We hold different assets today than we did a hundred, or even fifty years ago. One of the questions we now have to consider is how to manage digital assets in estate planning. This blog discusses what digital assets you might have, some considerations you may want to take into account regarding those assets, and how to get started in addressing them in your estate documents.
What Digital Assets Might I Have?
When we ask clients if they own any digital assets, most will say that they do not. But, if we rephrase the question and ask them if then own any of the following, most clients recognize that they do in fact own at least some digital assets. Digital assets include:
- Photos, videos, music, blogs, websites, chat room conversations, text messages, and other content you created yourself;
- E-books, audio books, movies, and other assets you own, but did not create;
- Digital storage accounts (often referred to as “clouds”, e.g. OneDrive, Dropbox, or Google Drive) where you store your digital assets;
- Email accounts, social media accounts, gaming accounts, library accounts, and other interactive profiles you access;
- Seller accounts (e.g. eBay, Amazon, etc.), payment accounts (e.g. PayPal), credit card or other loyalty reward programs;
- Bank accounts, including brokerage accounts, cryptocurrencies (e.g. Bitcoin), investment accounts, etc.;
- Digital trademarks, patents, copyrights, logos, artwork, and other professional content you hold;
- Medical and pharmacy records
What makes Digital Assets Different from Other Assets?
If only you can access your digital assets, and you are not able to do so anymore, the data in those digital assets may be lost. This could include everything from photos of your children, to digital patents, to financial assets, to loyalty points. It can also cause havoc for those attempting to care for your estate if they know assets exist but they have difficulty accessing them. Most accounts expect the person trying to access them to have the exact information, and many digital assets are only accessible electronically. Even if your executor has the legal authority to access and control the assets, actually doing so may be much more complicated.
Each digital asset has its own process for dealing with deceased or incapacitated owners. You should take the time to familiarize yourself with the requirements for the assets you own.
How Should I Address Digital Assets in My Estate Planning?
Make a plan! Start by creating a spreadsheet or other document listing all the digital assets in your portfolio. This will be a big help to anyone who acts as your executor, administrator, trustee, attorney, or agent. In this document, include information about what kind of asset it is (financial, multimedia, social media, etc.), where to find it online, how to access it (you can use a password keeper to record sign in information to protect your security), any financial value the account has, and who you would like to take over access to the asset, as well as any ownership, rights or responsibilities you may wish to delegate to that person.
The most important assets to consider will likely be any digital bank accounts or investments accounts you might have. Especially if many of your assets are held in online accounts, your executor or attorney might need to access these assets in order to pay bills or close accounts on your behalf. Dealing with digital assets requires a different skill set than dealing with physical assets, and in some cases, the person who you want to have authority to deal with some of your digital assets may not be the same person that you want to handle your physical assets.
Make sure your estate documents cover your digital assets. Talk to your family and your estate executor so they know your wishes in advance.
Digital assets require some extra consideration in your estate planning process. Start by figuring out what you have, and who you want to be able to control it when you are no longer able to do so. Create a plan for how to make this information available.