The Internet is increasingly becoming the main storage depot of our financial lives. A recent survey from Pew Research revealed that 51% of American adults bank online, and 32% bank using their mobile devices. Digital assets can also include anything of sentimental value, from a Facebook profile to a Youtube channel and more. With almost nine out of 10 Americans using the Internet, there is a strong need to include digital assets in estate plans.
As a recent article in the Wall Street Cheat Sheet titled "Estate Planning 101: Don’t Forget About Your Digital Assets" notes, digital assets hold both financial and sentimental value to family and friends and this should be addressed in the estate planning and administration process. First you must find the digital property and identify which is valuable or significant. In addition, there are passwords, encryption, computer crime laws, and data privacy laws to deal with, any one of which can make it nearly impossible to do anything with the digital property.
In order to protect your assets, the Wall Street Cheat Sheet article recommends including them in a will or trust and designating someone who can execute your wishes. It also recommends that you should add a provision in your estate plan granting this trusted person access to your online accounts and data in the event of your incapacity or death.
Do remember that completing an inventory of your digital assets is only the initial critical step in this process. Include usernames and passwords for your electronic devices, bank accounts, utility accounts, email accounts, insurance plans, and any other significant online accounts used frequently. Also, if there's information you do not want disclosed to family and friends, you should give instructions on how that information should be handled. The will should contain only the instructions on where to find your usernames and passwords in a location, such as a safe deposit box.
Think about all of the information you have stored online—plan ahead and talk to your trusted advisors about digital assets and other estate planning strategies.