When you think about estate planning, the first thing that comes to mind is probably your house and an outline of your will that states who it will be passed down to.
While deciding what’s going to happen to your brick-and-mortar property is an essential part of estate planning, you should also consider having a plan in place for your digital assets.
According to inheritance experts from Probate Advance, digital assets are becoming more and more common, especially as technology is now almost an inseparable part of our lives, so even if you don’t have any plan for managing them, you’re probably going to need one sooner rather than later.
The more you immerse yourself in the digital world, the more digital assets you create.
If one day you’re gone without any instructions left on how they should be handled, your heirs may not be able to gain access to them; your assets may even be mishandled.
Here’s what you need to know about the importance of making digital assets a part of your estate plan and how you can do it.
What Are Digital Assets?
A digital asset may refer to a wide variety of electronic records and files stored online, on mobile devices, or on personal computers. Therefore, almost anything you keep a digital record of is considered a digital asset and thus should be mentioned in your estate plan.
Here’s what a digital asset can include:
- Social media accounts,
- Online banking accounts,
- Online shopping accounts,
- Email accounts,
- Website domains,
- Cryptocurrencies (e.g., Bitcoin),
- Digital copyrights and trademarks,
- Online subscription accounts,
- Digital photos and videos.
It’s also crucial to keep in mind that the definition of digital assets changes with technology development.
For instance, when a new digital file format is invented, it can be added to the list of things that fall into the category, and therefore your plan should be updated as well.
What is more, digital assets don’t function in the same way as physical assets.
You can have an email account that you use every day, but it doesn’t mean that you can pass it to someone for them to use it after your death.
Why Are Digital Assets Important?
If you pass away without giving instructions on who should gain access to your digital assets, it can cause confusion among your heirs and even create problems.
As such, it is only reasonable to include all your assets in the will, including everything you’ve created and stored online.
One of the top reasons for including digital assets in your estate plan is simple: you wouldn’t want them to end up with a stranger or someone you don’t trust.
If you don’t make a plan that clearly states what happens to your digital properties, there’s no way of knowing how they will be handled.
After all, we all have personal photos, videos, messages, or just details that aren’t meant to be shared with certain people. Not to mention that some digital assets can be highly valuable.
Additionally, identity theft and fraud can also happen.
Depending on your profession, the investments you’ve been making, or people you’ve been involved with throughout your life, you might be in possession of some sensitive information that’s digitally stored.
This all can be stolen or misappropriated if you neglect to specify who should gain access to it after your passing.
How to Protect Your Digital Assets?
Now that you know how crucial it is to include digital assets into your estate plan, it’s time to learn how to approach this:
Make a List
One of the first things you should do is make a list of your digital assets.
You can use a paper and pen, consult with your lawyer, or create a spreadsheet on your computer, as long as it’s secure and, ideally, additionally protected by a password manager.
Don’t worry if you sit down to make your list and can’t remember every single asset – you can always come back and add them later.
Make a Plan for Your Accounts
Making a plan for your accounts is a pretty straightforward process. Go through the list of assets you prepared and write down whether you’d like them to be continued or shut down.
Some platforms, such as Facebook, allow you to turn your account into a memorial, so it’s also an option.
Don’t share any passwords or account details here, as there is a possibility that at some point, your will might become public.
It’s best to share this kind of information with your lawyer only.
Pick Someone to Carry out Your Wishes
The last big step is to choose your digital executor – the person who will be designated to carry out the wishes that you’ve outlined in your will.
It can be the same person who will carry out the rest of your wishes, but it can also be someone else.
Just make sure that you trust them and that they’re tech-savvy enough to know how to perform all the tasks without getting overwhelmed.
Name them in your will, so they gain authority to access your digital assets.
To sum up, as digital assets become more common and are no longer considered to be a new phenomenon, it might be crucial to include them in your estate plan.
This will help you ensure that they aren’t at risk of getting stolen or lost after you die. Instead, you can think and plan ahead so that you choose who gains access to your accounts and valuable information, as well as what should happen to them.
The laws around protecting legal assets are changing rapidly, so talk with your attorney and create an estate plan that will precisely outline all your wishes regarding the digital part of your life.