In the digital age, estate planning documents can be easily accessed online. While that’s helpful, it is far from the most important change digitization has brought to the practice of estate planning.
It is essential that you now need to plan for assets that are only available in digital form. Losing access to these assets means you actually lose the assets themselves. If you do not take the right steps to prepare, your family can suffer serious heartbreak, disappointment, and frustration if you become incapacitated or when you pass away.
Make Sure the Right People Have Access to Your Digital Assets
If your personal representative or trustee is a close member of the family, they may be the person you want to have access to digital assets. If you have named an institution to serve in one of these official roles, you may instead prefer to have loved ones as the keepers of your digital estate.
As you inventory your digital assets, think about who you would want to be able to see and use them. You might want all family members to be able to copy photos, for instance, but only allow a specific person to have access to financial accounts.
Consider All of Your Digital Assets
Cryptocurrency like Bitcoin is one of the most obvious types of digital assets. Not only do the funds in crypto only exist digitally, but if you lose access or have difficulty, it can be next to impossible to get help, and funds may be lost permanently.
Make an inventory of your digital assets. In addition to cryptocurrency, these might include:
- Photos and videos
- Online payment accounts such as Paypal
- Online savings accounts and brokerage accounts
- Creative content stored digitally, such as blogs, websites, and correspondence
- Cloud-based accounts
- Social media accounts
- Frequent flier miles, credit card points, and other loyalty program benefits
Remember that you need to prepare a plan to address not only assets stored online but also those stored on devices such as your phone or laptop. Content such as writing, photos, and contact information may not have a specific monetary value, but it may be worth even more to your loved ones for the sentimental value. Even accounts that are empty need to be accessed so that someone can close them to prevent opportunities for fraud.
Planning for Digital Assets
After you have made a list of all your digital assets, you need to take a few steps to protect them. First, at the very least, you should compile information about all the passwords, usernames, security questions, contact information, and other data associated with each asset. Keep this list with your estate planning documents and make sure someone knows where to find it.
Second, consult your estate planning attorney to ensure that your financial power of attorney and other relevant documents allow your agents to access digital files and accounts.
Third, check to see which of your accounts have provisions for a “digital personal representative” or “legacy contact” person. Some companies have programs that enable you to designate a person who can access your account when you pass away or if you become incapacitated. The Apple iPhone, for instance, allows you to give your Legacy Contact person an access code they can use in the event of your death.
Check With Your Estate Planning Attorney if It’s Time to Update Your Plan
If life has changed for your family since you last reviewed your plan with your estate planning attorney, it may be time for a tune-up to make sure your plan is ready to face future needs. At Amy Phillips, PLLC, we would be happy to assist. Contact us at your convenience to schedule a confidential consultation.