An estate plan usually focuses on tangible property like jewelry, artwork, money, and vehicles. However, in this age of technology, its important to remember to include your digital assets. Digital assets are everything we own online. Because we spend more time on computers and smartphones than ever before, you may not realize how much digital stuff you own. Photos, videos, online accounts, cryptocurrency, nonfungible tokens (NFTs)etc, all these are part of your digital assets!
Why Is It Important to Plan for Digital Assets?
Planning for digital assets is important for several reasons. First, without a plan, digital assets may get lost in the Internet and not pass to your loved ones after your death simply because no one knows they exist! Second, planning now means your family will not have to worry about hunting for these items when you pass while also grieving a beloved family member. Third, like most adults, you probably want certain parts of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wanted to keep secret. Finally, planning now can minimize the risk of identity theft, which happens to 2.4 million deceased Americans each year. Keep reading to learn more about why it is important to include digital assets in your estate plan and how to account for them.
Digital Assets: What Are They?
Instead of photo albums, videotapes and DVDs, most of our family photos and videos are now digital. Even if they lack monetary value, they certainly have sentimental value that you want to preserve for your family and friends. Social media accounts containing your photos and videos can also have value to your loved ones when you are gone. For example, a Facebook account can serve as a memorial after you pass away. When you think about all the other accounts you log into (more than 130 on average), the list becomes quite lengthy.
Digital assets that you may own include:
- Social media accounts (e.g., Facebook, Twitter, LinkedIn)
- Financial accounts at brick-and-mortar and online institutions
- Business documents and other files stored in the cloud
- Cryptocurrency
- NFTs
- Databases
- Device backups
- Internet domain names and uniform resource locators (URLs)
- Streaming service accounts (e.g., Netflix, Peacock, Hulu)
- Merchant accounts (e.g., Amazon, Etsy, eBay)
- Gaming tokens
- Virtual avatars
- Points-based loyalty programs (e.g., for groceries, gas stations, airlines, and hotels)
- Rights to intellectual property, artwork, and literature
- Online betting accounts
- Monetized video content
Including Digital Assets in Your Estate Plan
Taking inventory of your digital assets may take some time, but it is worth it. If something happens to you, your estate planning attorney or another trusted person should have complete access to your online footprint. This includes usernames and passwords for all accounts. You can use tools such as Dashlane or the password manager integrated in your to simplify the storage of usernames and passwords.
In addition, you should continuously back up all your digital assets, including photos and important documents, to the cloud, and ensure that your trusted person can easily access them when the time comes.
Because they are not controlled by governments or banks, cybercurrency and NFTs must be handled carefully. You can’t call customer service to reset your password if you forget or lose it. NFT and cryptocurrency passwords should be stored online in a “hot wallet,” or in an offline device known as a “cold wallet.” Either way, someone needs to know how to access your passwords when you cannot.
Other estate planning considerations for digital assets include:
- Your estate plan can provide that your digital possessions be handled by one or more cyber successors who can distribute your digital assets like tangible property.
- One cyber successor can control your Instagram account, for example, while another can take possession of your Bitcoin.
- Keep in mind that passwords should not be included in your will, especially regarding cryptocurrency, because they could be made public when the will is submitted to probate court.
- Consider how technologically savvy a person is before appointing that person as your cyber successor.
Next Steps for Your Digital Assets
Talk to your estate planning attorney about your digital assets and cyber successors. Have a conversation with potential cyber successors about how they would handle your assets, and make sure that they would carry out your wishes before appointing them. Digital assets can be placed into a trust or distributed through your will, or you could grant access to them through a power of attorney. With the help of an experienced estate planning attorney, you can feel relieved that your digital assets will be easily located, managed, and passed to your loved ones.
Schedule a free initial call with me to find out more about how to plan for your digital legacy. Email me at: [email protected], or visit the www.igslegal.com to schedule a call directly.
This post is not intended as legal advice, please consult an attorney to plan for your digital legacy.
