An increasing number of our day-to-day activities are moving online. Whether financial, social, work, or leisure, all aspects of our lives have a growing presence on our computers or the internet. Because of this, smart estate planning should include addressing digital assets.
Historically, estate planning consisted primarily of physical and financial assets such as real estate, jewelry, collections, and other physical items – but today, digital assets also needed to be considered.
Planning for administration of digital assets poses unique challenges because online policies regarding this assets are constantly evolving. However, incorporating digital assets into your estate plan as well as setting up a regular process for updating this information are important to ensure your survivors can easily manage these assets and that your wishes for them are fulfilled.
Some examples of digital assets include: E-mail accounts, iTunes libraries, Kindle book collections, blogs or websites, Facebook and Twitter accounts, digital photographs and videos, online shopping accounts, and memberships or subscriptions with credit card information as well as online bank and investment accounts and medical information.
It can easily become overwhelming for your survivors to access and manage these different types of assets if there isn’t a clear plan in place.
While estate planning for digital assets follows the same basic process as planning for physical assets, it comes with some unique challenges:
- The media in which a digital asset resides may be owned by the deceased or by another entity;
- Digital assets are transitory in nature and subject to constant change;
- Legal considerations such as intellectual property and privacy laws further complicate the area of digital inheritance.
A digital estate consists of the digital-media rights that can be inherited. This includes data stored on personal devices like tablets, computers and smartphones as well as your online presence.
Two principal issues may arise over a person’s digital estate:
- The data or copyrights that belong to the deceased and can be inherited;
- Access to the deceased person’s digital estate by an executor charged with dealing with it.
Fortunately, individual states have introduced standard governance guidelines for estate planning and digital assets. The revised Uniform Fiduciary Access to Digital Assets Act has been adopted in many states and is being considered in many others and provides clear rules pertaining to how an executor can manage digital assets following the death of the owner.
Here are a few tips to keep in mind when planning for your digital assets:
- Take an Inventory of Your Digital Assets – Start by making a list of all of your digital assets including hardware such as computers, tablets or smartphones, important computer files or documents, and all online accounts.
- Identify Someone Who Will Handle Your Digital Assets – The person you have identified to handle financial matters after you pass away may not be the best person to handle your digital assets. Also make sure you have the right team of advisors in place to help your survivors deal with these issues.
- Document Passwords to Allow Access to Your Accounts – While you are often cautioned against writing down this information, it can be helpful to your heirs and advisors to have easy access to this information. You should also regularly update this document since this information will change over time. You can keep this list in a safe deposit box or somewhere secure at home and let your attorney or other trusted person know the location of the list.
- Provide Detailed Instructions – Make sure to provide details regarding your wishes for your digital assets after your death. Do you want your family to post funeral information on your social media sites? Are there sites that you want closed down or left open? Are you earning income from a personal blog or YouTube video channel where your beneficiaries might benefit from an ongoing revenue stream? The more detailed the instructions you are able to leave, the easier it will be for your survivors to know what to do and to ensure your final wishes are fulfilled.
- Give Appropriate Authority – Along with assigning management of your digital assets to one of your heirs and the appropriate advisors, you may also want to see if you can assign someone to act on your behalf for your online accounts in order to make it easier for them to be managed when you are gone.
You may also want to consult with your financial advisor and attorney to ensure your plan for digital assets is incorporated into your regular estate plan and updated on a regular basis.
Contact us at Wilson and Wilson Estate Planning and Elder Law, LLC, 708-482-7090 or firstname.lastname@example.org