In today’s digital age, much of our personal and financial lives are managed online. From social media and cloud storage to cryptocurrency and online banking, our digital footprint is larger than ever. Yet, many overlook the importance of including these valuable digital assets in estate planning.
Properly addressing your digital assets can save your loved ones from unnecessary stress, prevent financial losses, and ensure your digital legacy is handled according to your wishes.
Keep reading to discover more about digital assets in estate planning!
What Are Digital Assets?
Digital assets are accounts or information stored online or on electronic devices. These can include:
- Financial Accounts: Cryptocurrencies (e.g., Bitcoin, Ethereum), online banking, investment platforms like Robinhood or E-Trade, and PayPal balances.
- Social Media: Platforms like Facebook, Instagram, LinkedIn, Twitter, and similar sites.
- Email Accounts: Personal and business email accounts containing important communications and records.
- Cloud Storage: Files saved on services like Google Drive, Dropbox, or iCloud.
- Digital Subscriptions: These are services such as Netflix, Amazon Prime, and Spotify.
- Digital Photos and Videos: Media stored on platforms like Flickr, Google Photos, or personal devices.
The Importance of Integrating Digital Assets In Estate Plan
Read about the importance of including digital assets in your estate plan:
1. Protection of Financial Assets
With many people managing finances online today, your estate plan should encompass digital financial accounts. This ensures your heirs can access these assets easily and protects against potential financial losses.
2. Preservation of Memories
Digital photos, videos, and social media accounts often hold cherished family memories. Designating heirs for these assets ensures that these memories are preserved and passed on according to your wishes.
3. Preventing Identity Theft
Unattended digital accounts can become targets for identity theft. Including these accounts in your estate plan allows for their proper closure or transfer, safeguarding the deceased’s identity.
4. Streamlining the Estate Administration Process
Incorporating digital assets provides fiduciary access to accounts, making estate management more efficient and preventing delays in accessing critical information or assets.
How to Include Digital Assets in Your Estate Plan
To ensure your digital assets are managed according to your wishes, follow these key steps in your estate planning process:
1. Create an Inventory of Digital Assets
Start by compiling a comprehensive list of your digital assets. This should include:
- Account names and URLs
- Usernames and passwords (consider using a password manager for secure storage)
- Details about each asset’s value or significance (both financial and sentimental)
- Instructions for handling each account or asset (e.g., closed, memorialized, or transferred)
2. Appoint a Digital Executor
In many states, you can appoint a digital executor to manage your digital assets after your passing. This individual can be the same person as your general executor, or someone with more expertise in digital matters. It’s crucial to grant this person legal authority to access your digital accounts by clearly outlining their responsibilities in your will.
If you need assistance with financial management in Oregon, consider reaching out to Lifelong Wealth Management. The team can provide expert guidance to ensure your financial and digital estate is well-managed.
3. Provide Legal Authorization
Many online platforms have policies that limit access to accounts after the original owner’s death. In the U.S., the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) allows users to designate who can access their digital assets. Include clear legal authorization in your will or trust, granting your executor access to these accounts.
Some online services, such as Google and Facebook, offer legacy planning tools. For instance, Facebook lets you appoint a “legacy contact” to manage your profile after you pass. Google’s Inactive Account Manager can share your data with a designated person if your account becomes inactive.
4. Consider Using a Trust
You might consider placing digital assets with significant financial value, such as cryptocurrency or digital intellectual property, into a trust. A trust can ensure that these assets are managed and distributed according to your wishes, and can also offer tax advantages.
5. Update Your Digital Estate Plan
As technology evolves and your digital footprint changes, it’s important to regularly check and update your digital estate plan. You can add any forgotten accounts or new assets you’ve acquired to your inventory and refresh any outdated information to avoid confusion.
Concluding Insights: Safeguarding Your Digital Wealth
As digital assets become increasingly important, they should be incorporated into any comprehensive estate plan. By creating an inventory of your digital assets, appointing a digital executor, and providing legal authorization, you can ensure that your assets are managed according to your wishes, minimizing complications for your loved ones.
If you need assistance with this process, consider contacting a financial advisor in Beaverton from Lifelong Wealth Management. The team’s expertise can help you navigate the complexities of managing both your digital and traditional assets effectively.