“Regardless of the preferred record-keeping mode, most people have some sort of digital footprint, making it important to know who would have access to your digital assets if you became incapacitated and how those assets would be distributed in the event you pass away.”
What is a digital asset? This is the question asked in a recent article “Estate Planning for Digital Assets” from Westchester & Fairfield County Business Journals. Any type of electronic data you have the right to access is considered a digital asset, although they come in a variety of forms.
A digital asset now includes email accounts, social media, online banking, online subscriptions, e-commerce, photo stream, cell phone apps, gaming accounts and everything having to do with cryptocurrency. Don’t leave out airline miles or other loyalty program points.
When so much of our lives is online, we need to address estate planning for this new class of assets.
They are as important, and some might argue, even more important than traditional assets. They may have financial or sentimental value. If neglected, they are an easy entryway for hackers prying into financial accounts.
Consider your family photos. Most of us have these stored on the cloud, hoping they never disappear. However, when they do, they can be gone forever. The same could easily happen for accounts of gamers who are spending traditional money on games and building up online assets with monetary value.
Can you protect and organize digital assets?
Yes, absolutely. Start with a list of all digital accounts including URLs, usernames and passwords. You should also note whether access requires third-party authentication—a verification code from a phone number or an email address to log in.
Create some kind of list, whether on a spreadsheet (encrypted for security), using an online password manager or a digital asset app. Paper also works, as long as it’s kept in a secure location.
How do digital assets get incorporated into my estate plan?
In most states, your executor can be given the right to access online accounts through your will, or you can include digital asset access in a Power of Attorney. However, it’s not that simple. Certain digital platforms only allow the original user access, even with passwords and authentication codes. Each has a Terms of Service Agreement to protect your privacy and the platform.
Some platforms offer the ability to name a legacy contact who can gain access to your account and either delete it or memorialize it after you die. However, not all do. You’ll need to go through all of your digital accounts to determine which ones permit a legacy contact and the limitations given to the legacy contact.
To support any litigation arising from a platform refusing to allow access, leave specific instructions in for your executor or agent instructing them as to what you want done with your digital assets. This directive may give your executor or agent the support they need to go up against big data. Your estate planning attorney will know the laws in your state and help create a plan.
Reference: Westchester & Fairfield County Business Journals (July 18, 2022) “Estate Planning for Digital Assets”