Estate Planning usually includes assets such as personal belongings, property, cars and jewelry but rarely reference to the distribution of Digital Assets.
When people consider leaving assets to their loved ones in a Will, Digital Assets are usually overlooked. Many do not even consider their online footprint while making provisions for after their death. But this might create problems for family members once the individual is no longer alive.
What are Digital Assets?
Before we go into the details of why it is important to include your Digital Assets in a Will or create a Will exclusively for your Digital Assets, let us learn what part of your online life comprises the Digital Assets.
A Digital Asset is anything that is stored in a binary format and comes with a right to use. This encompasses any accounts you open online, like:
- Email accounts
- Social media accounts such as Facebook, Twitter, TikTok and Instagram
- Photo sharing websites
- Any websites and domains you own
- Cloud storage such as Google Drive, Dropbox and Apple iCloud
- Online banking accounts and third-party payment services
The term Digital Assets also refers to the items stored on your personal computer, laptop or smartphone like:
- Word Documents
- Family photos and videos
- Any other property you have created and stored digitally
Most Online Accounts you have are password protected. This means only you will have access to these accounts.
Why should you consider including Digital Assets in your Will?
Many Digital Assets, such as balance in your PayPal account or cryptocurrency have monetary value. You need to make arrangements such that these funds will be transferred to your beneficiaries after your demise.
Social media accounts and photo sharing websites might not have any monetary value but they surely possess sentimental value. Your family members might want to own these photos after you’re gone.
Social Media platforms such as Facebook and Instagram have introduced Legacy Policies that can help you prepare your accounts for after death. The options available to the account holders of these platforms include: Memorialize and Delete/Close.
Memorializing a Facebook account helps in preserving your Facebook profile forever. You can enable this option through your Facebook settings and appoint a Legacy Contact to take over your account after you’re gone.
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If you pass away without making any arrangements for your Digital Assets, your family members will have no way to gain control of these assets. Although you might share your passwords to these accounts with them, it is not legally valid. Family members of the deceased have been accused of ‘hacking’ their loved one’s accounts in the past.
How to safeguard Digital Assets through Estate Planning?
Digital Assets form a part of your Estates and are treated the same by courts as any other asset.
It is important to make a plan and include your Digital Assets in your Estate Plan. By not making arrangements for your Digital Assets, you are:
- Not giving a way for your family members to access your important documents and files stored in Cloud
- Not letting them know what you want them to do with your Social Media profiles after you’re gone.
- Making your social media and other online accounts an easy target to hackers and internet frauds
It is always beneficial to make arrangements for your Digital Assets. You can do so in two ways:
A Digital Estate Plan is an Estate Plan exclusively crafted for your Digital Assets. The steps involved in creating a Digital Estate Plan are:
- Make an inventory of all the online accounts you have created
- Leave instructions as to what must happen to these accounts after you’re gone
- Appoint a Digital Executor to handle your accounts
- Talk to your attorney and get your plan attested so that it is legally valid
You can also include your Digital Assets in your Estate Planning document. For this, you need to:
- Make a list of all the online accounts you have created
- Make a record of usernames, passwords and security Q&As for each account. Keep this record separate from your Will. You can store it in a safety deposit box.
- Ensure your Will contains a certain clause which allows your Executors to access some or all of your Digital Assets. You might also consider appointing a Digital Executor who will only look after your Digital Assets after you’re gone.
- Leave explicit instructions as to what must happen to each of your Online Accounts.
You might also be interested to know the US has passed a law governing fiduciary access to Digital Assets. This law is called RUFADAA and is different for different states.
Now that you know how important it is to make arrangements for your Digital Assets, get started right away by signing up with Clocr. Clocr’s Digital Estate Solutions and Online Digital Will services lets you prepare for your Digital Assets as well as safeguard them forever.