What Is a Digital Asset for Estate Planning?
The typical American manages approximately 30 to 50 online accounts across various platforms—banks, utility companies, email providers, social media sites, shopping platforms, and technology services. Most people fail to recognize how extensively their lives operate in digital spaces, from streaming services to home monitoring applications. All these online accounts constitute digital assets requiring inclusion in comprehensive estate plans.
Creating a Digital Asset Inventory
Begin by compiling a thorough catalog of all online accounts, documenting username, password, account number, and descriptions for each. Since cybersecurity experts recommend frequent password changes, this inventory requires regular updates whenever credentials change.
Four Categories of Digital Assets
Personal accounts encompass emails, photographs, videos, music, and smartphone or tablet applications, typically backed up on computer hard drives or cloud storage.
Financial assets include savings and checking accounts, retirement accounts, investment portfolios, utility accounts, shopping platforms, and frequent flyer programs. Cryptocurrency holdings and online banking relationships should also be documented.
Business-related accounts cover intellectual property, websites, blogs, written content, photography, musical compositions, and software. Side business activities on platforms like eBay or Etsy require inclusion.
Social media accounts involve Facebook, LinkedIn, Twitter, Snapchat, WhatsApp, and similar platforms, plus gaming sites and gambling accounts.
Storage and Protection Strategies
Secure the inventory in an encrypted format if stored digitally, or as a physical document in a protected location. Desktop computers and tablets present security risks; external drives offer alternatives, though loss remains possible. Encryption programs provide additional protection.
Legal Considerations
Many states have enacted digital asset legislation. Designate a digital executor and discuss your wishes with them. Certain platforms require advance designation of a “legacy contact” before executors gain legal access. Terms of Service Agreements may prohibit account access despite possessing passwords.
Include a letter of instruction specifying how your digital executor should handle accounts, distributions to heirs, and your preferences for various digital assets. This documentation supports your directives if disputes arise.
Conclusion
Digital estate planning represents an evolving legal domain. Proper planning enables executors to protect digital assets similar to how traditional estate plans safeguard tangible property.
If you or a loved one needs assistance with elder law, probate or estate planning issues, do not hesitate to book a call with us today. We are here to help.
