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Prenuptial Agreements and Digital Assets: Why You Need to Plan for Them

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b2ap3_thumbnail_Rudy-family-digital-assets.jpgToday’s society largely stays in touch over social media and other electronic means. Individuals may share a number of digital assets or may want to keep them separate. Knowing how digital assets will be treated and divided in the event of divorce or death can provide clarity to this issue. Prenuptial agreements can help safeguard digital assets.

Definition of Digital Assets

Defining a digital asset can be difficult because technology continues to evolve. However, they are often assets that do not have a tangible quality but that may have sentimental or economical value. Digital assets may include photos, video and audiovisual media. They may include emails, computer files and computer folders. These items often have a sentimental attachment to them. In some cases, digital assets can only be accessed through a certain website or other access point. Others may have a greater monetary value, such as electronic accounts, stored media or intellectual property. Some digital assets link to tangible assets, such as online banking, shopping accounts and

Account Restrictions

One way that some digital assets are protected is by maintaining individual ownership. Many digital assets are stored in an individual’s name and are only available to someone with a username and password. The account may contain provisions related to its division or inability to split them. For example, an account may state that it cannot be divided and all assets must remain in one account.

Prenuptial Agreement

A prenuptial agreement discusses how certain assets will be treated during the marriage and after it. It can address existing accounts as well as include information for assets not yet in existence. Prenuptial agreements often discuss bank accounts, real estate and other assets of significant value, but they can also be used to address digital assets and other property matters. Clauses related to digital assets can be centered on the needs of the parties. The prenuptial agreement may state which assets will belong to each spouse. Additionally, it may state that certain assets will be under the complete ownership and control of a specific spouse. It may also state which assets are subject to division in the event of divorce or death.

At the same time, prenuptial agreements can regulate how certain assets will be maintained during a marriage. For example, one party may have control over an account while the other spouse can simply access it. This language can clarify the roles and responsibilities of the spouses.

A prenuptial agreement may also assign a certain value to the property and require the spouse who will not receive ownership in the asset after the relationship to be compensated for his or her share of the property. The value may be based on how much value one of the spouses invested in the asset. Having a prenuptial agreement gives parties the opportunity to discuss digital assets and other assets to create clarity and avoid surprise.

Estate Planning

Another way to address digital assets is to make provisions for them in a person’s will or trust. This is especially important if a person wants to be sure that a certain person inherits them or has access to the account after death.

One way to ensure that these assets are protected is to include specific information that references these accounts. A person may wish to include a list of accounts, user name and password information. Referencing this information and including instructions can ensure that a person’s social media pages and career profiles are handled as the person wishes after death or incapacitation. Additionally, a person may be able to access and distribute images and other digital assets that are currently stored on the cloud.

Inventory Assets

The first step to plan for digital assets is to create an inventory of them. This should include financial accounts, financial management accounts, social media, email and media storage. This list should be kept in a safe place where the person who stands to benefit from this information knows where it is located. If making an inventory for estate planning purposes, the person named as the personal representative should know where the list is located and provide whatever type of access that he or she will need. Any will or trust should contain language that authorizes access. The inventory should be updated periodically as information changes, such as a user name or password. Additionally, it should be updated to consider new accounts, devices and additions that are made throughout time.

 

 

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Guest Tuesday, 13 November 2018