In today’s digital age, our lives are increasingly intertwined with technology. Did you know that the average person has over 130 online accounts? (1) From social media profiles to cryptocurrency wallets, these digital assets have become an integral part of our lives – and our legacies. But have you considered what happens to these assets when you’re no longer here? How will your loved ones access your online accounts, manage your digital finances, or preserve your digital memories?
As we navigate this new frontier of estate planning, it’s crucial to understand the complexities and considerations surrounding digital assets.
Understanding Digital Assets
Digital assets encompass a wide range of online accounts and content, including:
- Email accounts
- Social media profiles
- Online banking and investment accounts
- Cryptocurrency wallets
- Digital photos and videos
- Domain names and websites
- Online business accounts
- Digital music and book libraries
These assets can hold significant monetary and sentimental value, making them an essential consideration in your estate planning process.
Key Considerations for Digital Asset Estate Planning
1. Inventory Your Digital Assets
The first step in digital asset estate planning is to create a comprehensive inventory of your online accounts and digital property. This inventory should include account names, usernames, and the type of asset associated with each account. However, for security reasons, it’s crucial not to include passwords in this document.
2. Understand Terms of Service Agreements
Many online service providers have specific policies regarding account access after the owner’s passing. For example, Facebook allows users to designate a legacy contact, while Google offers an Inactive Account Manager feature. Familiarize yourself with these policies for your key accounts to ensure your wishes align with the platforms’ terms of service.
3. Designate a Digital Executor
Consider appointing a digital executor – someone who will be responsible for managing your digital assets after your passing. This person should be tech-savvy and trustworthy, as they’ll be handling sensitive information and potentially valuable assets.
4. Provide Clear Instructions
Leave detailed instructions for your digital executor regarding how you want your digital assets managed. Do you want certain accounts closed? Should some digital memories be shared with family members? Clear guidance will help ensure your wishes are carried out effectively.
5. Address Digital Assets in Your Will
While a separate document detailing your digital asset plan is helpful, it’s also important to address digital assets in your will. This provides legal backing to your wishes and helps avoid potential conflicts.
6. Consider Password Management Tools
Password managers can be valuable tools for organizing and securely storing your login information. Some password managers offer features specifically designed for digital estate planning, allowing you to designate beneficiaries for certain accounts.
7. Regularly Update Your Plan
The digital landscape is constantly evolving, with new platforms and types of digital assets emerging regularly. It’s important to review and update your digital estate plan periodically to ensure it remains current and comprehensive.
Legal Considerations
The legal landscape surrounding digital assets in estate planning is still evolving. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been adopted by most U.S. states, providing a framework for how digital assets should be treated after death. However, laws can vary by state, and international digital assets may be subject to different regulations.
Securing Your Digital Legacy
As our lives become increasingly digital, the importance of including digital assets in our estate planning cannot be overstated. Have you considered the full scope of your digital footprint? How would your loved ones navigate your online presence in your absence?
By taking proactive steps to inventory, protect, and provide instructions for your digital assets, you can ensure that your digital legacy is managed according to your wishes. This not only protects potentially valuable assets but also spares your loved ones from unnecessary stress and complications during an already difficult time.
The world of digital asset estate planning may seem complex, but it’s an essential component of a comprehensive estate plan in the 21st century. If you’d like to discuss this topic further or explore how it fits into your overall financial plan, we invite you to schedule a complimentary meeting. Together, we can help ensure that your estate plan fully reflects your digital life and legacy.
Source:
(1) Bitwarden. “2022 Password Decisions Survey.” Bitwarden, 2022, bitwarden.com/blog/world-password-day-2022/
Our firm does not offer tax, legal or estate planning advice or services. Always consult with your own tax and legal advisors.
