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A typical estate plan concentrates on tangible assets such as jewelry, artwork, money, and vehicles. However, in this day and age, it is critical to remember to include your digital assets. Everything we own online is considered a digital asset. Because we spend more time than ever before on computers and cellphones, you may be surprised at how much digital assets you own. Photos, movies, online accounts, bitcoin, Nonfungible tokens (NFTs), and so on are all examples of digital assets.
Why Is It Important to Plan for Digital Assets?
Planning for digital assets is critical for several reasons. First, without a plan, your digital assets may become lost in cyberspace and fail to pass to your loved ones after your death because no one knows they exist! Second, planning ahead of time relieves your family of the burden of searching for these items after your death while also grieving the loss of a loved one. Third, you, like most adults, probably want certain aspects of your digital life to remain private. If you don’t make a plan, your loved ones may learn things you wanted to keep private. Finally, planning ahead of time can reduce the risk of identity theft, which affects 2.4 million deceased Americans each year. Continue reading to learn why it is critical to include digital assets in your estate plan and how to account for them.
Digital Assets: What Are They?
Most of our family photos and videos are now digital rather than in photo albums, videotapes, or DVDs. Even if they have no monetary value, they have sentimental value that you want to keep for your family and friends. Social media accounts containing your photos and videos may be valuable to your loved ones after you are gone. A Facebook account, for example, can be used as a memorial after your death. When you consider all of the other accounts you log into (on average, more than 130), the list becomes quite lengthy.
Digital assets that you may own include:
- 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
- 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
Including Digital Assets in Your Estate Plan
It may take some time to inventory your digital assets, but it is well worth the effort. If you pass away, your estate planning attorney or another trusted individual should have complete access to your online footprint. This includes all account usernames and passwords. To simplify the storage of usernames and passwords, you can use tools like Dashlane or the password manager built into your computer.
Furthermore, you should back up all of your digital assets, including photos and important documents, to the cloud on a regular basis and ensure that your trusted person has easy access to them when the time comes.
Cybercurrency and NFTs must be handled with caution because they are not regulated by governments or banks. If you forget or lose your password, you cannot contact customer service to have it reset. NFT and cryptocurrency passwords should be stored either online in a “hot wallet” or offline in a “cold wallet.” In either case, someone must know how to access your passwords when you are unable to.
Considerations for digital assets in estate planning include:
Your estate plan may specify that your digital possessions be handled by one or more cyber successors, who will be able to distribute your digital assets as if they were tangible property.
One cyber successor may take control of your Instagram account, while another may take possession of your Bitcoin.
Keep in mind that passwords, especially for cryptocurrency, should not be included in your will because they may be made public when the will is submitted to probate court.
Before naming someone as your cyber successor, consider how technologically savvy they are.
Next Steps for Your Digital Assets
Discuss your digital assets and cyber successors with your estate planning attorney. Before appointing potential cyber successors, discuss how they would handle your assets with them and ensure that they would carry out your wishes. You can place digital assets in a trust or distribute them through your will, or you can grant access to them through a power of attorney. You can rest assured that your digital assets will be easily located, managed, and passed on to your loved ones with the assistance of an experienced estate planning attorney.
Call us today 305-962-5929 to schedule a consultation to find out more about how to plan for your digital legacy.