People usually think of an estate plan as something that focuses on tangible property: jewelry, artwork, money, vehicles, etc.
But did you know you should include your digital assets, too? Digital assets are everything you own online - photos, videos, online accounts, cryptocurrency, nonfungible tokens (NFTs), etc.
Why it’s important to plan for digital assets
Planning for digital assets is important for several reasons.
First, without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death because their existence is unknown. Second, planning now means your family will not have to worry about hunting for these items upon your death while also grieving a beloved family member. Third, like most adults (roughly 70%), you want certain aspects of your digital life to remain private. If you don’t create a plan, your loved ones may learn things you wish to keep secret. Finally, planning now can minimize the risk of identity theft, which happens to 2.4 million deceased Americans yearly.
What are digital assets?
Instead of existing in photo albums and on videotapes and DVDs, most of our family photos and videos are now digital. Even if they lack commercial value, they certainly have sentimental value you want to preserve for your family and friends. Social media accounts containing your photos and videos can also have value to your loved ones when you are gone. For example, a Facebook account can serve as a memorial after you pass away. Did you know most people have an average of 130 accounts?
Digital assets that you may own include the following:
Social media accounts (e.g., Facebook, Twitter, LinkedIn)
Financial accounts at brick-and-mortar and online institutions
Business documents and other files stored in the cloud
Cryptocurrency
NFTs
Databases
Device backups
Internet domain names and uniform resource locators (URLs)
Streaming service accounts (e.g., Netflix, Peacock, Hulu)
Merchant accounts (e.g., Amazon, Etsy, eBay)
Gaming tokens
Virtual avatars
Points-based loyalty programs (e.g., for groceries, gas stations, airlines, and hotels)
Rights to intellectual property, artwork, and literature
Online betting accounts
Monetized video content
How to include digital assets in your estate plan
Taking inventory of your digital assets may take some time, but it’s worth it. If something were to happen to you, your estate planning attorney or another trusted person should have complete access to your online footprint. This includes usernames and passwords for all accounts. Tools such as Dashlane or the password manager integrated into your browser can be used to simplify the storage of usernames and passwords.
In addition, you should continuously back up all digital assets, including photos and important documents, to the cloud and ensure that your attorney and a trusted person can easily access them when the time comes.
Because governments or banks do not control them, cyber currency and NFTs must be handled carefully. You don’t have the option of calling customer service to reset your password if you forget or lose it. NFT and cryptocurrency passwords should be stored online in a “hot wallet” or an offline device known as a “cold wallet.” Either way, someone needs to know how to access your passwords when you cannot.
Other estate planning considerations for digital assets include the following:
Your estate plan can provide that your digital possessions be handled by one or more cyber successors who can distribute your digital assets like tangible property.
One cyber successor can control your Instagram account, for example, while another can take possession of your Bitcoin.
Passwords should not be memorialized in your will, especially regarding cryptocurrency, as they could be made public if the will is submitted to probate court.
Consider how technologically savvy a person is before appointing that person as your cyber successor.
What are my next steps?
Talk to an estate planning attorney about your digital assets and cyber successors. Have a conversation with potential cyber successors about how they would handle your assets, and make sure they would carry out your wishes before appointing them. Digital assets can be placed into a trust or distributed through your will, or you could grant access to them through a power of attorney. With the help of an experienced estate planning attorney, you can feel relieved that your digital assets will be easily located, managed, and passed on to your loved ones. Call Santaella Legal Group, serving all of California, at (925) 831-4840.
Keep reading:
Here’s How Cryptocurrency Can Affect Your Estate Plan
What Happens to Our Social Media Accounts After We Die?