Accounting for Digital Assets in Your Estate Plan
Provided by HG.org
Today, many individuals own a substantial amount of their assets online or through other intangible means. Failing to account for these digital assets can result in assets not going to their intended beneficiaries and being unable to access accounts after the testatorís death.
Types of Digital Assets
There are a variety of digital assets. Beginning with hardware, you may own computers, external hard drives, laptops, smart phones, digital cameras, flash drives and other electronic devices and storage devices. Many accounts may be managed online, including checking accounts, utility accounts and reward accounts. Mileage and other rewards may be attached to credit cards or specific companies. Movies, music, books and other media may be stored online and may amount to significant value. Social media accounts and photo and video sharing accounts may include assets of sentimental value. Digital assets also include information that is stored electronically, including manuscripts, money management files and similar types of documents. Digital assets may also include intellectual property, including trademarks, logos, copyrighted materials and designs.
Inventory Digital Assets
The first step to account for digital assets in an estate plan is to make a list of all of the digital assets. This inventory should contain a list of all such items. Additionally, it should indicate how the executor will be able to access these accounts, such as by including the website, username, password and purpose of each account. The inventory should also identify the location of the digital assets.
Use a Password Manager
One way to streamline the process is to use a password manager in which the site stores all of the passwords and the individual only needs to know the password for the manager program. Using this tool allows the testator to simply share the main password with the executor.
Use an Online Vault
An online vault can store important information that is secure. This vault may include tax returns, insurance documents, digital estate planning documents and other important documents that are secured on a site online
Your digital assets should be part of your larger estate plan. Provide clear instructions about how you want your digital assets to be treated, including who shall have access to online accounts if you become incapacitated or die. If you want some assets to be archived and saved, note this. If you want files to be deleted or accounts to be deactivated, note this. Include instructions as to who shall receive other digital assets. If certain accounts are associated with a monetary value, consider who you would want to benefit from them.
Some user agreements may dictate what happens after your death or incapacitation. However, if can be helpful for your executor to know your intent and how you want these accounts treated. The more specific you are with your digital assets, the more likely that it is that your wishes will be honored. You may also want to consider how you want to limit your executorís access to private accounts, such as asking for certain accounts to be immediately closed or taking other steps to provide limited and specific authority only.
Write a Statement of Intent
In addition to outlining how you want your digital assets treated, consider adding a statement of intent that says that you want your executor to have the same access to accounts that you have. Additionally, this statement may indicate to your heirs that you wanted your digital assets to be treated the way you have specified in order to avoid any confusion or arguments over these accounts.
Choose Your Executor
In your estate planning documents, indicate who you want to be responsible for handling your digital assets. You may want to name a different person to handle these accounts than the person who handles the other aspects of your estate. For example, you may want someone who has more financial savvy to be your general executor while naming someone who is more tech savvy to be your digital executor. You may also want to add language in your will and other estate planning documents instructing the two executors to work together. The person you name as your digital executor should be someone you trust with the private details that they may encounter by serving this role.
The rules regarding digital assets. An estate planning lawyer in your jurisdiction can inform you whether a digital executor is a legal position in your area. He or she can provide information about what you can do to safeguard your digital assets.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.