Downs Law Firm, P.C.

planning for digital assets

Do You Need to Plan for Digital Assets?

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Estate planning isn't just about hard assets anymore. Who will read your email when you die?

At first blush, you may not think you need to plan for your digital assets. Maybe this really doesn’t apply to you, right? Think again.

I didn’t believe that I even had any when the concept first entered my attention. Then I began to tally my online presence, from my Amazon Prime dependency to my photo and documents stored on the internet. It added up quickly to significant assets.

Suddenly, there are gas shortages because of a hack on the east coast gas pipeline. “Sorry, no Gas” is a bad thing to see and one we have not really had to face since the 1970s. We as a nation are serial hostages to thieves and criminals, to the foreign governments backing them.

Yahoo Finance’s recent article entitled “Who inherits your selfies when you die?” laments that the internet ruins everything, and a simple death is no exception.

At death, accessing and closing out these assets is a challenge. If asked to close out a family member’s estate, it now includes social media accounts, cloud storage, and frequent flyer miles.

Digital assets are files created electronically. They exist as data held on a digital storage drive or computer hard drive.

However, items made by hand can become a digital asset, such as a painting or handwritten notes become digital assets if they’re scanned and uploaded to a computer.

It can also be images, photos, videos, files containing text, spreadsheets, or slide decks. Also, as more and more people move financial management to the cloud, statements, and data that are needed may be hard to find.

The first time anyone has to deal with the laws and rules about incapacity and death is when a loved one becomes ill or has passed away. It’s an emotionally tough time, and they’re likely to be grieving when trying to make important decisions on a project they know nothing about.

Know that we no longer solely have a paper trail to our lives. Think about the number of digital accounts you log into to manage your household and personal finances. There are good ways to make your passwords and digital identity accessible.

It’s significant, and an executor’s role is now dependent on knowing and finding both our physical and digital lives.

Your executor won’t know what you have unless you tell them in advance or leave sufficient clues by planning for your digital assets.

Your home office is paperless and behind a locked screen. We all have wishes and preferences about those assets, and these wishes and preferences need to be documented and shared.

Today’s home office is digital. As a result, we will soon have the same spectrum of choices in estate planning for our digital assets as we have for our physical ones.

However, right now, there aren’t a lot of pre-planning options.

You should create a list of your digital assets and passwords so others you trust will know where to find them. In addition, have secure backup versions of files stored in the cloud to a local computer or storage device.

Ask an experienced estate planning attorney about how to organize and plan for your digital assets in your estate plan.

Reference: Yahoo Finance (April 16, 2021) “Who inherits your selfies when you die?”