Do you hold any digital assets? Before you answer no – assuming you’re not heavily invested in Bitcoin – you might want to reconsider, because you may have more digital assets than you realize. Just about everything you do online can qualify as part of your digital assets.
When you’re putting together your estate plan, you need to think beyond the tangible items you own and take into account the digital footprint that your passing will leave behind. A digital estate plan lets your loved ones know what should happen to that digital trail after you’re gone.
We recently came across this helpful article on the topic from Kiplinger, written by Miami attorney Justin Stivers. We liked the practical way in which Stivers alerts us to the reality that we live in “an increasingly digitized world” where “our lives are inseparable from technology.” Even if we don’t have “digital assets” that appear to us to have monetary value, almost all of us do have digital assets that have value to us and our loved ones for other reasons.
As you read Stivers’ article, give some thought to your own situation. We think some digital estate planning may very well be in order.
Digital Assets are a Major Part of Our Legacy
Stivers begins, “From cherished memories stored in digital photo albums to valuable assets held in online accounts, our digital footprint has become a significant component of our overall legacy.”
But, he adds, despite this increasing use of the digital world to hold our most precious memories and resources, many people overlook the importance of digital estate planning, the “management and distribution of their digital assets” after death.
The sad consequence of this oversight for the loved ones left behind can be confusion, disputes, and even loss of valuable assets, not to mention the risk of fraud and identity theft. “This is where digital estate planning becomes crucial,” Stivers writes, “a proactive approach to ensuring that your digital legacy is managed according to your wishes.”
Digital Assets: Probably More Than We Tend to Think
First, it’s vital to figure out what digital assets you have, and where they are. Stivers notes that these can be a wide array of items, including but not limited to:
*Email accounts
*Social media profiles
*Digital photos and videos
*Online banking and investment accounts
*Cryptocurrency holdings
*Intellectual property stored digitally
*Subscriptions and memberships
*Personal documents and files stored in the cloud
Start with a Comprehensive Inventory of Digital Assets
In order to form the groundwork for managing the digital assets you may possess, Stivers recommends that the first step be to compile a comprehensive inventory, “documenting each digital account, including login credentials, account numbers and any relevant access information.”
Once you have your list, the next step is to appoint what Stivers calls a “digital executor.” He explains, “Similar to a traditional executor who oversees the distribution of physical assets, a digital executor is responsible for managing your digital estate after your passing.”
This individual, according to Stivers, should be someone you trust who is both technologically savvy and capable of carrying out your wishes. “This individual will play a pivotal role in executing your digital estate plan, ensuring that your digital assets are handled in accordance with your wishes and in compliance with relevant laws and regulations,” he writes.
Craft an Estate Plan for Your Digital Assets
List in hand and executor in place, Stivers says that you can now put together your digital estate plan, which outlines how you want your digital assets to be managed and distributed after your passing.
Stivers provides the following considerations you might want to include:
*Instructions for accessing and managing digital accounts
*Preferences for the preservation or deletion of social media profiles
*Guidance on the transfer or disposal of valuable digital assets
*Provisions for protecting sensitive information and maintaining privacy
*Directions for digital memorials or tributes
Remember that this document is not a one-and-done deal. Stivers explains, “It’s essential to review and update your digital estate plan regularly to reflect any changes in your digital assets or preferences. New accounts may be created, passwords may change, and digital assets may accumulate over time. By keeping your digital estate plan current, you ensure that your wishes are accurately represented and can be effectively executed when the time comes.”
Laws Governing Digital Assets Vary by Jurisdiction
One hiccup that you might encounter is that the laws governing digital assets can vary by jurisdiction. This can make digital estate planning a bit more complex, so the advice of qualified legal counsel is highly encouraged.
Stivers writes, “Consulting with legal experts who specialize in estate planning can help ensure that your digital estate plan complies with applicable laws and regulations. Your attorney can provide invaluable guidance on drafting and implementing your digital estate plan, as well as addressing any legal considerations that may arise.”
Along with the legal considerations, Stivers encourages the use of password management tools, encryption technologies, and other cybersecurity measures to help you safeguard your digital estate against attack or unauthorized access.
Once You Have a Digital Estate Plan, Tell Those You Trust
Communication is key, as the saying goes, and Stivers agrees. As you’re working on your plan, he urges you to keep your loved ones informed throughout the process.
“Ensure that your loved ones are aware of your digital assets, your chosen digital executor and the specifics of your digital estate plan,” he writes. “Providing clear instructions and access to relevant documents will empower your executor and loved ones to carry out your wishes with confidence and clarity.”
Stivers concludes with the reminder that digital estate planning isn’t just about preserving assets; “it’s about preserving your legacy and ensuring that your wishes are honored and respected after you’re gone.”
Stivers sums up his points this way: “By taking proactive steps to create a comprehensive digital estate plan, you can provide peace of mind for yourself and your loved ones, knowing that your digital legacy will be managed according to your wishes.”
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(originally reported at www.kiplinger.com)