Now a days, many Web-based start-ups have their value tied up in digital assets that must also be accounted for during the estate planning process. A whole new specialty of estate planning is cropping up to help entrepreneurs protect these valuable digital assets, which includes domain name registrations, server passwords, online merchant accounts, etc. There are also ways for entrepreneurs to start protecting their digital data without involving an attorney. An online service called Legacy Locker can help you plan for passing on all the digital data that sustains your business. For a $30 yearly fee, or a $300 lifetime membership, you can create an account with Legacy Locker and document all your digital assets. For example, if you own several domain names for your company, you would enter the information for the account, along with the password, and then name a beneficiary to receive those passwords upon your death. Legacy Locker is increasingly being used by estate planners, as an addition to the traditional will. Legacy Locker members must first name a verifier, or someone responsible for confirming their death. The company will not release information to beneficiaries without first receiving a death certificate.
For many Web-based start-ups, a service like Legacy Locker may be sufficient as a preliminary estate plan, especially if the business owner has elected to have his or her business continue running after they are gone. As with any estate-planning document, it's important to remember to keep your account updated frequently. Any time you acquire a new digital asset or a password gets changed, you should go in Legacy Locker and make the change. Legacy Locker also allows members to make their wishes regarding their digital data very clear. For example, if you name your CFO as the beneficiary of the company's bank accounts, you can also leave that person specific instructions for how you want those accounts handled; should they be closed down, or transferred somewhere else? With Legacy Locker, it's up to you how much or how little you want to communicate about how to maintain different aspects of the business.
Dig Deeper: Estate Planning for Your Digital Data
How to Create an Estate Plan: Find An Attorney
Now that you've taken the time to organize all your business assets, it's time to seek out the expert advice of an attorney who can help you put together your actual estate plan. Just because you own a business doesn't mean you need to hire a major law firm to put together your estate, says Delman. In fact, it's best to look for a smaller, local firm to assist. A website called Avvo.com can help you find lawyers in your area that specialize in estate planning. The site also allows you to read reviews from clients and compare, much like a Yelp for attorneys.
Once you have secured an estate planner, he or she will be able to set up your estate so that it complies with the state regulations for different industries. Businesses with locations in more than one state will also need to be cognizant of the regulations from state to state. "If your business is interstate, you must be aware that you might need expert opinion from attorneys in the various states in which you do business to ensure that all your documents are compliant with those state laws," says Gotlieb.
Most importantly, keep up to date on your estate plan. Most attorneys recommend that you revisit your estate plan every three years, as well as any time you have a substantial life change, such as a marriage, divorce, children, etc. Estate planning is a life-long process and it's a good idea to keep an open dialogue with your family, partners, and estate planner as you go along.
Dig Deeper: Selecting an Attorney
Resources:
http://estate.findlaw.com/estate-planning/
An overview of the estate planning process as well as tips on estate tax and creating wills and trusts.
http://forms.lawguru.com/wills_c.html
Online access to estate planning documents, including wills and living wills
http://www.inc.com/estate-planning
A collection of Inc. articles on estate planning and succession.
