Digital Assets and Your Estate Plan: What You Need to Know

From online banking and cryptocurrency to social media profiles and cloud-stored photos, digital assets are an undeniable part of our lives. But have you considered what happens to your virtual wealth when you’re no longer here? Just like your physical property, your digital assets need a roadmap in your estate plan.

Digital assets include a wide range of electronic information and resources that hold value, whether financial, sentimental, or practical. Your digital footprint includes:

• Financial Accounts: Access to online banking accounts, investment platforms, PayPal, Venmo, and credit card accounts. While the funds themselves might be seen as physical assets, your ability to access and control them online is a digital asset. Cryptocurrencies (such as Bitcoin) and NFTs are also considered digital assets.
• Personal and Sentimental Assets: Digital photos, videos, music libraries, cloud-stored documents (Google Drive, Dropbox), email accounts, and digital journals.
• Social Media and Online Presence: Facebook, Instagram, Twitter, LinkedIn, personal websites, and blogs.
• Subscription Services: Netflix, Spotify, Amazon Prime, and online memberships.
• Intellectual Property: Digital rights to literary works, music, or videos.
• Domain Names and Online Businesses: For entrepreneurs, your website domain and e-commerce platforms.

Ignoring your digital assets can lead to significant headaches, emotional distress, and financial loss for your loved ones due to:

• Access Issues: Your family may be locked out, making it difficult to settle affairs, access important documents, or share memories.
• Lost Funds: Some digital assets, like cryptocurrency, could be inaccessible if your heirs lack login details.
• Privacy Concerns: Your social media accounts could potentially remain active for a long time, which could increase the risk of identity theft or misrepresentation.
• Legal Complications: Service providers have “Terms of Service” agreements that restrict access after death, making it difficult for your executor to gain control.

Integrating digital assets into your estate plan requires proactive attention:

1. Create an Inventory: List your digital accounts and assets, including URLs and usernames. Use a password manager or a digital vault service, with instructions for your executor to access it.
2. Appoint a Digital Executor/Fiduciary: Designate a trusted individual to manage your digital estate and carry out your online wishes.
3. Provide Clear Instructions: For each asset, specify your wishes. For example, would you like your social media accounts deleted, memorialized, or managed by a “legacy contact”?
4. Understand Legal Frameworks: Many states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which provides a framework for fiduciaries to access digital assets. However, a provider’s terms of service can still limit or complicate access to digital assets, particularly when explicit user consent has not been given.
5. Include Digital Provisions in Your Estate Documents: It is important to incorporate specific language in your will, trust, or power of attorney that grants your digital executor the legal authority to manage your online accounts.
6. Update Your Plan: As you create new accounts or acquire assets, update your inventory and instructions. Review your digital estate plan periodically to ensure it reflects your wishes.

While securing access to your digital assets is foundational, it’s important to consider:

• Proactive tax planning for appreciated digital assets like cryptocurrency or NFTs.
• Optimizing charitable giving for these forms of wealth.
• Incorporating online businesses and intellectual property into a succession plan.
• Implementing cybersecurity measures to help safeguard your assets.
• Understanding beneficiary designations on online financial accounts.

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