How to account for and give access to digital assets, an increasingly important part of estate planning
You know how important it is to have a plan for your physical and monetary assets. You’ve probably already included them in your will and designated a power of attorney. As more and more of our information moves online, however, it’s important to have a plan for your digital assets as well. From financial assets like Bitcoin to mementos like family photos, if you don’t create a plan for what should happen to these assets after your death, your family will have a very hard time, and in some cases they will not be able to gain access to them at all. Things like digital family mementos could be lost forever, and money could be left locked behind digital access codes for years. Here are some steps you can take to account for digital assets in your estate planning, which is important not only for financial reasons, but for the sake of posterity, too.
Step One: Define Your Digital Assets
Digital assets cover almost everything we do online, from social media to online banking. Think of everything you use a password to access: those all probably qualify as digital assets. They include online documents, photos, videos, audio recordings, financial records, Bitcoin and almost anything else of value that is stored on a computer, laptop, tablet, hard drive, or cloud storage device. Make a list of all online accounts, especially those for banking, insurance, credit cards, savings, transaction platforms like PayPal and Venmo, social media, email, Dropbox, and anything else that holds assets you would like saved or passed on. Now, make a list of all their accompanying usernames and passwords.
Step Two: Formalize Your Plan In Writing
When it comes to social media sites, you’ll have to decide if you want them shut down or maintained. Some people keep Facebook accounts open, for example, to serve as a memorial so people can comment and share photos and memories of the deceased. Facebook allows users to name a “legacy contact” to take control of their account in the event of their death. This person can post an obituary on your timeline and archive posts and photos. Similarly, Google has an “inactive account manager” option, which allows you to share data and contacts with another person. Other sites have similar features, but all require you to activate them ahead of time.
Now that you’ve made your list of usernames and passwords, find somewhere to store them offline. This is typically done in a safe or safe deposit box, with a trusted relative, or with your estate attorney.
Next, name a digital executor in your will. This should be someone you trust to go through your online accounts and specify what happens to your assets according to your instructions. Choose whether you would like your accounts shut down, or kept open, and include this in your instructions.
Finally, assess the value of digital assets like Bitcoin and provide instructions for how you would like them distributed to family members. Include access to your personal key, and make sure your power of attorney has agency to allow access to your Bitcoin.
Step Three: Provide Easy Access to Your Beneficiaries
This comes back to that list of usernames and passwords. Assign a beneficiary to receive the list and make sure they have easy access to it, as well as answers to security questions and other online safety provisions. If you have online investments or digital assets like Bitcoin, talk with your estate planning attorney to make sure they are incorporated into your asset distribution.
Step Four: Work With an Estate Attorney
Digital assets, especially when they include online investments, can be complicated to disburse. Work with an experienced estate attorney to make sure you’re leaving your family with access to both financial and sentimental assets. Anselmo Lindberg & Associates offers free estate planning for digital assets. Get in touch today.
As we move into an increasingly online world, it’s important to keep your estate plan updated to include digital information. These steps, and an experienced attorney, will help ensure your family is financially sound, and has access to photos and other family records, even after you’re gone.