The concept of digital assets—such as your subscription services, shopping accounts and cloud data—is fairly new in the estate planning process. And ironically, the steps you take to keep your digital assets safe can make it difficult or even impossible for family members and executors of your estate to see the extent of your assets, much less inventory and distribute them after death.
But all is not lost when it comes to the digital life you’ve accumulated. Here are three steps you can take now so your digital assets are available to the executor of your estate.
Most financial statements today are delivered by email and stored in smartphones, computers or in the cloud. Bill payments, tax return filings and other financial transactions are handled electronically.
Other assets are sentimental in value, such as social media accounts, digital music and video collections, or digital photos and videos.
Make a list of your important passwords, online accounts and digital collections. Specify what should be done with each item on your list if you become incapacitated or after you pass away.
Once you’ve inventoried all of your digital assets, keep your list up to date and store it in a secure location. You may want to consider using password management software like LastPass, as it can store multiple passwords securely. Let your lawyer, financial professional and family members know how to access it.
Online providers’ Terms of Service Agreement govern your rights and planning options for online accounts.
The privacy section of an online agreement is designed expressly to prevent anyone but the account owner from accessing its contents. Some allow you to make provisions for access in the event of death, but you have to specify this in the agreement.
Review the agreement for your rights upon death or incapacity and determine if you would be able to transfer your account or the data stored in your account. Some providers, including Google and Facebook, now offer options to manage aspects of your account or transfer data stored in your account after death.
Only 32 percent of the U.S. population has a will or other estate planning document that describes how they would like their money and estate handled after death.1
Speak with your estate planning attorney about relevant laws regarding access after your death. Your attorney can update your estate plan to authorize access to your digital property and specify your plans for your digital property.
Also consider the potential obstacles your family members or an executor could face in trying to access your accounts and digital assets. Data encryption offers an extra layer of security to your accounts. However, encryption can complicate the retrieval of your assets.
Lastly, laws related to unauthorized access to data or computers may unintentionally put loved ones at risk when carrying out their duties if you become incapacitated or pass away.
For example, under the Uniform Fiduciary Access to Digital Assets Act, an individual’s authorization is required to access the content of the user’s electronic communications. This includes email contents, private social media postings and cloud-stored documents.
While digital assets might not be the first thing you consider when you’re figuring out how to handle your estate, allowing your family or executor to have access to them should be an integral part of any estate plan.
Get more details, along with a downloadable checklist, in how to prepare your digital estate plan.