Establishing an estate plan for your digital assets
People should make plans for the handling of their digital assets when creating an estate plan.
As another year comes to a close, it is a good time to reflect on the state of your affairs. Specifically, do you have your estate planning documents in order?
With every year that passes, our lives become increasingly digitized. In addition to social media sites, personal websites and blogs and photo storing services, many people use online financial services and other online tools for day-to-day needs.
Consequently, it is a good idea for people to account for their digital assets when creating an estate plan. In addition, those who already have an estate plan may want to update those documents to account for their digital assets.
Identifying your digital assets
Digital assets encompass a wide array of information stored online. To begin with, a large percentage of Americans have email accounts that are run by third-party providers.
In addition, many people use social media sites – such as Facebook, Twitter, Instagram and Pinterest – for a variety of purposes. In some cases, individuals have found ways to monetize their activity on these sites. According to Investment News, one retiree began making approximately $10,000 each month from companies directing traffic to their sites from his Pinterest page. Such accounts are considered digital assets even when they do not turn a profit, however, as they can have sentimental value.
Digital assets can also include:
- Accounts on sites where you sell products, such as Etsy
- Accounts on sites where you purchase products or receive services, such as Amazon or Netflix
- Domain names for websites
- Online financial accounts
When an individual passes away, the information stored in all of these online locations can be lost if proper care is not taken in advance. When creating a plan for your digital assets, you should first make a list of all of your digital assets. For each asset, user identification and password information should be stored in a safe place. For instance, individuals can use encryption programs to store their login information online or they can create a written list of the information.
Appointing a digital executor
After identifying all of your digital assets, you will likely wish to appoint a digital executor. An executor can ensure that your assets are handled appropriately and in accordance with your wishes. While you may have already appointed an executor for your will, you may want to appoint a different individual to be your digital executor, if he or she is not particularly tech savvy.
You can provide specific instructions for your digital executor when handling your assets. For instance, people can choose to deactivate their Facebook profile or create a memoriam page upon their passing.
Seek the counsel of an estate planning lawyer
When making modifications to a will or trust or creating one for the first time, it is a wise idea to discuss your estate planning needs with a skilled attorney. Consulting with a knowledgeable estate planning lawyer will ensure your wishes – relating to both your digital and nondigital assets – will be followed.
Keywords: digital assets, estate plan