How to Protect Your Digital Assets in Your Estate Plan
How to Protect Your Digital Assets in Your Estate Plan
In today’s increasingly digital world, estate planning is no longer just about passing on physical and financial assets. Many of us now have a wide array of digital assets, ranging from online accounts and social media profiles to cryptocurrencies and intellectual property. These digital assets hold value—both sentimental and financial—and should be included in your estate plan to ensure they are managed or transferred according to your wishes after you pass away.
This blog article will guide you through the steps of protecting your digital assets in your estate plan, helping to ensure that your online presence and digital property are handled responsibly and passed on to your loved ones or beneficiaries.
What Are Digital Assets?
Digital assets encompass a broad range of online and electronic materials that may have personal, financial, or sentimental value. Some examples of digital assets include:
Email Accounts: Gmail, Outlook, Yahoo, and other email services.
Social Media Profiles: Facebook, Instagram, LinkedIn, Twitter, etc.
Online Banking and Financial Accounts: PayPal, Venmo, investment accounts, and online banking.
Cryptocurrency and NFTs: Bitcoin, Ethereum, other digital currencies, and non-fungible tokens.
Digital Photos, Videos, and Documents: Files stored on your computer, smartphone, or cloud services like Google Drive, Dropbox, or iCloud.
E-commerce Accounts: Amazon, eBay, Etsy, or Shopify stores.
Domain Names and Websites: Personal or business websites, blogs, and any associated intellectual property.
Subscription Services: Netflix, Spotify, Apple Music, and other paid services.
Digital Wallets and Password Managers: Services like Apple Pay, Google Wallet, and apps like LastPass or 1Password.
These assets may hold significant financial value (such as cryptocurrency investments or intellectual property rights) or personal value (such as family photos and videos). Including them in your estate plan helps ensure they are protected, managed, or distributed to the right people.
Why You Need to Plan for Digital Assets
Unlike physical or financial assets, digital assets are often overlooked in estate planning. Without specific instructions, your loved ones may face significant challenges accessing and managing these assets. Some potential problems include:
Inaccessibility: Without your passwords, heirs may struggle to gain access to your digital accounts.
Legal Barriers: Privacy laws and the terms of service for various platforms can prevent access to accounts or digital content.
Loss of Value: Cryptocurrencies and other online financial assets could be lost entirely if no one knows about them or how to access them.
Unsettled Accounts: Social media profiles and email accounts left unmanaged could result in privacy issues, identity theft, or emotional distress for your family.
By addressing your digital assets in your estate plan, you can help avoid these problems and ensure that your online accounts and digital property are handled according to your wishes.
Steps to Protect Your Digital Assets in Your Estate Plan
Here are the essential steps to take when incorporating digital assets into your estate plan:
1. Take Inventory of Your Digital Assets
The first step in protecting your digital assets is to create a comprehensive list of all your online accounts and digital holdings. Be sure to include:
The name and type of each asset (e.g., email account, cryptocurrency wallet, social media profile).
URLs or links to access the accounts.
Usernames or email addresses associated with the accounts.
This inventory will give your executor and heirs a clear picture of what digital assets need to be managed, transferred, or closed.
2. Document Your Access Information
Most digital assets require usernames, passwords, and possibly two-factor authentication codes to access. After listing your digital assets, create a secure record of this access information, which should include:
Usernames or email addresses used for login.
Passwords or passphrases.
Security questions and answers (if applicable).
Backup codes or recovery methods for two-factor authentication.
One of the safest ways to store this information is in a password manager, which can securely store your login credentials and even provide access to an appointed individual after your death. Avoid keeping passwords in unsecured documents that could be easily hacked or lost.
3. Appoint a Digital Executor
In addition to naming an executor to handle your traditional assets, consider appointing a digital executor to manage your digital assets. A digital executor is responsible for:
Accessing your online accounts.
Managing or closing social media profiles.
Handling online banking or financial accounts.
Distributing digital content (such as photos, videos, or intellectual property) to your beneficiaries.
Ensuring that all necessary accounts are settled or deleted.
Be sure to choose someone who is tech-savvy and capable of navigating the complexities of digital assets. You may also want to work with an attorney to ensure that your digital executor has the legal authority to act on your behalf in these matters.
4. Include Digital Assets in Your Will
While your will should cover your physical and financial assets, it should also address your digital assets. You can include specific instructions for how your digital assets should be handled, such as:
Who should have access to your digital accounts.
Which accounts should be closed or deleted.
Who should inherit financial digital assets like cryptocurrency or online business accounts.
How sentimental digital assets (photos, videos, writings) should be distributed or archived.
However, avoid listing sensitive information, such as passwords, directly in your will, as it becomes a public record after your death. Instead, refer to your password manager or a secure document containing login information.
5. Review and Update Your Digital Estate Plan Regularly
As your digital presence and assets change over time, it’s important to keep your estate plan up to date. Regularly review your digital inventory and access information, and make sure your estate planning documents reflect any new accounts or assets. Updating your plan ensures that no valuable or important digital assets are overlooked.
6. Check Platform-Specific Options
Many online platforms offer their own tools for managing digital assets after death. For example:
Google’s Inactive Account Manager: Allows you to choose what happens to your Google account after a set period of inactivity, such as sharing data with trusted contacts or having your account deleted.
Facebook’s Legacy Contact: Enables you to choose someone to manage your Facebook profile after your death, either memorializing it or deleting it.
Apple’s Digital Legacy Program: Allows users to add a legacy contact who can access their iCloud data and Apple accounts after they pass away.
Check the settings and terms of service for each platform you use to ensure you take advantage of any available post-death options.
Final Thoughts
In the modern digital world, protecting your digital assets is an essential part of estate planning. By taking inventory of your digital holdings, documenting access information, and including these assets in your estate plan, you can ensure that your online presence is managed or transferred according to your wishes. Appointing a digital executor and staying up to date with platform-specific options will provide your loved ones with clear guidance on how to handle your digital legacy.
Planning ahead for your digital assets will not only preserve their value but also help protect your privacy, prevent identity theft, and offer peace of mind to your family during a challenging time.
