Digital natives are becoming the norm rather than the exception. Millennials, born between 1981 and 1995, are now between 27 and 42 years old. They’re having kids, planning for retirement, and thinking about the legacies they want to leave. In other words, they’ve started to plan their estates.
The basic structure of an estate plan hasn’t changed much over the decades. Every generation has needed to plan how to support their kids and distribute their assets. However, there is a new issue that Millennials, Gen X adults, and even Baby Boomers need to consider: their digital assets.
With the rise of the internet, digital assets have become commonplace. They include everything from email accounts to cryptocurrency to Netflix subscriptions. Including these assets in your estate plan is just as important as including your bank accounts and personal possessions. But how do these plans work?
What Is a Digital Estate Plan?
An estate plan is a collection of documents that directs your loved ones on what to do when you can no longer make your own decisions. Traditionally, this includes your will, power of attorney, Advance Health Directive, trust paperwork, and asset inventory.
A digital estate plan works as part of your overall plan. While no two plans are the same, digital estate plans often consist of:
- A specific inventory listing accounts and electronic assets
- An encrypted password manager program containing the login details for these accounts
- A clause in your will that names your digital executor and explains how each account or asset type should be handled
These items ensure your estate representative knows what accounts are out there, provides the tools to access them, and grants the legal authority to transfer or close accounts as necessary.
Who Should Have a Digital Estate Plan?
While Millennials have led the movement to include electronic assets in their estates, they are far from the only ones who should do so. Today, almost every adult can benefit from addressing electronic property in their will.
Do you have a website or run a business with an online presence? Do you own electronic property? Do you have email accounts that contain useful information? Do you use cloud storage to save family photos? If so, you should have a digital estate plan.
Why? Because most sites include clauses in their terms of service that limit access only to the person who created the account. In other words, if you pass away, no one else can legally access your account, even to close it or transfer funds.
While new laws like California’s Revised Uniform Fiduciary Access to Digital Assets Act (RUFADA Act) provide exceptions to this in the case of death, they are limited. Under the RUFADA Act, if a site doesn’t include a specific tool for passing on ownership after the account holder’s death and the decedent doesn’t explain their wishes in their will, the site’s terms of service must be followed. That can leave your assets untouchable by your estate representative and pose significant during probate.
How to Handle Your Digital Assets
Estate planning with digital assets requires care and attention to detail, but there’s no reason to be intimidated. A skilled estate planning attorney can help you prepare your digital assets for the future. Together, you’ll take the following steps:
- Find your accounts and assets. Start with your most important accounts, like emails, social media, online investment and bank accounts, and cryptocurrency wallets, then add other online accounts as you remember them.
- Decide how you want each asset to be handled. Do you want your social media pages to remain up, or should they be archived or deleted? Do you want to transfer ownership of websites or close them entirely?
- Include a clause in your will stating your wishes. Don’t be afraid to be specific here – it’s better to include more information to ensure there’s no doubt about your wishes.
- Identify accounts with built-in tools for transferring or deletion after death. Major sites like Facebook and Google now have tools to help estate representatives handle accounts after you pass. You can usually update your preferences to match your will on the settings page in just a few minutes.
- Keep your account information somewhere safe but secure. The best solution is to sign up for a password manager, which stores all your account information in an encrypted format. Set a unique password for the manager and include this information in your will. This ensures your representative can find your passwords without risking an account breach or forcing you to update your will every time a password changes.
Your digital assets are just as important as any other intangible property. At The Dayton Law Firm P.C., our skilled estate planning attorneys can help you include these assets in your plan for the future. Schedule your consultation today to learn how we can help you include digital assets in a will.