Your Digital Legacy
Moving our focus from tangible property –
Have you considered this additional estate planning category?
What Is In Your Estate Plan?
When you think about your estate plan, you probably consider your home, vehicles, artwork, jewelry and financial assets. However, in this age of technology, it is important to remember to include your digital assets. Digital assets consist of everything we own online. Because we spend more time on computers and smartphones than we ever did before, you may not realize how much digital stuff you own, from photos and videos to online accounts, cryptocurrency, and nonfungible tokens (NFTs).
Why Is It Important to Plan for Digital Assets?
Planning for digital assets is important for several reasons.
- Without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death due to the simple fact that their existence is unknown.
- 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.
- Like most adults (roughly 70 percent of them), you want certain aspects of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wish to keep secret.
- Planning now can minimize the risk of identity theft, which happens to 4 million deceased Americans each year. Keep reading to learn more about why it is important to include digital assets in your estate plan and how to account for them.
Digital Assets: What Are They?
The list may be quite lengthy, the average number of accounts owned is over 130! Just think of the number of photos and videos being shared — will your Facebook account serve as a memorial after you pass away?
Digital assets you may own:
- 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
Including Digital Assets in Your Estate Plan:
Taking inventory of your digital assets may take some time, but it is worthwhile. You should continuously back up all digital assets, including photos and important documents, to the cloud, and ensure a trusted person can easily access them when the time comes.
Because they are not controlled by governments or banks, cybercurrency and NFTs must be handled carefully. You do not 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 in 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.
- Keep in mind that 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.
Next Steps for Your Digital Assets:
- Talk to us about your digital assets and cyber successors.
- Have a conversation with potential cyber successors about how they would handle your assets, and make sure that they would carry out your wishes before appointing them.
- Digital assets can be placed into a trust;
- Distributed through your will;
- Or you could grant access to them through a power of attorney.
Feel relief that your digital assets are included in your estate plan, can be easily located, managed, and passed to your loved ones according to your wishes.