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In today’s digital age, many of our assets and personal information exist online. From financial accounts to social media profiles, these digital assets are an essential part of our lives—and they need to be addressed in your estate plan. Without proper planning, accessing and managing these assets after your death can become a complicated and stressful process for your loved ones.
This blog post will explore why digital assets are an important part of estate planning, what you should include, and how to ensure your wishes are carried out.
What Are Digital Assets?
Digital assets encompass a wide range of electronic data, accounts, and files. They can be categorized into three main types:
Financial Digital Assets
Online banking accounts
Cryptocurrency wallets (e.g., Bitcoin, Ethereum)
PayPal, Venmo, and other payment platforms
Investment accounts accessed online
Personal Digital Assets
Email accounts
Social media profiles (e.g., Facebook, Instagram, Twitter)
Cloud storage accounts (e.g., Google Drive, Dropbox)
Photos, videos, and personal documents
Business and Intellectual Property
Websites, blogs, or online businesses
Domain names
Digital creations, such as ebooks, designs, or music
Why Include Digital Assets in Your Estate Plan?
1. Access for Your Loved Ones
Without proper authorization, family members may struggle to access your accounts due to privacy laws or encryption.
2. Financial Value
Some digital assets, like cryptocurrencies or online businesses, may have significant monetary value that needs to be accounted for in your estate.
3. Protect Your Legacy
Proper planning ensures your personal and professional digital presence is managed according to your wishes.
4. Prevent Identity Theft
Addressing your digital assets can help prevent fraud or misuse of your information after your passing.
Steps to Include Digital Assets in Your Estate Plan
1. Take Inventory of Your Digital Assets
Create a detailed list of all your digital accounts and assets, including:
Account names and URLs
Usernames and passwords
Security questions or recovery options
2. Identify Key Contacts
Designate a digital executor who will manage your digital assets. This individual may or may not be the same person as the executor of your will.
Choose someone who is trustworthy and tech-savvy enough to handle online accounts effectively.
3. Provide Access Instructions
Store login information securely in a password manager or include them in a document stored in a secure location, like a safe deposit box.
Avoid including passwords directly in your will, as it becomes a public document during probate.
4. Include Digital Asset Provisions in Your Will
Specify how you want your digital assets managed, transferred, or deleted. For example:
Who inherits your cryptocurrency or online business.
Whether social media accounts should be memorialized or deleted.
How to handle sensitive files stored on your computer or cloud accounts.
5. Create a Digital Asset Trust
For high-value digital assets, consider placing them in a trust to ensure smooth management and transfer without going through probate.
6. Understand Platform Policies
Review the terms of service for each platform, as they often dictate what happens to accounts after death.
For example:
Facebook allows users to choose a legacy contact or request account deletion.
Google’s Inactive Account Manager lets you decide who gains access to your account.
7. Update Regularly
Digital assets and passwords change frequently. Review and update your digital inventory and instructions regularly.
Common Mistakes to Avoid
Neglecting to Include Digital Assets
Many people overlook digital assets in their estate plan, leaving loved ones unprepared to handle them.
Failing to Appoint a Digital Executor
Without a designated manager, accessing and managing digital assets can become a legal and logistical challenge.
Storing Passwords in the Will
Including sensitive information in a will can compromise your digital security and privacy.
Ignoring Cryptocurrencies
Cryptocurrencies require specific access keys, and without them, the assets may be irretrievable.
Not Addressing Online Business Interests
Failing to plan for the transfer or sale of an online business can result in lost income or legal disputes.
Tips for Securing Your Digital Estate
Use a Password Manager: Store all login credentials securely and provide access instructions to your digital executor.
Back Up Important Data: Ensure essential files, photos, and videos are stored in multiple secure locations.
Communicate Your Wishes: Discuss your plans with your executor or family to avoid confusion later.
Consult an Attorney: Work with an estate planning attorney to ensure your digital asset plan complies with state and federal laws.
Incorporating digital assets into your estate plan is an essential step in protecting your legacy and easing the burden on your loved ones. By taking inventory, designating a digital executor, and providing clear instructions, you can ensure that your online accounts and electronic data are managed according to your wishes. For personalized guidance, consult an experienced estate planning attorney who can help you navigate the complexities of digital asset management.
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