“Considering the deepening extent to which we live our lives online, we can no longer exclude digital assets from estate planning.”
Whether you know it or not, you have a “digital footprint,” defined as the trail of data you create when using the internet, including photos, opinions, videos and financial and tax records. Just as we need an estate plan for traditional assets, a recent article from Think Advisor, “4 Ways to Help Clients With Digital Assets,” urges us to have a plan for digital assets. This makes life far easier for loved ones after we pass, protects the estate and limits identity theft.
The first step is to take inventory of your digital assets. This includes everything from assets owned by your business to your personal life. Online content, graphics, audio and videos are just the start. These four categories may be helpful:
Personal assets: Photos, videos, emails, contact lists, medical records, blogs, e-books, e-gaming assets, information on frequent flier miles, loyalty programs, etc.
Social assets: Facebook, Linked In, Instagram, Pinterest, X (Twitter), What’s App, Telegram and any platform where you communicate and post with others.
Financial assets: Investment and retirement accounts, banks, credit cards, tax documents, Pay Pal, Apple Pay and cryptocurrency.
Business assets: Websites, domain names, customer information, vendor information, intellectual property.
A digital inventory should not be part of your will, as the will becomes a public document once it is filed with the court. However, it should be treated the same as wills, trusts and transfer-on-death documents: kept in a secure location.
Next, name a Digital Executor. This is not yet legally binding in all states. However, you’ll want to name a tech-savvy person who can manage digital assets. This needs to be someone comfortable with the digital world and who understands what you want to happen to your digital assets.
For the most part, email accounts with companies like Yahoo and Google are actually owned by the companies and only licensed to users. Whether you remember or not, when you created the account, you opted into a “Terms of Service Agreement” or TOSA and agreed to use the platform. However, you didn’t purchase the email account itself.
Some platforms allow you to name a legacy contact to take control of your digital accounts. However, you’ll have to name someone, and they’ll need to reach out to the company and provide documentation as requested.
This may sound like a lot of work. However, not addressing digital assets means your digital and traditional assets may be vulnerable to cybercrime, including identity theft, hacking and fraud. Unlike traditional assets with a hard-copy paper trail, your digital executor will not be able to locate and manage digital assets without this information.
Talk with your estate planning attorney about how digital assets are handled in your state and for their recommendations on preparing this part of your estate.
Reference: Think Advisor (Aug. 4, 2024) “4 Ways to Help Clients With Digital Assets”
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