Estate planning provides for the transfer of your assets through a will or a trust. These traditional estate planning documents do not specifically mention digital assets, despite the fact that almost everyone now has at least some digital assets. This traditional estate plan formula has worked for decades to transfer the assets of a decedent down to his or her heirs and beneficiaries. However, in the wake of the digital age, these instructions and documents may not be enough to transfer all of your digital assets.
It has become the norm to store financial records in smartphones, computers, or the cloud, and to conduct financial transactions electronically. It is likely that you will need to take additional steps during your lifetime to ensure that the digital assets of your estate make it to the beneficiaries that you choose. Passwords, data encryption, criminal laws, and data privacy laws can present challenges for anyone other than the original owner to gain access to their digital assets. Family photos and videos could be lost forever, social media accounts could stay online long after you’ve passed, and your heirs may not receive all the money that you’d like to see come their way.
What is digital estate planning?
Basically, digital estate planning entails the process of cataloging, organizing and planning for the disposition of one’s digital assets after death. Accounting for digital property in your estate plan has become essential. Fortunately, it’s relatively simple to do. To begin preparing for the transfer of your digital assets, keep a thorough list of your digital assets and update it frequently; review the terms of service of your providers for procedures to backup and transfer those assets; and discuss your options for the transfer of these.
Why is this important?
Without proper planning, the asset or portions of the asset may not be transferred to those beneficiaries as you intended. Second, failing to properly plan for the transfer of digital assets can create losses to your estate financially and to your heirs emotionally. For example, if you receive only digital statements for your bank or brokerage accounts, your estate representative may not be aware of the existence of these financial accounts, even though they can be easily transferred by visiting the brick-and-mortar location. Providing a list of the digital assets, including these financial accounts, will alert your estate representatives to their existence and location.
What can you do now?
There are several steps that you can take now to prepare for your digital assets to be properly transferred at your death. Start by creating a list of your digital assets, their respective passwords, and location in which each is stored. If your digital assets are social media accounts such as Google email or Facebook, make sure to review the terms of service for the instructions of restrictions regarding the transfer of the asset. Next, determine who should receive each of your digital assets that are transferable.
Once the above is completed, you should save the assets stored on your computer into something tangible such as an external hard drive in a secure place. Unlike other assets, it is possible to make multiple copies of digital assets and leave the digital assets to more than one beneficiary. Make sure to let your family members or friends know how to access your list. Finally, work with an estate planning attorney to update your wills, powers of attorney, and any revocable trusts. They should include language giving lawful consent for providers to access the digital assets to the appropriate people.
If your estate plan doesn’t account for digital assets properly, your heirs may not have access to them. Talk with your attorney about the steps you can take now, and check in regularly, to update your estate plan to accommodate any changes in the law or in your digital property. Consult with one of our experienced attorneys today by scheduling an appointment at (614) 452-9724. We look forward to working with you!
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