A Digital Asset is everything from domain names and digitally-stored photos to email and social media accounts. As owning digital property becomes the new norm, estate plans need to adapt accordingly.
Many people have wills prepared in the off chance that something happens to them early in their life. Living in the digital age we do today it has become more common to have Digital Estate Plans in place as well.
The importance of having a digital estate plan has grown exponentially over the past decade as technology continues to become a part of our daily lives. This leads to the question: Who has access to my online accounts and how will those accounts be managed and distributed in the event I become incapacitated or pass away?
What are Digital Assets?
Digital assets are electronic records and files that are stored on your computer or mobile devices. Traditionally, someone’s estate consists of a will, trusts, life insurance policies, naming a power of attorney, and any other property or financial assets that person owns. Living in a time where almost everything has become digitized, a majority of these assets can be found online, or can be accessed by a computer or mobile device. A couple examples of digital assets are:
- Email Accounts
- Social Media Accounts
- Online banking accounts
- Photos/anything uploaded on the cloud
- Ecommerce accounts
Underlying financial assets — like electronic bank account statements — may be considered a digital asset; but the actual liquid funds held in the bank account would not be considered a digital asset. An example would be owning cryptocurrency. While the account access platform (i.e. Coinbase) would be a digital asset, the asset itself (i.e. Bitcoin, Ethereum, etc) would be included as part of the estate and therefore subject to a different set of laws.
It’s important to have a digital estate plan because people’s digital footprint grows exponentially as the years progress. This plan may be immensely beneficial to your family further down the road. It eliminates the need to track down passwords and gives your family members and beneficiaries legal standing to access your digital assets.
Creating a Digital Estate Plan
The first step in the planning process is listing out all your digital assets for yourself and your spouse. Many of these will overlap but there certainly can be accounts or assets that are individual to each of you and the other does not have access. Essentially, you want to map out your plan with the following:
- Take inventory of your digital assets.
- Decide where you want your digital assets to go.
- Appoint a digital executor.
- If questions arise, make sure your Digital Estate Plan is legally binding by contacting an attorney.
If one or both of you have a business, make sure to create a separate list for all digital assets for your business. It’s important to have a plan for both your personal digital assets and the ones related to your work or business. While the statements won’t have your login details, they will have your account number, some general account information as well as a contact phone number. Consider doing this for the following:
- Bank accounts
- Debt documents such as your mortgage, credit cards, loans, etc.
- Insurance plans
- Investment accounts
- Retirement accounts
- College-saving accounts
Final Thoughts
It’s important that your Digital Estate Plan is separate from your Will for two reasons:
- Your Will becomes public information and you won’t want strangers having access to significant usernames and passwords.
- You can update your digital Estate Plan on an annual basis as you create and delete online accounts without having to update your Last Will or add additional codicils. Your appointed digital executor should know where you store your digital Estate Plan so that he or she can access it when the time comes.
The best way to help ensure your Digital Estate Plan is safe is by keeping it with your financial planner, safeguarding your information in a password-saving online database or the good old-fashioned way of locking it away in a file cabinet/safe. This way, when the time comes, the people who need to access your information can do so with ease.
Cataloging your digital assets today will get you one step closer to having a comprehensive Estate Plan. With a comprehensive plan in place, you can help family and loved ones avoid dealing with the ordeal of having to comb through years of online account information once you’re gone or physically unable to.
Do you need help creating your Digital Estate Plan? Contact our Humboldt or Clear Lake, Iowa estate planning experts to accommodate any changes in the law or in your digital property.
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