In last month’s blog we discussed trusts: legal tools used to protect and manage assets for the benefit of another person. Often these tools protect physical belongings, but there’s more than physical objects to consider in your estate plan.
In the digital world we live in, it’s vital not to overlook our digital assets as you make provisions for your assets in your estate plan. The average individual’s digital presence covers a wide range of arenas and activities, including online banking, social media, crypto investments, cloud storage, medical profiles, wealth management, and more. This digital presence is expanding at an unprecedented rate and safeguarding your digital legacy has become a vital aspect of thorough estate planning.
The Rise of Digital Assets
Your digital life is most likely filled with valuable assets that hold both monetary and sentimental value. Ignoring digital assets in your estate plan can lead to significant complications for your loved ones. Consider the following:
- Social Media and Online Profiles. Your online presence is a part of your identity. Failing to specify your wishes for your social media and online profiles can result in accounts remaining active indefinitely (and subject to hacking) or being deleted without consideration of their value to your family and friends.
- Cryptocurrencies & Digital Financial Accounts. Online banking and investment accounts are essential in today’s world. Without proper guidance, your beneficiaries may face challenges accessing and managing these assets, potentially leading to legal disputes and financial losses. Furthermore, with the rise of Bitcoin and other cryptocurrencies, many individuals now possess substantial digital wealth. Without proper planning, these assets could be lost or inaccessible forever.
- Digital Media. It is commonplace to store home videos, photographs, and important files on the cloud. These hold immense sentimental value to your family and friends. If they have no way of accessing your digital storage, these items will be lost to your loved ones.
Practical Steps to Protect Your Digital Assets
To avoid these consequences, there are many steps you should take to ensure your loved ones have access to and instruction for your digital assets.
- Take Inventory of Your Digital Assets. You should create and maintain a current detailed inventory of all your digital assets including a list of accounts, login credentials, and instructions on how you want each asset to be handled. The inventory can be referenced in your will or trust.
- Appoint a Digital Executor. In your will designate a trusted individual as your digital executor (or otherwise specify that the general executor has this role). This person will be responsible for carrying out your digital asset wishes as outlined in your estate plan. Decide how you want to handle your social media profiles, email accounts, and professional profiles after you’re gone. Many digital platforms will allow you to name an agent or successor within the platform itself. For example, Facebook will allow you to designate a Legacy Contact to manage your cover picture, profile picture, and friends on your memorialized page. Make sure to communicate your intentions with the digital executor in addition to appointing them in your will or trust.
- Use Password Managers. Consider using a password manager to securely store login credentials for your digital accounts. Password managers are convenient tools that not only help you keep track of your passwords but also enhance the security of your digital assets. They generate strong, unique passwords for each of your accounts, making it much harder for hackers to gain unauthorized access and allow you to store your passwords in one secure place.
- Regularly Review and Update. Digital assets are constantly changing. Regularly review and update your digital asset plan to reflect any new accounts, changes in assets, or alterations to your wishes.
In this age, our digital lives and holdings are a prominent part of our overall estate, and it’s vital to protect these digital assets just as you would your physical belongings. By including digital assets in your estate planning and taking practical steps to safeguard them, you can ensure that your legacy, memories, and financial assets are preserved for future generations. The attorneys at Skufca Law provide the knowledge and assistance you need to integrate your digital assets into your estate plan. Contact us today to protect your digital assets.
Coming up next: Stay tuned for our next blog in our Estate Planning Series where we discuss the ongoing effort required to maintain an up-to-date estate plan.