Digital Assets in Estate Planning
With the world becoming more integrated online, many valuable possessions have now become digital assets. Families today store much of their information and personal property digitally. These may include family photos, purchased music or movies, and important data files. However, online assets are protected with passwords which can make it difficult for family members to access in the event of your passing.
What are Digital Assets?
A digital asset is any electronic record to which a person has a right or interest - not including an underlying asset or liability unless said asset or liability is itself an electronic record.
Social media accounts
Online banking accounts
Online subscription-based accounts
E-Commerce or marketplace accounts
Photos saved online
Online accounts for utilities
Loyalty program benefits
Any other personal information stored digitally
Challenges Digital Assets Create
Many challenges arise from digital assets.
Family members may not know passwords to access email accounts or manage financial accounts.
Passwords can also prevent family members from paying taxes or utility bills online.
Criminal statutes and data privacy laws may provide additional protection for your data, while simultaneously creating additional prevention from your family’s access.
By drafting a digital estate plan, you can provide your family with the necessary authority to access digital assets.
What is a Digital Estate Plan?
A digital estate plan will allow your family to handle your digital assets according to your instructions. This will allow them to access or close any of your online accounts. Like traditional estate plans, you can appoint an executor to manage your digital assets. The digital executor should be someone you trust to ensure that your assets are properly handled since it is likely they will contain private and personal information.
How do I Create a Digital Estate Plan?
To begin the estate planning process, you must take inventory of your digital assets. It will then be necessary for you to decide whether to allow your family to continue using the accounts or to close the accounts out completely. You may also choose to allocate certain access to certain individuals. It is also advisable to back up information on the cloud if it is information that you wish your family to have access to, as an added precaution. Once the estate plan is created, it will be important to store the document in a place the digital executor can find while still protecting the security and sensitive nature of your digital assets.