5 Reasons Digital Estate Planning Hasn’t Caught On … Yet

July 30, 2011
300px CERN Server 035 5 Reasons Digital Estate Planning Hasn’t Caught On … Yet

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I got a nice note from a Boston University graduate student several weeks ago asking me to address some of her questions about digital estate planning, which in turn triggered this post.  For a summary introduction on this topic, I humbly offer these posts (Digital Assets, Part I, Digital Assets, Part II, and Steps to Preserve Digital Assets) and I also link to three other excellent resources at the end of this essay as well.

The key issues regarding our digital assets is how to protect the existence of our online documents, pictures, emails, etc. after our deaths and how to prevent sites from destroying this content before a decedent’s personal representative either contacts or knows to contact the sites directly.

At this point, demand is almost nonexistent for these services.  We discuss some of the main reasons why below.

Demographics

The people most motivated to get an estate plan are less likely to use the internet.

According to the 2008 WealthCounsel Industry Trends Survey, most estate planning clients “fall into the 50s plus age group, with the greatest number in their 60s”.  According to this Pew Research survey from December 2010, the 50-64 and 65+ age groups use the internet the least of all adult groups.

Avoidance

Anyone promoting digital asset planning needs to deal with the same barriers and objections that traditional estate planning firms experience.

For example, until some event relating to death occurs in their lives, most would prefer to avoid estate planning at all, let alone think about who will deal with their online accounts after the end of their own lives.

Additionally, the task of tracking all accounts and passwords is daunting.  The irony is that many even avoid using online firms that offer to store all passwords in one place because of the time involved in gathering the necessary information.

Fears Prevent Complete Reliance on Online Services

While social media and online storage has exploded as an industry in the last decade, there are many people that still have what they would consider a healthy suspicion of the internet.

Many in the older generations (and even new families) do not appear to rely as much on internet services as our younger generations.  One client indicated that he was not concerned about the deletion of his online accounts because any important document or picture he put online is also safely contained on his local computer or hard-drive.  Another client I spoke to still takes the step of printing out favorite pictures as a means of preserving them, and still places them in photo albums.

Others point out that they never put any sensitive information in emails, and some are even suspicious of online storage sites with even the most advanced of encryption standards because of the threats of the site disappearing during a rough economy or information leaking out through the actions of a rogue employee.  The attitude is “even if there is a one-in-a-million chance” that something will go wrong online, there is still a chance.

For such people, the loss of online data does not create an actionable peril.  Whether their fears are rational or not, there are still too many who will continue to use off-line means to protect their most important documents.

Very Limited Government Reaction

What is the law, really?  Generally, one could look at all federal, state and local statutes as well as caselaw and call it an extensive history of governmental reactions to unfavorable trends or disputes.  These “reactions” or laws are created to protect the populace from harms that result from these adverse situations.

For example, let’s look at the current debate regarding the debt.  If the current national debt ceiling is not raised by early next week then the federal government will likely default on its obligations. Whatever law is passed by Tuesday will be a reaction hopefully preventing the extensive detrimental effects throughout our economy.

On the other hand, digital asset planning, while a concern for individuals nationwide, has not captured the imagination of lawmakers yet.  There have been far too few lawsuits or disputes between individuals and online companies for there to be much demand at all for any governmental intervention.

In fact, just four states, Connecticut, Rhode Island, Oklahoma, and Idaho, have passed any legislation regarding digital assets as of this date.  As pointed out in this post at The Digital Resource, the four laws are quite limited in their scope as well.

Ambivalence in the Legal Profession

Several non-legal online companies are developing alliances and solutions to help resolve many of these digital asset concerns, and most are more than willing to work closely with estate planning lawyers.

However, the legal profession can be slow to embrace change.  The cynical would say that this is because the old guard clings quite strongly to traditions to a fault.  The idealists might counter that we must be careful not to overreact to short-term trends and fads, and instead should wait for some level of permanence before making these adjustments.

Estate planners have already experienced some of the effects of delaying changes to meet demand in the marketplace.  While more people are beginning to see the importance of creating an estate plan, many now avoid law firms completely in favor of cheap software or non-legal online sites.  Despite our protestations in blogs, articles and books, basic economics will tell you that those who lower prices to fulfill an unmet need will be handsomely rewarded.

Are the addition of well-phrased clauses in a will or trust not adequate to help protect a decedent’s wishes for his or her digital assets?  Should lawyers immediately begin to participate in the increasing continuing education offerings regarding digital estate planning?  Should attorneys ally with or subcontract to independent firms that support families’ needs in this area?

If so, lawyers will need to begin to embrace new technologies and ideas in advance of the inevitable time when the younger internet generation begins to look more seriously at their own estate planning needs.

 5 Reasons Digital Estate Planning Hasn’t Caught On … Yet
 5 Reasons Digital Estate Planning Hasn’t Caught On … Yet

Scott

Scott R. Zucker, Esq. is the owner of The Zucker Law Firm PLLC, located just outside the Capital Beltway in Annandale, within five miles of the City of Fairfax, the county seat of beautiful Fairfax County, Virginia. The firm focuses mainly on estate planning services for Virginia, Maryland and Pennsylvania clientele, and seeks to do so in an affordable and approachable way. People interested in learning more can contact Scott by phone or email.

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3 Responses to 5 Reasons Digital Estate Planning Hasn’t Caught On … Yet

  1. World Without Me
    November 29, 2011 at 5:51 am

    Interesting article! Our generation is the first to have vast amounts of digital data and naturally the question of passing on our digital legacy will crop up sooner or later. We must make provisions to pass on our digital lives to our heirs just like we plan for our physical estate. If a person is not comfortable with storing online credentials on a website they may create an excel sheet on their computer or store it on a USB or even on a piece of paper and keep it in a safe deposit box. Digital estate planning websites like world Without Me are also secure for the simple reason that no one can search for a user. So even if you are using the service no one will know of your account’s existence there.

    • Scott
      December 1, 2011 at 5:50 pm

      Thank you for your comment WWM!

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