Estate planning is often associated with homes, bank accounts, investments, and other physical or financial property. However, many people now own valuable assets that exist entirely online. From cryptocurrency and online banking accounts to social media profiles, digital photos, and cloud storage, these assets may need to be addressed as part of your estate plan.
Without proper planning, your loved ones may have difficulty locating, accessing, managing, or transferring your digital assets after your death. Understanding how digital assets fit into estate planning can help you take steps to protect important information and make things easier for the people you leave behind.
What Are Digital Assets?
Digital assets can include a wide range of online accounts, files, and property. Some may have significant financial value, while others may hold personal or sentimental importance.
Common examples include:
- Online bank and investment accounts
- Cryptocurrency and digital wallets
- Email accounts
- Social media profiles
- Cloud storage accounts
- Digital photos and videos
- Websites and domain names
- Online businesses
- Digital files and documents
- Loyalty points and rewards accounts
- Subscription accounts
- Online payment platforms
Because these assets may be protected by usernames, passwords, encryption, or provider-specific rules, simply leaving a list of accounts may not always be enough.
Why Digital Assets Should Be Included in Your Estate Plan
If your digital assets are not addressed in your estate plan, your family may not know what accounts exist or how to access them.
For example, an executor may discover that you owned cryptocurrency but have no way to locate the digital wallet or recovery information. Important family photos stored in the cloud could become inaccessible. An online business or website could also be difficult to manage if no one has the information needed to access the accounts associated with it.
Including digital assets in your estate planning process can help create a clearer plan for what should happen to these accounts and files.
Make an Inventory of Your Digital Assets
One of the first steps is identifying what digital assets you own.
Consider creating an organized inventory that includes information such as:
Financial Accounts
List online banking, investment, payment, and cryptocurrency accounts. You may also want to document where important access information is stored.
Personal Accounts
Include email addresses, cloud storage, photo libraries, and other accounts containing important personal information.
Social Media Accounts
Consider what you would want to happen to profiles on platforms you use. Depending on the platform, options may include memorializing, deleting, or allowing an authorized person to manage certain aspects of the account.
Business Assets
If you own a business, digital assets may include websites, domains, business email accounts, online stores, advertising accounts, and other digital tools needed to keep the business operating.
The inventory should be kept secure and updated regularly as accounts and technology change.
Can Your Executor Access Your Online Accounts?
Accessing another person’s digital accounts is not always straightforward.
Online platforms often have their own terms of service and procedures for handling accounts after the account holder’s death. Privacy laws and account agreements may also affect what information can be accessed and by whom.
This is why it can be important to give your estate planning documents clear instructions regarding digital assets and the authority of the person responsible for handling your estate.
An estate planning attorney can help you consider how your will, trust, or other documents should address these assets.
Do Not Put Passwords Directly in Your Will
It may seem convenient to include usernames and passwords directly in your will, but this can create problems.
A will may eventually become part of the probate process and could become accessible as part of the court record. Passwords can also change frequently, making a will quickly outdated.
Instead, you may want to keep account credentials and other sensitive information in a secure location and make sure the appropriate person knows how to access that information when necessary.
This could involve a secure password manager, encrypted storage, or another method that allows important information to be updated without changing your estate planning documents every time a password changes.
What About Cryptocurrency?
Cryptocurrency can create unique estate planning challenges because access may depend entirely on private keys, recovery phrases, or other security information.
If this information is lost, the cryptocurrency may be impossible to recover. At the same time, sharing sensitive security information carelessly can create significant risks while you are alive.
A carefully developed estate plan can help address who should inherit cryptocurrency and how the necessary access information can be made available at the appropriate time.
Because cryptocurrency ownership and access can be complex, it is especially important to make sure your estate planning strategy accounts for how these assets are actually held and secured.
Digital Assets and Your Trust
Depending on your estate planning goals, a trust may also play a role in managing digital assets.
A trust can provide instructions for how certain property should be managed and distributed. However, simply creating a trust does not automatically solve every issue involving online accounts.
You may still need to make sure that account ownership, access procedures, and estate planning documents work together. The goal is to create a coordinated plan that makes it easier for the appropriate person to manage your assets when the time comes.
Keep Your Digital Estate Plan Updated
Digital assets can change quickly.
You may open new financial accounts, create additional online businesses, change password managers, or acquire new forms of digital property over time. Reviewing your estate plan periodically can help ensure that it continues to reflect what you own and what you want to happen to it.
It may also be a good time to update your digital asset inventory and confirm that the people responsible for your estate know where important information is stored.
Get Help Creating an Estate Plan That Addresses Digital Assets
Digital assets are becoming an increasingly important part of estate planning. Whether you own cryptocurrency, operate an online business, store important family memories in the cloud, or simply have numerous online accounts, planning ahead can help prevent unnecessary complications for your loved ones.
An experienced estate planning attorney can help you consider how digital assets fit into your overall plan and develop documents that reflect your wishes.
Conclusion
Your estate is no longer limited to the property you can physically see. Online accounts, digital files, cryptocurrency, and other digital assets may hold financial or personal value that should not be overlooked.
By identifying your digital assets, organizing important information securely, and incorporating them into your estate plan, you can help provide clearer guidance for the people responsible for handling your affairs. Taking the time to plan now may help your loved ones avoid unnecessary confusion and ensure that important digital property is not lost or forgotten.