Do you want your digital assets to be protected after you pass away?
People spend decades cultivating their online presence. They create social media profiles and build wealth with cryptocurrency. And there’s no denying just how valuable digital assets have become…
…but here’s the problem.
The majority of Americans have never planned for their online accounts after death.
Just 24% of Americans have a will, according to recent survey data. And less than one quarter of Americans leave detailed instructions for digital assets.
Here’s what you need to know:
Without estate planning, your digital life could be deleted forever. Your kids may never inherit your hard-earned crypto. Facebook profiles could stick around mocking your loved ones.
Now more than ever, estate planning services are important. You need a modern estate plan that covers both physical and digital property. Any good estate plan protects your entire legacy.
Fortunately, it’s never been easier to safeguard your digital assets. Working with experienced estate planning attorneys can help you protect everything you own online. They know how to deal with ever-changing platform policies. And they’ll draft legally-binding documents that leave no digital asset behind.
Read on to learn:
- What Are Digital Assets?
- Why You Should Plan for Digital Assets
- How to Safeguard Your Online Accounts: 5 Steps
- Mistakes to Avoid When Planning for Digital Assets
What Are Digital Assets?
Digital assets are any accounts you have online. They can also be electronic files you wish to pass on to someone else after death.
Here are some examples of digital assets:
- Social media profiles
- Email accounts
- Cryptocurrencies
- NFTs
- Domain names
- Digital bank accounts
- Photos/videos saved online
- Stock/trade accounts
Need more?
- Digital music library
- Internet properties (blogs, websites, etc.)
- Streaming media accounts
- Self-hosted websites
- Any digital account with login information
See? When you think about it, we all have tons of digital assets.
In fact, the average American believes their digital estate is worth over $190,000. But shockingly few take steps to plan for their online assets.
But here’s the catch.
You can’t simply give someone your login info and call it a day. Digital accounts are difficult to transfer, even with the proper planning. They’re locked behind passwords and two-factor authentication.
Why You Should Plan for Digital Assets
Simply put, you should plan for digital assets to protect your family from financial loss and heartbreak.
Imagine this…
You could lose thousands of dollars in cryptocurrency if you don’t have estate planning for crypto. In fact, The New York Times reported that over 3 million Bitcoins were “locked” forever due to forgotten passwords or the death of the account holder.
That’s billions of dollars lost forever.
But it’s not just about crypto. Sure, that could be financially devastating. But think about all of the sentimental items you have online.
Your kids will be devastated if they can’t access all of your digital photos. Grandchildren will never meet your Facebook friends. Years of social media posts will be deleted.
Don’t let this happen to your family.
For the most part, states have adopted something called RUFADAA. This law allows executors to manage digital accounts, similar to physical assets.
But don’t be fooled…
…into thinking your executor can automatically access your online accounts. Each company has different policies when it comes to granting someone access to an account.
Some don’t allow access at all. Others may require a court order.
Planning is crucial to ensuring your digital assets are protected and transferred according to your wishes.
How to Safeguard Your Online Accounts: 5 Steps
Estate planning for digital assets may seem intimidating at first. But if you take things one step at a time, it’s actually pretty simple.
Step 1: Create a List of All Your Digital Assets
The first step to planning for digital assets is to create an inventory. Put together a list of all online accounts you own.
Include usernames, account URLs, passwords, security questions, 2FA information, etc.
You should also note where any hardware crypto wallets are located. If you store files on an external drive, include that as well.
Periodically update this document to account for new assets or deleted accounts.
Step 2: Decide What Happens to Each Asset
Next, you want to go through your inventory and decide what happens to each account.
Should your online bank accounts transfer to your children? Perhaps you want your blog deleted.
Once you know what to do with your accounts, write clear instructions.
If you want social media profiles deleted, state that. If certain accounts should transfer to family members, say so.
Step 3: Store All Account Information Securely
This step is where most people go wrong.
Your executor needs to know how to access your accounts. But you also don’t want just anybody logging into your accounts while you’re alive.
Consider a secured password manager. There are several out there that allow you to grant someone emergency access to your accounts.
Alternatively, you can keep a physical copy of the document in a safe. Make sure to encrypt the file and include instructions to your executor on how to access the information.
Try not to keep this document with your will. Wills are made public during probate.
Step 4: Update Your Will and Other Legal Documents
In order for your executor to access your digital assets, you must specifically reference them in your estate planning documents.
Your will, trust, and power of attorney should grant your executor access to digital accounts.
Without specific language, your executor may encounter legal barriers when trying to manage your digital assets.
Step 5: Inform Someone You Trust
The final step is to tell someone about your digital estate plan. Inform them that this plan exists and where they can find it.
You should let your executor know about your digital inventory. Tell him or her your wishes regarding certain assets.
Make sure someone you trust knows what’s going on.
Mistakes to Avoid When Planning for Digital Assets
It’s easy to make mistakes when planning for your digital assets. So let’s go over some of the things you should avoid…
- Not planning for digital assets. Sounds silly to include this but believe it or not, people still don’t consider digital assets when estate planning.
- Not updating your information. Digital accounts come and go. Make sure you remove accounts that you no longer own from your digital asset inventory.
- Insecurely storing passwords. Putting a list of passwords in your will is bad idea. Sending passwords via text or email can also pose security risks.
- Forgetting about cryptocurrency. If you own crypto, you need to plan for it separately. Crypto is tricky and requires special handling.
- Not choosing the right executor. If you don’t think your executor is tech savvy enough to manage digital assets, choose someone who is.
Wrap Up
You’ve worked hard for everything you own. Don’t let decades of online engagement go to waste.
Here’s a quick recap:
- Make an inventory list.
- Plan what happens to each account.
- Store information in a secure place.
- Reference digital assets in legal documents.
- Tell someone you trust about your plan.
Life is moving online at breakneck speeds. Don’t get left behind when it comes to estate planning.