How to Give Away Your Digital Fortune
From iTunes and e-books to Bitcoins, be sure to plan ahead
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.
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.
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.
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.