Many people aren’t thinking about their digital assets, such as social media pages, online account access for banking and investing, or cloud storage when it comes to estate planning.
Do you want a loved one to change your Facebook profile to a memorial page? Do you want your heirs to receive your frequent flyer miles, Bitcoins and have access to your photograph and videos? These are all things to consider during the estate planning process.
While these may not be on the top of your estate planning checklist, it is essential to consider your digital assets when you’re naming heirs. Here are some tips on how to protect your digital assets and include them in your estate plan.
Tip #1 Take an Inventory of Your Digital Assets and Devices
The first step you should take in safeguarding your digital assets is taking stock of what you have.
Digital assets include any online accounts you have, documents, files, records, photos, videos, and social media accounts that are accessed on a computer, tablet, smartphone, or other electronic devices.
Many times after someone passes away, family members want to download photos and videos from their smart devices.
If you don’t include a list of devices and passwords, your grieving loved ones may not be able to access those memories.
Firstly, make a list of all of your electronic devices, including desktop computers, laptops, tablets, smartphones, e-readers (such as an Amazon Kindle), and so on.
Manufacturers of these devices are very unlikely to provide access to your executor or loved ones for security purposes.
Some common digital assets include:
- Financial services, such as bank accounts, digital wallets, PayPal, investment/retirement accounts, and cryptocurrency accounts such as Coinbase.
- Health-related accounts such as insurance and online patient portals through your healthcare provider
- Home-related services such as your mortgage, utilities, internet/cable services, and homeowners insurance
- Social media accounts such as Facebook, Twitter, Instagram, LinkedIn, Pinterest, and TikTok
- Personal websites, blogs, or other hosted accounts
- Photos, videos, and data storage such as Flickr, iCloud, Shutterstock, YouTube, Vimeo, Soundcloud, iTunes, etc.
- E-commerce accounts like Amazon, eBay, Shopify, Zazzle, and Etsy
- Subscriptions such as Netflix, HBO Max, Hulu, Spotify, iTunes, and Pandora. Any monthly subscription “box” services such as Blue Apron, Bark Box, and Dollar Shave Club should be included as well.
- Loyalty and rewards programs, including airline miles, hotels, and credit card rewards points
- Your personal computer hard drive or laptop memory
- Smartphone related accounts such as Apple ID or Google Account
Your list of digital assets may be much more extensive than you expected – Include everything. It’s better to include every single asset than leave no information or list for your loved ones. If you don’t have instructions for your wishes in regards to your digital assets, especially those with sentimental value, your loved ones could end up losing access permanently.
Tip #2 Making Decisions About Your Digital Assets
Your digital estate plan should contain your wishes for what happens to your digital assets.
Before you can adequately instruct your executor, you’ll need to make decisions about what you want to be done with your digital assets after you die.
When it comes to tangible property like tablets and smartphones, you’ll need to decide who should own your device(s) when you pass away. Things are a bit more complex when abstract property has monetary value, such as your PayPal account balance, digital wallet balances, cryptocurrency, airline miles, e-commerce accounts, and copyrighted work. These types of assets entail a transfer of ownership to your heirs, and you may need to consult an attorney to ensure that your will and estate plan designates transfer of ownership according to your wishes.
Regarding social media accounts, such as Facebook, they have procedures in place to automate what happens to your account after you die. Facebook allows you to designate a legacy contact in advance who can manage your memorial profile. Your legacy contact must be someone who is your Facebook friend. You can also choose to have your account deleted after you die. These settings are located in the “Memorialization” settings on Facebook. Check with other social media platform providers regarding their policies on user profiles after someone dies.
Tip #3 Securing and Storing Your Account Passwords
In addition to the list of your digital assets, you’ll want to have a list of your passwords, including which accounts have a two-factor verification (also known as two-step verification, sending an access code via text or email). This information will be helpful to anyone who may need to access your accounts.
- Make a list of all of your accounts and devices
- Write the password(s) next to the account or device listed so that it is easy for your executor to understand and follow
- Consider using a spreadsheet or secure digital password managers such as Keeper, 1Password, or LastPass so that all of your passwords are in the same place and safeguarded from anyone other than yourself and your executor
Tip #4 Creating and Providing Instructions for Handling Your Digital Assets
Forty-seven states recognize the Revised Uniform Fiduciary Access to Digital Assets Act, which addresses access to digital assets after someone dies. The legislation recognizes that executors can manage digital property the same way as physical property and includes provisions on how your fiduciary, estate executor, guardian, agent, attorney, or trustee can access your digital assets.
Although your state likely has adopted the Revised Uniform Fiduciary Access to Digital Assets Act, it is still a good idea to draft unequivocal, specific instructions for handling your digital assets once you die. To do this, you’ll need to make a provision in your will or Power of Attorney that designates a fiduciary, executor, or agent as the person who can access and manage your digital assets.
Instructions for handling your digital assets should not be included in your will, as it is a public document, but it should be listed in a separate document. Instructions should include a list of your devices, online accounts, instructions on how to access the accounts, and a list of passwords. You should also provide instructions about what your executor should do with each device and account according to your wishes. For example, suppose you want your Facebook account to be memorialized or deleted, or you want to give your airline miles to your best friend. In that case, you’ll want to be as specific as possible in your letter of instruction so your executor can distribute your items according to your wishes.
This content is developed from sources believed to be providing accurate information, and provided by Spectrum Management Group. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.