s prices, that’s $15,000 worth of music,” notes Ken Moraif, a senior adviser at Money Matters, a wealth-management firm.
Passing On What You Don't Fully Own
The problem is that generally you don’t actually own the digital music and books you buy on your computer and mobile devices — you’ve simply bought licenses to listen and view those products. Plus, the rules governing your account will vary by service provider; it’s all in the fine print of those terms and conditions to which you agreed when you opened the account.
(MORE: 5 Steps to Creating Your Digital Estate Plan)
But there are some ways to share these assets with your heirs and creating a digital estate plan may smooth the process. (For more about that, read my earlier blog on creating a digital estate plan
Digital Music Files
The Apple iTunes terms of service agreement
generally states that your license is nontransferable and will end automatically if you fail to comply with the terms of the agreement.
The agreement “doesn’t seem to contemplate a transfer of the license after death,” said Sharon Klein, managing director of family office services and wealth strategies at Wilmington Trust, in New York City. “It’s silent about what happens when someone dies. It just says you can’t transfer it, period,” she said.
(MORE: Make That Scary But Essential Money List)
Until the language changes (if it changes) or until state laws do a better job supporting executors’ ability to manage digital assets, your safest bet might be to give your heirs the access information for your iTunes account. (The terms of service allow up to five computers on one account.)
Another option with some music files is to save them to your computer or a hard drive, and bequeath that to your heirs, but whether this will work depends on the type of music file.
Generally, you’re not going to be able to transfer your e-books to your heirs, because the service agreements usually say the license is nontransferable and e-books often are protected by digital rights management (DRM) software, so you can’t copy them.
But, like an iTunes account, you could simply give your Kindle, Nook or e-reader log-in credentials to an heir, and he or she can at least read the books you’ve already purchased while your account remains active (which, according this New York Times opinion piece
, may be a long time).
(MORE: Are You Ready to Get a Tablet?)
If you own Bitcoins, it might take some computer expertise to employ some of the highly secure strategies for passing on this digital currency. But there is also a quick and easy way.
Currently, many people store their Bitcoins in a digital wallet, usually via an app on their phone or laptop, said Jinyoung Englund, director of public affairs for the Bitcoin Foundation, a member-supported group that aims to standardize and promote Bitcoin, among other goals.
“If you store it in a digital wallet, you would just have to provide your user ID and your password [to your designated heir] and they can access your account,” Englund said.
While digital wallets do provide some level of security, there is the danger that hackers might access your account. To avoid that problem, it’s possible to pull your Bitcoins — which essentially consist of serial numbers — off the network and put them into “cold storage,” such as in a safe in your house or a bank safety deposit box, Englund said.
“You’ve completely taken [your Bitcoins] off line,” she said. And you can leave those assets to your heirs.
Currently, however, pulling Bitcoins off the network and putting them into cold storage requires some computer-science sophistication. “Because it’s such a new technology, the consumer-focused companies haven’t come along yet to build services to make it super easy,” she said.
Need help? Contact the Bitcoin Foundation
via email: [email protected]
. Also, the Foundation is revamping its website to include a best practices section, including information on how to store your Bitcoins, among other information. Read this story
for more tips on including Bitcoins in your estate plan.
If you’ve posted photos online that you want your heirs to receive, read your terms of service to see what the provisions are for an inactive account. But, it might be easier to simply make backup copies, store them in a safe place and be sure your executor knows where to find such items.
“Maybe [your executor] can’t get access to Flickr, but if I’ve backed up all my photos on a hard drive, then it’s fine,” said Alexandra Gerson, a lawyer with Helsell Fetterman in Seattle.
Grieving families are often shocked to find they can’t gain access to their loved one’s email messages. That said, some companies will provide copies of emails to an executor, though it can be a time-consuming and difficult process. In other cases, the account may simply be deleted.
For example, the terms of service for Yahoo email state that all rights to your account terminate on your death and that the data can be deleted.
Some estate-plan experts advise people to create a digital estate plan
. You name a “digital executor” and state in your will that you’re giving that person the authority to deal with your digital assets. You provide that person with a list of your accounts, including each account’s username and password (such information should not be included in your will), plus instructions as to what you’d like done with each account.
“The mechanism that people are trying to use is to designate that person as an authorized user to try to make that designation compatible with the terms of service agreement and applicable laws,” Klein said.
“Whether providers respect that and it works perfectly or not is yet to be seen, but you have to do the best you can to make it as easy as possible for your designee to access the information,” she said.
That is, naming a digital executor is no guarantee. “Whether that works perfectly if there’s a terms of service agreement that conflicts with that, that’s unclear, but it’s certainly better to be proactive and nominate someone,” Klein said.
“Then that person has the ability to say, ‘This person authorized me to have access.’ That will certainly facilitate things after death,” she said.
Earlier this year, Google eased this process by launching its Inactive Account Manager
. The tool lets you control how your Gmail and any other Google accounts are handled after your death. You dictate who should be notified in the event your account is inactive for a specified period; you also decide whether your trusted contact should be able to download the data, or whether the account should be deleted.
Social Media Sites
With your social media accounts, at this point it appears most sites won’t give another user access to an inactive account, so you may want to ask your digital executor to manage your accounts on your behalf. that is, you provide a list of your log-in credentials for each account, though this could violate the terms of service.
If you don’t provide access to your account, here are the options available to your executor for Facebook and Twitter:
Facebook will delete an account or allow the user’s timeline to be memorialized once the company receives proof of death and proof of the relationship between the decedent and the person making the request. Read more about memorializing Facebook accounts here
Twitter won’t give you access to a deceased relative's account, but the company will delete an account if certain information is provided. Read more about managing a decedent's Twitter account here
This article appeared originally on MarketWatch.com. Andrea Coombes is a personal-finance writer and editor in San Francisco. She's on Twitter @andreacoombes.
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