If you hear the term "digital assets" in the context of estate planning, chances are very good that you automatically envision all of the electronic devices you've accumulated and regularly use from your smartphone and camera to your laptop and tablet computer.
It's important to understand, however, that these devices aren't actually digital assets, but rather personal property that can be covered in even the most basic estate plan. Rather, what digital assets encompass is the information that can be found on these devices from emails, photos and social network profiles to usernames, passwords and stored media.
The unfortunate reality when it comes to these digital assets is that many people fail to properly account for them in their estate plans, meaning their heirs or those tasked with their care in the event of incapacity simply won’t know where to find all of them and/or how to access them.
By way of example, consider exclusively online accounts like PayPal or Amazon, or assets that many of us now access almost exclusively via the Internet, such as bank accounts and retirement accounts.
If your heirs or those granted power of attorney don't have the proper access to these accounts, they can't be properly managed, greatly elevating the risk of mismanagement, financial loss and even theft.
The good news, however, is that there are a few very simple steps that people can take to help ensure their digital assets are properly accounted for:
- Create a comprehensive record of all digital assets and how to access them (website addresses, usernames, passwords, etc.), making sure to keep it updated.
- Inform a trusted representative as to where they can access this comprehensive record in the event of your incapacity or demise.
- Utilize any asset transfer services offered by digital providers (i.e., Facebook actually allows users to appoint a beneficiary to manage their profile if they die).
- Create the necessary estate planning documents (will, power of attorney, etc.) if an actual transfer of digital assets must occur, as it will help eliminate confusion and potential fighting among heirs.
Consider speaking with an experienced legal professional to learn more about making the necessary arrangements for your digital assets, or creating a comprehensive estate plan that accounts for your exact wishes.