Can You Include Digital Assets In Your Estate Plan?
One important part of your estate plan that you may not have known about is your digital legacy. Deciding what happens to your digital assets and information when you pass away has become an increasingly essential component of estate planning.
According to Pew Research, the number of adults in the United States who say they use the internet has grown from 52 percent in 2000 to 93 percent in 2021, with 85 percent using the internet daily.
Including Digital Assets in Your Estate Plan
When planning for your digital legacy, people often first address their tangible assets – homes, cars, money, and personal items, such as jewelry collections or photos. However, it is also crucial to include digital assets and information – which can have significant financial and sentimental value – when planning for the future.
By accounting for digital assets in your estate plan, you can protect your family, pass along things of monetary or sentimental value, make things easier for your loved ones, and preserve your legacy.
One example of this is - suppose you pass away or suffer an accident/illness where you become incapacitated. Your loved ones may need to access your passwords to continue paying bills and handling things you can no longer do. You may also have valuable digital assets that you wish to transfer to your loved ones, just as you intend to pass on physical property. You can ensure your family gets the important things you have on a computer, flash drive, or in the cloud.
What Are Digital Assets?
Your digital assets include anything that is stored electronically that provides or has value. This may include:
- Passwords – Passwords allow you and your loved ones access any number of accounts, such as those housing your financial records or where you pay your bills, like utilities or rent.
- Encryption Keys – Similar to passwords for your digital content, encryption keys prevent outsiders from obtaining electronic information. The password to access an iCloud account and the code you must enter to get into an iPhone is an example of your encryption keys. If you die or lose the ability to communicate without passing on your encryption keys, your surviving loved ones might lack access to your digital assets.
- Email Accounts – Email accounts can preserve important information. For example, a business owner might have significant and relevant company correspondence in an email account.
- Social Media Accounts – Your social networking accounts can have sentimental and even monetary value in some instances. They often contain photos or video clips of you that surviving loved ones might appreciate.\
- Digital Photos and Music – Digital files, such as photos, music, and movies, can have monetary and emotional value. Just as you can pass down photo albums and vinyl records, you can transfer your digital photos and music to your loved ones. Your loved ones might want access to your pictures, as they display memories of the person they lost, while digital music can reflect a person’s unique taste and may even carry financial value.
- Art – This is something to include if you have your own professional creative work, like art, recorded music, and writing, stored electronically.
Organizing Digital Assets
With organization, you can make it easier for your loved ones to handle your digital items if you need their help or you pass away. Begin by taking inventory. There might be things you have forgotten about, such as unused subscriptions or old accounts, as well as electronic items that you value, like digital photos.
A password manager can help you compile and preserve your login information. These services store usernames, passwords, security question answers, Personal Identification Numbers (PINs), and other details you need to access online accounts.
When you use a password manager and choose strong passwords, rather than using the same password for multiple accounts, you can safeguard your digital estate from any bad actors. Examples of password managers include:
Instructions for a Digital Executor
In your Will, you can designate a loved one to handle and distribute your digital assets upon your death. Creating separate written instructions for your online executor can help you explain your wishes privately, as Wills are public documents.
With written instructions, you could:
- List your devices and accounts
- Explain how to access your digital assets (for instance, detailing where to locate passwords)
- Describe what you would like to happen to each electronic possession
You can determine whether you would like your loved ones to delete your digital assets by setting up a digital “death.” Or, tell them to preserve the e-asset and transfer it to a beneficiary.
Social Media Wishes
Your written instructions can also state your wishes for your social media and other online accounts.
Believe it or not, you can adjust your social media account settings in order to set up legacy contacts to manage your accounts upon your death. For example, Facebook permits legacy contacts to manage memorialized accounts. Once Facebook preserves your account, no one can log in and post as you, but your loved ones can see your Facebook memories.
Google also allows users to select a trusted individual to receive their data or to erase their accounts after a period of inactivity.
What Are The Benefits of Planning Your Digital Legacy?
Including your digital assets in your estate plan can benefit you and your loved ones in these ways:
- Preserves valuable and sentimental e-property for your descendants.
- With clear instructions, your loved ones can easily navigate your accounts and obtain your digital property.
- Protects your privacy by arranging the deletion of sensitive digital information upon your death.
- Protects your loved ones from identity thieves, who could attempt to pretend to be you after you pass away, in some cases to take your loved ones’ inheritance.
It is crucial to prepare your digital legacy, given how personal our digital lives has become.
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