Estate planning has evolved in the last couple of decades beyond planning for disposition of traditional assets like real estate, vehicles, and heirlooms. Today, individuals possess an unprecedented number of digital assets, ranging from cryptocurrency and online accounts to digital photos and social media profiles. With this digital evolution, many, during their planning for the future, are now asking what happens to their online presence and digital assets when they’re gone.
So, can you include digital assets in your estate plan? The short answer is yes, you can and definitely should include digital assets in your estate plan. However, navigating the complexities of digital assets requires careful consideration and proactive planning. Let’s talk more about what digital assets are and how you can include them in your estate plan effectively.
First and foremost, understanding digital assets is crucial. They include online accounts, files, and electronic data. These assets cover a wide range of things stored online. Knowing what counts as a digital asset is the first step. They’re essentially anything you own or interact with online. These can include:
1. Financial accounts: Cryptocurrency wallets, online banking, investment accounts, and PayPal or Venmo balances.
2. Intellectual property: Digital rights to music, e-books, patents, and trademarks.
3. Personal accounts: Email, social media profiles, photo and video storage, and cloud-based services.
4. Business assets: Websites, domain names, customer databases, and online storefronts.
5. Art: Tokenized digital assets or NFTs.
Now that we’ve identified digital assets let’s explore why it’s crucial to address them in your estate plan:
1. Protection and preservation: Just as you would want your physical assets to be passed on to your loved ones, your digital assets also hold value and significance. Without proper planning, these assets could be lost or inaccessible upon your incapacity or passing.
2. Privacy and security: Digital assets often come with strict privacy policies and security measures. Without explicit instructions in your estate plan, accessing and managing these assets can become challenging or impossible for your heirs.
3. Legal and financial implications: Failing to include digital assets in your estate plan could lead to legal battles, financial losses, and even potential tax liabilities for your beneficiaries.
Now, let’s discuss practical steps you can take to incorporate digital assets into your estate plan:
1. Take inventory: Start by creating a comprehensive list of all your digital assets, including login credentials, account information, and any relevant instructions for accessing or managing them.
2. Designate a digital executor: Similar to a traditional executor who oversees the distribution of your physical assets, appoint a trusted individual to handle your digital assets. Make sure this person is tech-savvy and capable of navigating the complexities of digital accounts and platforms.
3. Specify your wishes: Clearly outline your preferences for each digital asset in your estate plan. This may include instructions for transferring ownership, deleting accounts, or preserving digital content for sentimental or financial reasons.
4. Update regularly: Just as you would update your will or trust to reflect changes in your life circumstances, make it a habit to review and update your digital asset inventory and instructions regularly.
In conclusion, the inclusion of digital assets in your estate plan is not only advisable but increasingly necessary. By taking proactive steps to identify, protect, and designate your digital assets, you can ensure a smooth transition of your digital legacy to your loved ones while also safeguarding your privacy and financial interests. Consult with a qualified estate planning attorney or financial advisor to help you navigate the complexities of digital estate planning and ensure that your wishes are accurately reflected in your estate plan.
Disclaimer: This blog post is intended for informational purposes only and should not be construed as legal advice. For personalized guidance on estate planning matters, reach out to us at O’Brien Estate Law, LLC.