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New classification of assets in computer age

July 1, 2011
By SYLVIA HELDRETH, Real Estate Law

Q: I have been helping my mother plan her estate. I think we understand the differences between real property like her house and personal property like her jewelry. The challenge is that my mother has all of her records, photos, frequent flier rewards, etc. on her computer. She values her privacy and has not shared her passwords with us. What will happen to her digital assets if she were to die unexpectedly?

A: Anything which is part of the land or attached to a building and is immovable, or can't be removed without damage, is real property. You are correct that your mother's home is real property. The rules of transfer are fairly clear.

Personal property refers to any type of property that can generally be moved including furniture, clothing, jewelry, art, writings, and household goods. There might even be formal title documents that show the ownership and transfer rights of certain personal property (cars, boats) after a person's death. Most tangible personal property will not be "titled" in an owner's name and is presumed to be whatever property he or she was in possession of at the time of his or her death.

Intangible personal property or "intangibles" refers to personal property that cannot actually be moved, touched or felt, but instead represents something of value such as stocks and securities. Rules about transferring ownership of tangible and intangible personal property are also fairly clear.

In today's computer age we have a new classification of assets to address in an estate plan. These are digital assets. Documents, photos, music and personal treasures that were once kept in boxes and file drawers are now stored in computers. They are frequently password protected. Additionally, studies show that of those who are actively online, approximately half conduct their banking and bill paying via the Internet. This is information that an executor needs to settle an estate.

Executors usually have access to this information but privacy laws prevent some Internet companies from releasing user name and password information to executors. If a digital asset is stored on someone else's server, ownership can become complicated. Yahoo mail, for example, has a user agreement provision that specifies that there is no right of ownership transfer. A recent court case tested this and it took a grieving father months of legal effort and expense to obtain copies of the emails his son wrote while serving in the military before his death in battle.

Encourage your mother to record her passwords and store them in a private, secure place that would be accessible to you at the time of her death. Planning for issues of digital assets should be part of every estate plan, especially for those who have gone paperless. Seek the advice of an attorney if digital assets are an important part of your mother's estate.

Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., in Cape Coral.

This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.

 
 
 

 

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