As digital assets become more common to all of us, it is important to include them in estate plans. Unfortunately, as was explored in a Denver Business Journal article featuring WealthCounsel, that is not always easy to do.
People have valuable assets stored on digital devices. That value comes from digital currency; purchased movies, books, music, and games; social media, blogs, or websites that they manage; personal memories on online storage accounts; emails and other communications; personal records; and financial and career information. Many of these assets may be impossible to recreate, re-download, or repurchase.
Unfortunately, those assets are increasingly at risk of being lost when the account owner passes on. Many digital accounts are subject to complicated terms of service agreements, which can often make it difficult or impossible for surviving loved ones to access them. Additionally, state and federal laws could put friends and relatives who try to log in to a deceased person’s accounts at risk of violating anti-hacking and privacy statutes.
Initiatives are underway to put more consumer-friendly laws in place regarding digital assets. Until then, though, it is important to incorporate detailed directions and information surrounding your digital assets into your estate plan. Here are four steps to take now:
Be aware. Speak regularly with your attorney, financial advisor, and certified public accountant about how to protect your digital assets.
Take a digital inventory. Make a list of all your online accounts and subscriptions at least once a year.
Gather your passwords. Make a list of your current passwords and keep it in a safe place. (Several businesses offer secure, digital custodial services for lists like these.) Make sure your trustee knows where to find the list.
Be specific. Include specific provisions in your durable power of attorney that authorize someone you trust to deal with your digital assets and online accounts. Your will or revocable trust should have similar provisions to allow your loved ones to deal with those assets after your death.
Finally, consult with an experienced estate planning attorney to make sure you have covered all your bases when it comes to digital asset planning.