As we spend more time online, a larger share of our belongings and memories exists only in electronic form. That's why your will and estate plan should let your heirs know what to do with your digital assets as well as your physical property.
Here's what you should consider as part of estate planning for digital assets.
Common Types of Digital Assets
Digital assets are belongings that exist in electronic form on a computer, a mobile device, the internet or a storage drive. Some digital assets that could be in your estate plan include:
- Digital files: Your family photos and videos could be stored on devices that only you know about. You may also own the digital rights to movies, songs and subscriptions that could go to your heirs.
- Email and social media accounts: Giving your heirs the login and password for your email and social media accounts would make it easier for them to access the accounts and shut them down.
- Website domains: If you have your own websites, you could give your heirs access to the domain either to keep the sites active or shut them down.
- Online financial accounts and rewards: These assets may include money in digital accounts like PayPal and Venmo or online rewards from credit cards, hotel chains, airlines or retail programs.
- Cryptocurrencies: If you own any cryptocurrencies, such as Bitcoin or Ethereum, your heirs would need access to the digital wallets and exchanges to inherit these assets.
- Electronic information: Your devices may also contain confidential information, such as your SSN and tax returns, which you wouldn't want floating around after you're gone.
Your heirs are more likely to overlook digital assets after death than physical property. If you don't tell them about a physical photo album or a piece of jewelry, chances are good that they will stumble onto these belongings by searching your home, but with digital assets, there's less of a trail.
Your heirs might never know what you own online if you don't tell them. Also, if you protect your devices and accounts with passwords, your heirs might not have any way to access everything. Data encryption and security can make it difficult to access certain accounts without passwords, and it might even be illegal for your heirs to try logging in without your written permission.
Without estate planning for digital assets, you would risk losing valuable property and memories, and your social media and other digital accounts might remain online, even if you wanted them shut down.
Steps to Handle Digital Estate Planning
To ensure that you're being proactive about passing down digital assets, you can start by taking these basic steps:
- Make a list of your digital assets: Think about what valuables you might have stored digitally, including money and memories. List each digital asset as well as the location and any login information needed to access it. Store this list in a safe place that your heirs know about.
- Decide how you want everything managed: Leave instructions for your heirs that lay out what you want done with everything. Do you want certain photos/memories to go to certain family members? Do you want your social media accounts and websites closed or left open? Who should inherit valuable property, such as cryptocurrencies or money in digital wallets?
- Consider storing files on a cloud server: If there are items you definitely want to protect, such as cherished family photos or important financial documents, it may be safer to move those files to a cloud storage site, such as Google Drive or Dropbox, so your heirs can still find them if your computer or phone gets damaged.
- Review legal permissions with an attorney: Meet with your attorney to discuss digital assets for your will, trusts and other estate planning documents. An attorney should be able to come up with a blanket authorization that gives your estate fiduciary the right to access these accounts after you pass away.
As with any sort of estate planning, the key to managing digital assets is to start planning early and leave clear instructions. Your loved ones will appreciate that you built a plan for today's digital world.