Not everything a person leaves behind is physical. Digital assets also matter when drafting a will, but protecting and distributing these valuables will require a different approach to estate planning than one might take for a vacation home or priceless antiques.
What are digital assets?
Any property you own that exists online, either under your control or the control of a company with which you did business, is considered your digital asset.
The following is a list of items that qualify. However, bear in mind as technology evolves and more people use websites, apps and virtual environments to accomplish unprecedented feats, this list will surely grow.
- Social media accounts, including access, status, images, videos and anything else produced therein.
- E-wallets, such as PayPal, Google Wallet, Venmo, etc.
- Online stores, utilities or subscription-based services linked to your bank account, from Amazon.com to your electricity bill to Netflix.
- Digital medical records.
- Electronic media, such as software and e-books.
- Anything saved in cloud-based storage, such as documents, music and photographs.
- Online financial, trading and investment accounts.
- Email accounts.
- Website domains.
- Cryptocurrencies, such as Bitcoin.
- Donations raised through online crowdfunding.
- Virtual items acquired in online games.
- Personal brands cultivated online.
- Frequent flier miles.
These digital assets and others could provide your family and beneficiaries with happy memories or complicate disbursement. That all depends on your preparedness and the detail of the provisions in your will.
Estate planning for digital assets: What you need to know
Here's what you ought to include in your estate planning process if you want to simplify your will, gift your digital assets to those who matter most to you and protect yourself online even after your death.
1. Ask an estate planning professional about laws regarding digital assets
Although the federal government has yet to legislate on matters pertaining to the disbursement of digital assets, many states have enacted their own versions of the Revised Uniform Fiduciary Access to Digital Assets Act. UFADAA grants fiduciaries, such as the executors of estates, the power to manage digital assets as part of their traditional obligations.
Before you start altering and amending your will, discuss your concerns with an estate planning expert. They can help you understand all your options.
"The average U.S. adult has 27 online accounts."
2. Make a list of all your digital assets
Over the next couple weeks, jot down every online account you log into or app you access. Then review the list in your downtime and take stock of all the features you participate in. Everything you create virtually is yours to distribute, destroy or delegate as you wish, so long as you remember to include provisions. But don't stop at Facebook and Instagram. According to a 2016 Intel Security survey, the average U.S. adult has 27 online accounts that require a secure login.
Speaking of which, access to these accounts is crucial to carrying out the stipulations in your will. Everything on this list must include a username, password and any other security barriers that would prevent a fiduciary from fulfilling his or her duties, whatever you may ask them to perform. Even if you wish to delete all your online accounts and everything in them, your executor will need access to do so. Protect his master list by either locking away one pen-and-paper version in your home or encrypting the information with a password manager.
3. Compose a broad digital asset directive
Given the rapid state of digitization around the world, it's entirely possible you will accidentally leave one digital asset unaccounted for, possibly several. Depending on the laws in your state, this may prevent executors from managing property you failed to include in your will. What do you do?
Many estate planning professionals suggest writing a clause that preempts this concern. Draft a few sentences that clearly state your general sentiment regarding the disbursement or management of your online presence once you are deceased. You can even specify what should occur should executors or beneficiaries bring to light digital assets unmentioned in your will. But be careful with your language. You do not want your overall digital asset directive to conflict with your detailed provisions for stated assets.
4. Designate an executor you trust
If your will includes a diverse library of digital assets, it may be wise to select an executor who you believe understands you personally and who will respect your wishes to the letter.
Consider the following scenario: After you pass away, your executor receives your will. You state that you would like that person to go into your favorite social media account, download all your pictures and deliver them to your family. However, you specify the executor is not to read your private messages and must delete the account entirely once the photos are safely in the hands of loved ones. Who do you trust to follow these rules, even with complete and total access to your account?
Are your digital assets protected? Speak to an estate planning professional today to learn more about online property and how you can pass yours onto the next generation.