How to do Estate Planning for Digital Assets?
With the evolution of technology, we all are living in a digital world with most of the works being done online. We have our business and personal data stored online. We are so much dependent on the online platforms that we ourselves don’t realize the value of the digital records and the loss that we would face if these assets are ever lost or become inaccessible. Thus, the digital assets have become an important kind of property that needs to be taken care of as well and must be included in our estate planning. If not done, your loved ones might face a lot of discomforts, unnecessary burden, and cost with the possibility of the estate lost.
Estate Planning For Digital Assets-
Digital assets can be defined as the assets that are stored and executed digitally. These include:
- Electronic communications like emails, social media platforms, etc.
- Online reward programs like for credit cards, hotels, and airlines.
- Online accounts like PayPal, online banking accounts, etc.
- Digital collections like photographs, videos, etc.
- Business accounts having customer data.
- Crypto currencies.
- A Smartphone along with the apps
- Digital apps for medical records, personal records, etc.
Thus having a plan for the aforementioned digital property will allow your inherits to recover and protect the assets according to them, after your demise. A digital estate plan eradicated the requirement of tracking down passwords and thus provides your heirs with legal right to access them. Being a new concept, digital assets planning laws are followed in 50% of the states in America while the rest are still following the data privacy laws which deny access to any person except the account’s owner to access it.
According to these laws, accessing someone’s accounts or data without his/her assent is a crime. Due to such a scenario, it is advised to create a written advisory to manage your digital assets by giving access to your loved ones and in this way protecting them and helping in theft prevention.
Before planning your digital assets, it must be ensured that your state follows the law to protect them. It is important as the state law will define which asset should be included or excluded from your digital estate plan, the way in which it will be outlined and the method to record or draft it.
If your estate follows the Uniform Fiduciary Access to Digital Assets Act then it will not be that much tough for you. According to this law, the estate executors are allowed to handle some digital pecuniary assets without exceptional assent, unless opposed by the will. He/she has the legal authority to handle digital files, web domains, etc. However, the executor will not be allowed to retrieve your emails, social media accounts, and text messages, without specified assent through a will, trust, power of attorney, etc.
Thus, you must instruct it clearly in either of the aforementioned documents regarding who would have permission to access and handle your digital assets. The executor so appointed by you will be responsible to manage the digital assets by ensuring bills being paid and turning off the automatic online payments and canceling the subscription, eventually. He/she will then transfer these assets to the heirs according to your choice as mentioned in the legal document. You can assign different people for different assets according to the type of assets like financial mails to the executor while drives and files stored to any family member or close friend.
Below mentioned are some tips to help you to plan your digital assets:
Prepare a list of digital assets:
You must list down your digital assets along with its details such as storage location, log-in details, economic value (if any). If you own several accounts, then an online password manager must be used to trace the login details of all such accounts.
Decide the fate of your digital assets:
For the listed digital assets, you need to determine what should be done with them after your demise. It may include small decisions like closing a social media account to bigger decisions like if you have an online business whether it will be closed or continued. It is advised to be clear and specific while outlining how your digital assets will be handled.
Designate who will manage the assets: Appoint a digital executor to specify who will manage which of your digital assets.
Put your decision in writing:
After deciding your plan, it must be put on a legal document. You must ensure that you must be specific regarding your wishes.
As digital assets are still a relatively new phenomenon, the laws that deal with them are changing rapidly. Hence, it is advised to discuss with an estate planning lawyer before planning your digital assets.