Instagram, Facebook, Twitter, LinkedIn, YouTube and TikTok – influencers are using these social media platforms in the approximately $10M influencer industry. By 2022, this industry is expected to rise to approximately $15M. Influencers do not hold traditional jobs or positions and are paid in various ways, including through affiliate links, blogs, paid campaigns, partnerships and collaborations, as well as independent brands.
Influencers vary in size and reach, from niche to super influencers, and the most successful have a very diverse portfolio of assets. In traditional estate planning, we look at real estate, checking and savings accounts, IRAs, 401ks and life insurance.
With influencers, these portfolios look much different, consisting of cash, securities, luxury real estate, luxury vacation homes, artwork, high-end clothing, handbags, and jewelry, and investments in brands. Influencers themselves are their own asset; their brand consists of their social media image.
While influencers are similar to celebrities, the way influencers do business, their compensation and the complexity of their asset holdings present unique challenges making estate planning even more critical. Here is a look at some of the top considerations for social media influencers’ estate plans:
Privacy
Influencers are out there on social media seemingly exposing their lives to the world. Privacy would not seem to be an immediate concern for an influencer. The more authentic influencers appear on social media, the greater their successes in promoting products. While influencers expose their lives on social media, they may not want the details of their business or assets exposed. This is where proper estate planning is key. A simple estate plan with a will would expose all their assets to the public record should something happen to them. A trust would reduce this exposure by possibly avoiding the probate process entirely.
Right of Publicity & Domicile Planning
Domicile planning for an estate has many benefits, including income and estate tax savings. The right to publicity (the right to control and profit from the commercial use of someone’s name, likeness, and persona) is impacted by domicile as well. State statutes and case law control this right. These laws vary widely from state to state. For example, some states such as California allow the use of someone’s right to publicity for up to 70 years after death, while Ohio allows the use for up to 60 years after death and New York does not allow any rights after death. It is important to evaluate these laws where the influencer is domiciled. This allows the beneficiaries of the influencer’s estate to monetize the continued use of the deceased influencer’s persona and prevent other individual’s from doing so without authorization.
Estate Taxes
We generally think of real estate and financial accounts as affecting the value of an estate. However, the value of the right of publicity has value and will be included in the deceased influencer’s gross estate for federal estate tax purposes. Proper planning including this right of publicity can reduce the influencer’s taxable estate. The influencer should also consider domicile in relation to estate taxes. Estate taxes vary widely with some states having no estate tax and others still having an estate tax in effect.
Digital Assets
Digital assets are unique and present complex privacy issues in estate plans. Most states, including Ohio, have adopted a form of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). As defined by RUFADAA, a “digital asset” is an electronic record in which an individual has a right or interest. It does not include the underlying asset or liability, unless that asset or liability is an electronic record. A few states, including Massachusetts, remain outliers and have not adopted a version of the RUFADAA yet.
Digital assets are critical to influencers’ business models – these assets include email accounts, social media accounts, digital photos, website domains, blogs, cloud storage and blockchain. For influencers, these digital assets have significant value and heirs and fiduciaries need access to manage these assets after death. Informal access with passwords is risky and may be considered hacking under the technology custodian’s Terms of Service punishable under federal law.
That is where RUFADAA provides clear guidance on who can access these assets. RUFADAA allows access through the following methods in the order below:
- Online tools – Such as Facebook’s Legacy Contact or Google’s Inactive Account Manager. The designations made in these “online tools” are binding, much like beneficiary designations, and control the disposition of these online accounts over an estate plan.
- Estate Planning Documents – If an influencer or individual does not use an “online tool” or one is not available, an estate plan can authorize access to digital assets through estate planning documents, such as a Power of Attorney (during lifetime) or Will or Trust (after death). For example, Instagram does not have an online tool available and allows a Fiduciary to access the social media platform with a death certificate and Fiduciary documentation.
- Terms of Service – If the influencer or individual has not used an online tool and has no estate planning documents allowing access, the technology custodian’s Terms of Service will dictate the access. These terms are usually not disclosure friendly and usually prevent any type of access.
If you are an influencer and have questions about estate planning, or an individual who would like to plan their estate with electronic assets in mind, please feel free to reach out to Wealth & Estate Planning attorney Erika Apelis at efa@kjk.com or 216-716-5637.
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