An estate plan often focuses on tangible property such as real estate, bank accounts, investments, jewelry, artwork, and vehicles. However, in this age of technology, it is important to include your digital assets. Digital assets consist of everything we own online. Because we spend more time on computers and smartphones than we ever did before, you may not realize how much digital stuff you own, from photos and videos to airline miles, other online accounts, cryptocurrency, and nonfungible tokens (NFTs).
Why Is It Important to Plan for Digital Assets?
Planning for digital assets is important for several reasons. First, without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death due to the simple fact that their existence is unknown. Second, planning now means your family will not have to worry about hunting for these items upon your death while also grieving a beloved family member. Third, like most adults (roughly 70 percent of them), you want certain aspects of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wish to keep secret. Finally, planning now can minimize the risk of identity theft, which happens to 2.4 million deceased Americans each year.
Digital Assets: What Are They?
Instead of existing in photo albums and on videotapes and DVDs, most of our family photos and videos are now digital. Even if they lack commercial value, they certainly have sentimental value. Social media accounts containing your photos and videos can also have value to your loved ones when you are gone. For example, a Facebook account can serve as a memorial after you pass away. When you consider all of the other accounts that you log into (more than 130 on average), the list becomes quite lengthy.
Digital assets that you may own include the following:
- Social media accounts (e.g., Facebook, Twitter, LinkedIn, Instagram)
- Financial accounts at brick-and-mortar and online institutions
- Business documents and other files stored in the cloud
- Device backups
- Internet domain names and uniform resource locators (URLs)
- Streaming service accounts (e.g., Netflix, Peacock, Hulu)
- Merchant accounts (e.g., Amazon, Etsy, eBay)
- Gaming tokens
- Virtual avatars
- Points-based loyalty programs (e.g., for groceries, gas stations, airlines, and hotels)
- Rights to intellectual property, artwork, and literature
Including Digital Assets in Your Estate Plan
Taking inventory of your digital assets may take some time, but it is worthwhile. If something were to happen to you, your estate planning attorney or another trusted person should have complete access to your online footprint. This includes usernames and passwords for all accounts. Tools such as Dashlane, LastPass or the password manager integrated in your browser, like Google Chrome, can be used to simplify the storage of usernames and passwords.
In addition, you should continuously back up all digital assets, including photos and important documents, to the cloud, and ensure that your attorney and trusted person can easily access them when the time comes.
Because they are not controlled by governments or banks, cybercurrency and NFTs must be handled carefully. You do not have the option of calling customer service to reset your password if you forget or lose it. Storage of NFT and cryptocurrency passwords should be carefully considered as whether to store on a cryptocurrency exchange, online in a “hot wallet,” or in an offline device known as a “cold wallet” is an important question and unique to each individual’s situation. Certainly the adage – “not your keys – not your coins” is an important consideration. Regardless, someone needs to know how to access your passwords if you cannot.
Other estate planning considerations for digital assets include the following:
- Your estate plan can provide that your digital possessions be handled by one or more cyber successors who can distribute your digital assets like tangible property.
- One cyber successor can control your Instagram account, for example, while another can take possession of your Bitcoin.
- Keep in mind that passwords should not be memorialized in your will, especially regarding cryptocurrency, as they could be made public if the will is submitted to probate court.
- Consider how technologically savvy a person is before appointing that person as your cyber successor.
- Licensing and End-User agreements with each provider have different terms. For those that are most important to you, preplanning is critical. For example, the iphone and Facebook both have legacy information that you can include before your death. Making sure this is done ahead of time streamlines the process for your loved ones.
Next Steps for Your Digital Assets
Talk to your estate planning attorney about your digital assets and cyber successors. Have a conversation with potential cyber successors about how they would handle your assets, and make sure that they would carry out your wishes before appointing them. Digital assets can be placed into a trust or distributed through your will, or you could grant access to them through a power of attorney. With the help of an experienced estate planning attorney, you can feel relieved that your digital assets can be located, managed, and passed to your loved ones.
Contact The Estate Planner LLC in our St. Louis office at 314-303-3218 for assistance with estate planning needs in Missouri.
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