In the days where vinyl records were king your living room shelves may have been filled with your music library. Today shelf space is less of a concern for our music because more and more people utilize their computer to store their digital music library. You may now be asking yourself, what does music have to do with estate planning? The answer is the digitalization of music is a great representation of how our assets are transitioning to a digital format.
Some see the purchase of digital music as just an evolution in efficiency. While it may be easier to purchase a new album with the click of a button, your ownership rights have changed dramatically with the involvement of digital music purveyors like Apple iTunes or Amazon. When you purchase a CD or record you own that physical item. Under copyright laws you have the right to lend the CD to a friend, you can sell it to someone, or you can give it away. Your rights over your iTunes library are very different than when you purchase a CD or record because of the Terms and Conditions you agreed to at the time of purchase. Without delving too far into the iTunes user agreement legalese, you in essence only purchased the right to listen to the music, nothing more. You cannot resell the digital music, nor can you transfer your interest to another party. If this comes as a surprise to you, it's probably because you (like millions of other users) failed to read the lengthy terms and conditions of iTunes. Now let’s think about that again, you can’t transfer your digital music to another party. That means that when you pass away, your user license expires and cannot be passed to your heirs. While this may be of minimal concern to you today, the trend of granting access to digital assets instead of ownership is likely to continuing growing.
The term digital asset includes sent and received emails, email accounts, digital photographs, digital videos, gaming accounts, software licenses, social-network accounts, file-sharing accounts, financial accounts, domain registrations, Domain Name System (DNS) service accounts, blogs, listservs, web-hosting accounts, tax-preparation service accounts, online stores and auction sites, and online accounts. Not all digital assets have the same "use" vs. "ownership" restrictions as iTunes, but you should be aware of your rights to access these digital assets at your disability and death.
Virginia’s General Assembly has recently passed legislation to address the accessibility of digital assets during disability and death. The Uniform Fiduciary Access to Digital Assets Act now outlines the powers and process of executors, agents acting under a power of attorney, or trustees, so long as the authority is granted in the original estate planning document. If the estate planning document (durable power of attorney, last will and testament, or trust) does not grant this authority to the person acting on behalf of the incapacitated person or decedent, then the court can be petitioned to grant access to the digital assets. Even though the Uniform Fiduciary Access to Digital Assets Act is new legislation for Virginia, JGB estate planning documents have addressed digital assets access for agents, executors and trustees in our documents for quite some time.
Johnson, Gasink and Baxter, LLP is currently conducting document reviews for all clients whose documents were completed 5 years ago. If you have concerns over the funding of your trust, who your trustees/executors/agents are, or the distribution pattern of your plan, please contact our office to schedule a document review appointment.
The attorneys of Johnson, Gasink and Baxter, LLP will be presenting 3 hours of continuing education for financial advisors, insurance advisors and CPAs this fall in Virginia Beach, Richmond and Williamsburg on September 13th, 20th, and 27th, respectively. Further information will be provided in the coming months.