Whether you prefer storing records “the old-fashioned way” with physical documents kept in cabinets and folders or storing records “on the cloud” or in some way digitally, most people today have at least some digital documents and assets. It is important to plan for who would access your digital assets should you become incapacitated and how digital assets would be distributed after you pass away.
Here are some basics to know when it comes to estate planning for digital assets:
1. What is a Digital Asset?
In a general sense, a digital asset is any type of electronic data that you have the right to access, including things such as e-mail, social media, online subscription, E-commerce, loyalty program, or online bank accounts, as well as cellphone apps and electronic currency wallets (Cryptocurrency).
2. Why do I need to worry about my digital assets?
Digital assets are just as important as physical assets such as your cash or credit card. It can be easy to overlook digital assets, but they still hold value. For example, you may have stopped printing photos and may instead store them on Google Photo or on another website or app. If you lost all of the photos you have stored digitally, how would you feel and how would your loved ones feel if they lose access to them after your passing?
3. What can I do to protect and organize my digital assets?
Start by making a list of all of your digital accounts with the username and password for each one. Next, prioritize this list based on which accounts a loved one would need to access if you become incapacitated or pass away. You’ll want to include accounts that play an important role in your current personal and financial life in your estate plan.
4. What should my Estate Plan say about my digital assets?
Most states have laws which grant a decedent’s executor (under a Last Will and Testament) or agent (under a Power of Attorney) the right to access and manage the decedent’s digital assets. It is important that the right to manage and access your digital assets and digital devices is specifically referenced in your Will, Power of Attorney, and Revocable Trusts (if digital assets are transferred to a Trust). However, it’s important to note that having the authority to gain access and the ability to gain access are not the same. Many digital platforms have very strict guidelines when it comes to granting access to a third party. It’s important to provide your loved ones with the information they need to gain access to your digital assets, but you also need to review the Terms of Service Agreements of your digital providers to see if third-party authorization can even be noted in your account(s). For instance, Facebook lets you choose a “legacy contact,” who would be granted access to your Facebook page and the ability to delete the page or memorialize it after you pass away according to your wishes. You should leave specific instructions in your estate planning documents or in a separate letter for your Executor, Trustee and/or Agent to let them know where they can find your passwords, what should be done with your digital asset accounts and social media accounts, and who will receive your digital assets upon your passing.
Digital assets are a part of nearly all of our lives, so it is important to plan for them the same way you do for other accounts and assets.
For help with your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.