How much time do you spend online? The answer may surprise you.
But the truth is that we all spend a substantial amount of time in cyberspace in our increasingly digitized world. You share precious memories on social media, manage your financial accounts online, and may even run businesses entirely on the web. This is how we use our digital assets, and they’re becoming an increasingly important aspect of estate planning.
Failure to protect these assets can mean they are lost forever after your passing or incapacitation—or worse. Digital assets like bank and trading accounts can fall into the wrong hands. But this is where a carefully crafted digital estate plan comes into play.
What Is Digital Estate Planning?
Digital estate planning is the process of gathering and distributing digital assets like social media and bank accounts to the right beneficiaries after your passing or incapacitation. As these can hold significant monetary or emotional value, you would want to make sure that the right people have access to these assets and are given clear direction as to how to manage or dispose of them.Digital estate planning can be complex, and you may want to seek the guidance of a legal professional who’s experienced in estate planning and digital law.
But let’s take a look at some crucial steps in creating a digital estate plan.
Gather Your Digital Assets
Sit down and make a list of all your digital assets. Here are some examples:- Financial accounts: Banking, savings, brokerage, and cryptocurrency accounts
- Online accounts: Emails and social media profiles
- Media collections: Digital movies, music, e-books, and online gaming accounts
- Intellectual property: Blogs, e-books, videos, photographs, digital art, and other creative works you have rights to
- Online businesses: E-commerce sites and any websites that generate income
- Computer files: Documents and multimedia stored on your computers, external hard drives, or cloud-storage services
- Subscriptions: Streaming services, cable, phone, fitness centers, and clubs of any kind
- Loyalty programs: Rewards and points programs
Grant Secure Access
You’d likely need various passwords to access your digital assets. So you may want to use a reliable password manager to store all of these passwords. This way, your estate executor would only need the master password. But also be sure to make a list of security questions and answers for different accounts as well as a way for your executor to access your phone or email in case the asset requires double or triple authentication.Designate a Digital Executor
Choose someone you trust to be the executor of your digital estate. Be sure to name the executor in your official estate-planning documents, like your will or trust. This can be an attorney familiar with digital estate planning or the general executor of your estate. But it could ultimately be anyone you choose.The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) allows an executor to access your digital assets as long as you have given explicit consent in an official estate planning document such as a will, trust, or power of attorney. But don’t include passwords and other sensitive information in your will, as a will is a public record.
Be Aware of Legal Restraints
Many digital assets, such as social media profiles, are restricted by terms of service agreements. These can severely limit or deny access to third parties. For example, social media platform X would work with an authorized representative or immediate family member to delete an account after the owner passes away. However, it won’t provide third-party access to the account. Instagram says, “It’s always against our policies for someone to log into another person’s account.” However, Facebook allows you to create a legacy contact who can manage certain aspects of your memorialized account. It’s important to keep up to date with these policies as they may change.State laws may also dictate how digital assets can be managed after the owner’s death. So be sure to work with an attorney familiar with digital law and estate planning in the state in question.
Draft Your Digital Estate Plan
Create a document that clearly outlines how you want each digital asset handled. Perhaps you’d want someone to take over, have it archived, or have the asset permanently deleted. And be clear as to who can access each digital asset and what they can do with that access.Update Your Digital Estate Plan
Your digital estate plan is a living document that changes along with your circumstances. You may acquire new digital assets or lose some. Maybe you change your mind as to what should be done with certain digital assets. Or you need to update some passwords. All this should be reflected in your digital estate plan and shared with your digital estate plan executor.The Bottom Line
In an increasingly digitized world, securing your digital assets will become even more important. That’s why it’s crucial to gather your digital assets and create a digital estate plan that clearly outlines how these assets should be managed and by whom after you pass away.The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.
From The Epoch Times