Nowadays, most of our assets come in digital form. Our money is deposited and transferred through online banking, our photos and videos are stored via cloud accounts, and Instagram has effectively become our digital photo album. These digital assets are important and often forgotten when planning for our death and incapacity. To ensure your loved ones receive these assets, you should consider digital estate planning.
What is a Digital Asset?
A digital asset is simply an electronic record in which an individual has a right or interest. However, this term does not include any underlying asset or liability unless the asset or liability is itself an electronic record.
In California, digital assets include social media accounts, email accounts, domain names, virtual currency and banking, photos and videos that are electronically stored, and so much more. In today’s modern age, we must adapt to our increasingly virtual lives and consider who will have access to these assets upon our death and/or incapacity.
How Do I Protect Digital Assets?
Make a List
You can start by creating an inventory of your digital assets, including account names, usernames, passwords, pin numbers, and other access codes. This is especially important for digital assets that don’t offer succession planning, such as cryptocurrency.
To ensure your loved ones receive your digital assets, they must first know the asset exists and, second, have the access information available to them. Once you’ve prepared this list, you should keep it in a secure location. The list should be updated every year when preparing your tax returns.
Name a Legacy Contact
You can often name a specific person as your digital executor via the digital account itself. For example, companies like Facebook, Instagram, and Apple allow you to designate the person who may access your account/data at death; this person is known as a “legacy contact.” However, not all digital companies (such as cryptocurrency) provide their users with this option.
Update Your Estate Plan
You may also consider updating your estate plan to include digital asset provisions. These provisions can be included in your Trust, Will, and Durable Power of Attorney. Including such provisions ensures your desired digital executor can legally access and distribute these assets to your loved ones. It is important you continue to meet with a competent estate planning attorney periodically to ensure your estate plan is up to date and in tune with our evolving world and laws.
Protecting Your Legacy is Our Priority.
Your digital assets have tremendous sentimental and financial value. Let the experienced team at Brierton, Jones & Jones help you develop a strategic estate plan that keeps your legacy safe. We'll work closely with you to catalog your online accounts and holdings, assign trusted legacy contacts and executors, and integrate digital asset provisions into your estate planning documents. Contact us now!