Take Special Care with Your Electronic Assets

 

 

Transcript:

Hi, my name is Jordan Flake. I’m an estate planning attorney for Clear Counsel Law Group.

As our technology advances, we also have new frontiers in estate planning that attempt to respond to this technology. Obviously, the technology outpaces the estate planning, and the estate planning just tries, sometimes clumsily, to keep up with those situations.

That’s what we have in the case of electronics and electronic information, I guess what I would call electronic assets, if you’ll think of it like that.

 

An Example of an Electronic Asset

If you think of the old days, you would maybe … Let’s say you’re a photographer and you take a bunch of photos and they’re really beautiful.

In the old days, if you had a box up in your attic, you’d say, “My photos that I took” … You either sell them during your life, or you give them away during your life, or you have a box up in your attic that has all these beautiful photos, some of which might be worth money and you say, “I decided to give this to my son, Brian.”

Then Brian could go up into the attic and take that box of photos and say, “Okay I have this box of photos.”

What if in today’s world, I say, “I want my photos to go to Brian,” but before I die I give my hard drive to my son, Jared. Jared has a hard drive that has all of my photos on in, and Brian has the photos that are sitting there in a box.

Who really is entitled to those photos?

Then Jared decides to sell all of those electronic file photos to these photography websites and magazines who pay him a lot of money for it. Then Brian gets really mad and says, “Dad specifically gave me all his photos.” Jared says, “No he didn’t.

He gave me his hard drive where all the electronic copies were held, and you could have sold those photos off to those websites and those magazines if you wanted to, but you just kept them in the box.

 

Why You Want to Discuss Electronic Assets With Your Estate Planning Attorney

You can kind of see how that’s a weird scenario where the existence of an electronic asset, where as before you just would’ve had a physical asset, really creates a potential ambiguity for your clients.

What you’ll want to do in each of these cases, is meet with an attorney who is sophisticated enough to understand some of those subtleties and have a bigger picture about how might this instruction have been misinterpreted.

Just taking this example, I would for example walk the client through and say,

“All right. You want your photos to go to Brian. What exactly do you mean by that? You have a box in your attic, but you also have potentially a hard drive, or maybe you emailed a few of these out to your family and said hey look I went to Yellowstone this last weekend and I took this amazing photo. Does them having a copy of that constitute basically the right to use this photo and to re-sell it?”

We really have to draw back and drill into it and say, “Okay how do we define what you’re actually giving away when you’re giving away this photo of yours?”

It could be more than just a photo. It could be, say your mom was really good at some administrative process and she created several different workbooks or outlines on how to deal with this complex administrative process, then she printed those out.

She gives them to Brian again. Brian gets the printed copy and Jared gets the computer hard drive that has all the electronic copies on it.

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This situation is happening more and more, that people have things that are actually valuable that exist both in the physical world and strictly in the electronic world. It’s important to meet with an estate planning attorney so that you can delineate what to do in each of those situations.

 

How We Help Keep Your Digital Assets Safe

While I’m on the topic of computers and computer hard drives, with increasing frequency we’re seeing situations where people don’t leave adequate information about where their electronic assets are held or kept.

A simple example of this is passwords. There might be websites that are hosting valuable digital assets or electronic assets.

There could be, for example, an individual who has several profitable websites that are membership-paid websites and they’re the domain holder and user and operator for these websites and they’re receiving income from them.

What happens if that individual passes away?

Who is going to be capable of going in an managing those websites and handling everything that needs to happen so that they’re either wound down properly and the assets are liquidated, or they continue to run and create a profit?

 

Estate Planning Has Changed Quite a Bit Recently

These are some of the types of questions that you need to ask that you wouldn’t have had to ask 20 years ago.

There’s a lot of different resources at our disposal to make sure that all of the passwords are written down, all of the websites are written down properly, all of the electronic and digital assets are identified specifically.

We can have different web services that will be the main hub for all of your passwords and all of your websites.

There’s just really a lot of different options, so it’ll be up to you to come meet with us to determine how to make sure that you don’t fall into any of these ambiguities with your digital assets. I’d be happy to meet with you and discuss this. You just have to be forward thinking about these things, because technology does move very fast.

Thanks so much.

 

Clear Counsel Law group

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