(Source: TechRepublic): Michael Kassner – Estate planning is not always at the forefront of a business owner’s mind; however, in most cases it should be, if the owner’s intention is for the business to remain open.
Good estate planners are quite capable of explaining what is required. For example, Tiffany Knight in her LegalZoom article Estate Planning for Small Business Owners suggests the following are important considerations:
- Minimize estate taxes (significant if business assets are not liquid);
- Handle a sole proprietorship where business assets are not separate from personal assets; and
- Develop a buy-sell agreement (if the owner’s wish is to sell).
Estate planning is unclear when digital assets are in play
Email is one example of a digital asset
Email has been around long enough to come into play when estate decisions are being made, yet, according to Professor Banta, only 39 states have passed a law (similar to this Uniform Law Commission draft) allowing people to specify in their will that the designated executor can access their email and social media profiles.
“In October 2017, the Massachusetts Supreme Judicial Court ruled that an executor could consent to the disclosure of emails on behalf of the dead person whose estate was being managed,” continues Banta. “The case is back before a lower court to decide on other issues, including whether the estate will be able to access the account despite Yahoo’s terms of service agreement.”
Privacy for the deceased is important
Banta contends (and it seems rightfully so) that the privacy of the person who has died—long assumed to not require protecting—in fact, needs protection. “Messages and images are likely to be emotionally important,” mentions Banta. “Also banking, utilities, and other accounts are often linked to an email address; gaining online access to those can help administer a person’s estate.”
The previously mentioned Uniform Law Commission draft addresses this issue by clearly stating that the executor must have specific permission to access the deceased’s email accounts.
Estate planning suggestions
First and foremost, Banta suggests to detail, in writing, what should happen to the digital assets in question—in particular, which accounts the executor can access and which should be deleted. Banta then stresses the importance of ensuring the following:
“Do not list usernames or passwords in your will, because a person’s will becomes a public document upon their death. Instead, consider recording access information for these accounts in a safe place—like password-management software—and leave instructions for your executor to find them.”
Something that may be noteworthy is credits and purchases with digital-media accounts—for example, Google Play or iTunes. The only solution currently available according to the professor is to leave instructions in the will on how to access the value in the accounts and back up the information on an independent storage device.
Another option is to check with the online services to see if the company provides a way to transfer assets. Banta adds that Google has pioneered a method for its users to indicate how they want their account handled in this kind of situation.
Determining what happens to digital assets may not be something time- and money-strapped business owners wish to investigate, though considering those accounts during estate planning will go a long way to keep the business going, whether the plan is to sell or keep the company in the family.