What is property?

Posted by on Mar 11, 2014

What is property?

It’s so much more than what many people think of when they hear that word. They may think it’s the house or their Tahoe time share or the motorcycle in the garage.

Property is a legal term meaning anything one owns. In the law, traditionally, property falls into three categories:

  1. Real property which is buildings and land—you can pick up a brick or a clump of dirt—it’s “real”;
  2. Intangible personal property, which is cash and its equivalents. It’s sort of invisible (and, yes, it can easily disappear); and
  3. Tangible personal property: that’s anything you can touch, such as jewelry, artwork, furniture, tools, and so on.

We’ve also come to understand that property includes intellectual property and many of us have it: copyrights, patents, creative works that may or may not be officially trademarked or copyrighted but that “belong” to us and we know that because it matters when someone steals our ideas or words or images.

Increasingly, these days, there’s a new type of property and we don’t yet know exactly what to call it or how to pass it along or have it managed with an estate plan.

It can be called “digital assets.”

When someone dies, what happens to their on-line bank accounts, their personal and business web sites, their Facebook page, their on-line retail accounts?

It can be a problem for Trustees and Executors who may be hindered or blocked entirely from getting access to such things. And time is often of the essence as a Trustee may need to get access to a Decedent’s on-line accounts in order to pay bills, pronto.

Or it may be that what’s really valuable in someone’s estate is not their condo or their kitchenware but a treasure trove of family photos on a web site that no one can open.

Over the years, I have suggested that clients keep a running list of their most important passwords and access data, accessible to whoever will serve as their Executor/Trustee.

I think it’s important for estate planning clients to become much more concerted about this in at least two ways:

  1. We need to plan for who will inherit anything we have of value on-line, whether that be digital photos or an on-line business.
  2. We need to plan for who will administer our wishes regarding our on-line assets.

What if the person you’ve named as Trustee/Executor is unsuitable for dealing with a jumble of passwords or you really don’t want them to see what you’ve been posting on some far-flung website because it’s embarrassing?

I think it’s time to consider nominating a specific person, who may be called a Digital Fiduciary, to handle our on-line affairs if we become incapacitated or after our death. It may or may not be the same person(s) you’ve chosen to administer the rest of your estate.

I don’t know the answer to how to keep passwords secret and also make them available to such a friend/fiduciary.

I’m a modest user of on-line resources. I have an on-line bank account, two web sites, three Facebook pages, this e-newsletter, a new blog coming, an on-line library card, various retail store accounts, subscriptions to numerous blogs and publications, my knitters’ Ravelry account. It starts to add up. I really need to sit down and think about how much of what I “own” and “do” is now on-line. How would my Trustee/Executor begin to deal with this?

Clients of mine know I like charts and diagrams. I’m working on a very simple Word document chart that I can use to list relevant passwords, contact info for web hosts, and so on.

You may want to make your own such list using Word or an Excel spread sheet. Put it in a safe place or on a flash drive accessible only to someone you trust.

I can’t address this with all of you individually in this e-newsletter.

I can say this: Start planning for your digital information. Who will administer it if you can’t, and who will receive it when you’re gone?

If you’d like to update your estate plan to include planning for digital assets, please feel free to schedule an appointment.