We cannot overlook how much digitalized the world is right now. Almost everyone has digital assets, such as web domains, social media accounts, cryptocurrency wallets, amongst others. You may ask, how is a social media account an asset?
Several people have monetized the social media, receiving thousands of dollars yearly from their YouTube channels. Now, if the owner dies, should everything go into extinction just like that? Should their bitcoin wallet be lost forever?
You surely don’t want that. You may have a child who deserves a better life, and they could have it if you let such assets pass down to them at your death. Just as we do estate planning for our houses and bank accounts, it’s also necessary to carry out estate planning for our digital assets so that those you trust can gain access and prevent them from getting lost forever.
Examples of digital assets
- Cryptocurrencies
- Digital accounts where you hold other forms of virtual currency which can be converted to hard cash
- Websites
- Rights to digitalized works, such as a motion picture, game, etc.
- Monetized social media accounts
- Blogs and their content
- Online videos, pictures, or music.
- And lots more.
So how do we incorporate these digital assets into our estate plan? What are the estate planning strategies available in the digital world today?
Estate Planning Strategy in the Digital World
1. Start by taking inventory of all your digital assets
Before you can begin planning for your digital assets, you need to know what digital assets you own. You can be overlooking so many of them. You may have an account somewhere that you have even forgotten about, which may turn out to be highly valuable later. We can see that from how bitcoin price has skyrocketed over the years. So you want to identify each asset, know exactly what type of asset it is, how and where it’s stored in the cloud, and your login details.
2. Know what assets you truly own
You mat think you own an asset but what you really own is a non-transferable right to use the asset. So you can’t transfer such an asset to a loved one via your estate plan. It’s essential you check the Terms of Use for each asset you are inventorying.
3. Store all your assets and their logins in the secure place
Now, you need to store your data properly to enable your family or fiduciary gain access to them when the need arises.
4. Add more security by backing up your data on a physical storage device
Storing your data in the cloud is not always enough. Cloud providers can make data access more complicated for your family. To make things easier for them, back up all your online data to your computer or storage. One good storage option is FidSafe®.
This also gives you another layer of protection.
5. Consider how you want these assets to be managed when you are gone
This is the big part. You obviously may not want every member of your family, including your executor to have the login to your bitcoin wallet. This may lead to fraud and theft. (Can you really trust anybody?) It is vital you decide who exactly you want to give access to each of your digital property. You can name a separate digital executor who you give management over your digital assets until they are passed down.
6. Document it in your will
Just as you address your house and business in your will, you also need to address your digital assets as well. You don’t need to create a separate will for your digital assets. No, that would be invalidating your former will. If you have already written a will, simply make a codicil to the will; here, you address your digital assets as explicitly as possible. An estate planning attorney can help you.
Why you need estate planning for your digital assets
There are criminal and data privacy laws that prevent anyone from accessing an account unauthorized. So no matter how much good faith your spouse or child has, they cannot access your digital assets except you give them the allowance via your estate plan.
Talk to an estate planning attorney
Planning for your digital assets doesn’t have to be difficult. To ensure you get everything right without costly errors, talk to an attorney near you.
