How many online accounts do you think you have? It’s probably more than you’d think. Sources vary on how many digital accounts the average American has, but most estimates are over a hundred.
That’s why digital assets are becoming a significant concern during estate planning. These accounts and the information they contain can have considerable value and should be included in your estate plan. Below, we discuss how you can make your digital estate plan, but first, let’s break down what a digital asset actually is.
What Are Digital Assets?
A digital or electronic asset is anything that you can or must store electronically. This covers a wide variety of items, such as:
- Websites and domain names
- Digital media collections
- Subscriptions to online services
- Other online accounts
These items can carry significant financial value. Some may also be necessary to manage other assets, like business email addresses and websites. Finally, some of these items, such as cloud photo storage accounts, can carry emotional significance to other people in your life.
Why Digital Property Matters for Estate Plans
So, what makes digital assets unique? There are two major factors that set them apart from other asset classes. First, they do not exist in the physical world. As a result, they are much easier to forget about and lose track of.
Second, many electronic properties are unconnected from the owner’s legal name, which can make it significantly harder for their representative to reclaim them after the owner’s passing. These factors can lead to significant lost value for owners and estates.
That’s why it’s crucial to have a plan for how your electronic assets should be handled along with the rest of your estate. Some of the most important benefits of a digital estate plan include:
- Simplifying the administration process: How much of your online presence and financial life is linked to an email address or social media account? If you’re like most people, the answer is “most of it.” Having a clear plan for how your representative will access these accounts will make it significantly easier for them to handle the rest of your estate.
- Preventing lost information: Data is less likely to fall through the cracks when your representative has access to your accounts. It will be easier for them to track down your accounts, cancel subscriptions, and build a comprehensive picture of your possessions. This becomes more important as your online presence grows.
- Fully realizing the value of the estate: Your plan should always include key details about online assets with actual monetary value, such as cryptocurrencies or NFTS. Without this information, those assets could be lost forever, and your beneficiaries will not receive the property’s full value.
- Ensuring accounts and other items are appropriately managed: You may want assets like websites or social media accounts to be closed or transferred to someone specific. Your estate plan ensures that your wishes are followed for these assets, just like they are for your physical possessions.
In short, your digital estate plan lets you retain control over your electronic assets and simplifies things for your representative.
How to Make a Digital Estate Plan
If you have any electronic assets, including them in your estate plan is worthwhile. Here’s how to start the process of digital estate planning to account for your online and electronic assets:
Take Inventory of Assets and Accounts
The first step to successful estate planning is understanding what assets you need to address. This is particularly important for accounts and online assets since your inventory may be the only sign that these items exist. Make sure to include all the accounts you can think of, from social media to online banking and investments to subscription services to cloud storage.
It’s likely that you miss at least a few accounts in this process. You can use online tools that identify all the accounts associated with a specific email address. Don’t be afraid to use these services to make sure you have a comprehensive inventory.
You should also collect passwords and keys to these assets as part of your inventory. This information is crucial for granting your executor or administrator access to the accounts. Make sure you store this information somewhere that is secure but easy to update, such as an encrypted password manager, so it remains accurate even if you need to change your credentials.
Determine Your Options
Once you know what digital assets you have, you can decide what you want to do with them. You may want to close accounts, cancel subscriptions, turn social media pages into memorials, transfer account ownership, and more. A skilled estate planning attorney can help you determine the best course of action.
Write Your Plan
With your attorney’s help, you can consolidate your choices into a specific section of your will. California has adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which dictates what representatives can do with these items. Under this law, the terms you set in your will take precedence over a platform’s terms-of-service agreement. However, you must expressly state what you want to happen, or the representative may not have the legal right to access the account.
Talk to the Experts About Your Digital Estate Plan
It’s more important than ever to have a plan for how your online property is managed after you pass. Creating a robust digital estate plan ensures that your wishes are followed, and your accounts are closed, transferred, or updated appropriately. At the Law Offices of Denise Eaton May, P.C., we are prepared to help you establish an estate plan that fits your needs. Schedule your consultation today to learn how we can help you keep control over your digital future.